Blockchain can increase transparency and returns for agricultural producers

This topic will be discussed at the Global Landscapes Forum Luxembourg on 30 November 2019. Learn how to join the event here.

WASHINGTON (Landscape News) — A groundbreaking emerging technology has the potential to transform global value chains, speakers at a recent Global Landscapes Forum session in Washington said.

Known as blockchain, the technology allows users to keep and update digital records across multiple computers at the same time.

Users in this chain receive permission to take part in a group and a key code to enter information into the equivalent of a digital ledger.

The blockchain system is protected by cryptography and also allows for time-stamping, smart contracts, and smart signatures. Equally critical, these records cannot be retroactively changed and do not require a central administrator.

“Blockchain is considered immutable and unchangeable and can lower costs and reduce inefficiencies and lessen the amount taken by middlemen,” said speaker Aanchal Anand, a land administration specialist at the World Bank.

In one example cited at the Investment Case Symposium on May 30, speakers at a session titled “Emerging Tech Innovation Driving New Landscape Sustainability Business Models,” said that globally, coffee farmers typically receive about 2 percent of the value of a  cup of coffee.

Between harvesting the beans and sending to market a large network of roasters, brokers, buyers, and others take a significant cut of the product.

Ethiopia is the world’s fifth largest coffee producer, for instance, and 95 percent of the nation’s coffee is produced by small farmers. But the complex system involved in getting the beans to market typically yields only small profits for the farmers.

Blockchain could change this dynamic in emerging economies worldwide but other fixes needed to be made for that to happen, speakers said.

“There are legal and regulatory hurdles,” said Frank Pichel, interim CEO and chief program officer at Cadasta Foundation, pointing out roughly 70 percent of the land globally is undocumented. This unregistered land contributes to issues of  land rights, ownership, boundary disputes and related corruption that need to be resolved before the blockchain process can start.

Anand also cited the need to educate blockchain users across the network on what the system involves and how it works. She added that some nations may not have the resources to invest in blockchain, especially if they have recently invested millions in building more traditional IT network.

Some entrepreneurs, however, have already made the blockchain leap.

Moderator Katherine Foster, a World Bank advisor, highlighted the Moyee coffee business. Based in Dublin, the company uses blockchain to provide transparency and efficiency in its coffee supply.

Moyer uses the technology company bext360 and the FairChain Foundation to manage distribution and equitable sourcing and pricing. According to Moyee, the coffee farmers in the network see about 20 percent of the value of a cup of coffee.

Said Foster: “This shows a way to disrupt the value chain and to shift more value to the farmers.”