In March last year, India’s Ministry of Commerce & Industry and The Coffee Board of India announced the launch of a blockchain-based e-marketplace for coffee trade. The app that aims to provide farmers with a fair price in exchange for fair-trade practices is another in a long list of blockchain-backed platform that has taken the coffee industry by storm.
Something for Everyone
Blockchain is enabling consumers to trace their coffees to their origin in a more transparent manner. Furthermore, coffee farmers who do not have access to formal financial systems can receive formal contracts that are transparent and visible to every stakeholder in the supply chain.
Coffee farmers usually sell their produce to cooperatives. From there on, the beans change hands multiple times before finally reaching the consumers’ coffee machines. The highly fragmented and layered supply chain – farmers, traders, exporters, shipping companies, roasters, processors, etc. – has achieved traceability, visibility, and transparency thanks to the decentralized control nature of blockchain.
Blockchain – The Ideal Brewing Companion
Blockchain is a distributed ledger that makes cryptocurrency transactions possible. Its decentralized nature makes it highly secure and fully transparent. Blockchain allows suppliers and manufacturers to add cryptographic identifiers such as smart tags or product IDs to their products. This makes fraud or counterfeit nearly impossible, further making it ideal for a supply chain that involves multiple stakeholders.
Blockchain-enabled supply chain tracking is done through a common platform that all parties in the supply chain can access. Each stakeholder in the chain has the same viewing rights of the entire supply chain. Any change to the ledge happens in real-time and everyone with access to it is aware of this change.
The Trust Factor
The second half of the 20th century was critical in drawing attention to the malpractices in the coffee supply chain. While roasters and corporations gasconaded about their corporate values and organizational beliefs, consumers always knew there were loopholes in the entire system that allowed for exploitation and unfair practices. One of the chief roadblocks in a trust-based supply chain is consumer trust.
Blockchain’s transparency allows for manufacturers to establish that trust with the consumers. Consumers can inspect contracts, track produce origins, verify transactions, and spot malpractices. Consequently, blockchain creates a trustworthy validation system.
The Ball Is In Consumers’ Court
For centuries, the blame for the exploitation of coffee farmers and laborers has rested on the middlemen and big corporations. And rightly so. For the first time though, blockchain-enabled platforms and apps are letting everyone, even the end consumers, play an active role in the governance of how their morning cups make it to their breakfast table. As a result, consumers can now play an active and informed role in supporting coffee farmers.
The Big Players
IBM, too, launched a blockchain-based app earlier this year that connected coffee farmers to consumers by making the whole supply chain transparent. Farmers in Ghana are also seeing a surge in blockchain-backed systems to make traceability more visible and simpler for consumers. It is pulling many coffee farmers out of poverty and exploitation.
Blockchain’s virtues have are not limited to the coffee industry. Blockchain is enabling organizations to rebuild their entire supply chain ecosystem to make it more transparent. Companies dabbling in digital finance and payments, agriculture and food manufacturing, big-box retail stores, etc. are depending big-time on blockchain technology to make their entire source to consumer ecosystem visible and accessible to all stakeholders. This has led to a surge in the demand for blockchain specialists.
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