Today on World Chocolate Day, the non-profit Heifer International and IBM announced that the blockchain-based IBM Food Trust is being used by smallholder coffee and cocoa farmers in Honduras to enable them to earn more money.
A study conducted by Heifer claims that small-scale coffee farmers operate at an average of 46-59% loss. Such a stark number is likely due to the number of middlemen involved in the coffee supply chain.
Coffee has to pass through cooperatives, traders, roasters and coffee shops before it reaches the consumer. This leaves a miniscule profit margin for the farmers who first grew the beans.
Another disadvantage lies with how profits are weighted and calculated for the farmers. Coffee cooperatives typically split profits based on how much coffee a farmer contributed, or the number of worked hours. This can often be an underestimate of their effort.
Founded in 2017, the Food Trust technology aims to better support small-scale Honduran farmers by allowing them to upload data about bean production onto the blockchain. This can be accessed by corporate buyers, who can confirm the authenticity of the beans.
Heifer hopes that the technology will provide buyers with knowledge of the product supply chain, ultimately empowering farmers to secure higher prices for themselves.
“Our work with Heifer International and COPRANIL (farmer cooperative) is an important test of how AI and blockchain technology can advance social good and support sustainability by helping even small-scale producers,” said Kareem Yusuf, Ph.D, General Manager of AI Applications and Blockchain at IBM.
The coffee traceability sector has experienced major growth in recent years. For example, Starbucks has been using Microsoft Azure’s Blockchain to share information about the beans via the Starbucks app. And Farmer Connect operates a blockchain coffee traceability solution that IBM Food Trust also powers.
Meanwhile, multiple food industry sectors are using IBM Food Trust’s supply chain traceability technology. These include the seafood firm Nueva Pescanova and Spanish olive oil suppliers. Carrefour’s textile items are also the first non-food products to be traced with the IBM Food Trust. Nestle and Walmart were amongst the founding platform users.