Blockchain tracking sweetens the pay of Ghana’s cocoa farmers

189
SHARES
1.5k
VIEWS


Cocoa product startup Koa this week launched a blockchain-based program to improve the transparency of its cocoa supply chain and ensure that its Ghanaian farmers are being paid properly.

The program is supported by partnerships with German supply chain company Seedtrace and South African telecommunications company MTN Group. Koa said he hopes to “improve transparency and accountability” by ending “scams and cocoa farmer poverty”.

READ ALSO

Corporations such as Oreo and Chips Ahoy maker Mondelez have been accused of paying farmers a rate lower than the living wage by the Conseil du Café-Cacao, which controls cocoa production in Ivory Coast and Ghana. Koa believes that publicly documenting payment records on the blockchain could put an end to such practices.

SeedTrace provides the platform for Koa’s supply chain infrastructure. The platform uses the Topal blockchain to record data about the production and distribution of cocoa. Farmers use data to know where their products have gone and how they are being used, while consumers can easily track the origin of the ingredients in their food and ensure that farmers get access to their food. The work was paid fairly.

Koa’s managing director and co-founder Anian Schreiber told industry publication Candy Insider on March 16 that: “We want to get rid of long, non-transparent supply chains.” He believes that while promises of ethical business operations are not enough, it should be easy for consumers to audit.

“Instead of claiming good practices, we let consumers keep their cards on the table to see each and every transaction of farmers.”

Data about product movement and payment is collected and shared by MTN Group. The company inputs payment data onto SeedTrace’s platform, which verifies the location and amount paid for products each way on the supply chain.

The system pushes Ghanaian farmers to pay digitally instead of cash to reduce the number of theft attacks that took place in June 2021. Through MTN, the records of farmers’ digital payments are stored on a public blockchain.

Ghana is the second largest producer of cocoa bean in the world according to OEC World. The average Ghanian farmer earns about $6,183 per year according to the Average Wage Survey.

Koa is not the only company to adopt blockchain for supply chain tracking recently. North American retail giant Walmart Canada has started using distributed ledger technology (DLT) in its supply chain operations over the past year.

Connected: Project aims to counter SAP ERP with decentralized apps

The DL Freight supply chain network was launched in March 2021, through a collaborative effort between Walmart Canada and tech enterprise solutions firm DLT Labs. Harvard Business Review wrote in January that DL Freight uses a closed (private) blockchain to record shipping data, and has dropped the rate of invoice disputes from 70% to less than 1% before the network was launched.

Walmart also uses computer giant IBM’s Hyperledger Fabric platform to track and trace foodborne illnesses. According to Nasdaq, the system has “reduced the time it takes to find specific data on food items from 7 days to more than 2 seconds.”