Fair technology brings transparency and sustainability to the food chain
Most food supply chains start in developing countries, where there’s a big gap between the rich and the poor. Whether it concerns coffee, cocoa, nutmeg, coconut, pineapple, cane sugar, shrimps or vanilla… in many of these supply chains, just a small percentage of the money made throughout the chain ends up with the farmers who grow the product. In the opinion of Dutch non-profit organisation Fairfood, transparency plays a key role in changing this unfairness. Fairfood’s managing director Sander de Jong explains how blockchain and other innovative technologies can make food chains more transparent and sustainable.
More transparency will lead to more fairness
Most consumers are used to the luxury of going to a shop and buying all the food they want. But somewhere in the world, farmers are working hard to grow this food, which does not always earn them a decent wage.
Fairfood finds it striking that, in some countries, consumers easily pay € 4 for a cup of coffee, while the farmer who grew the coffee beans hardly earns € 2 a day. ‘Where does all the money go?’, they asked themselves. Now it is their mission to bring transparency to complex food chains.
In the opinion of Fairfood, a fair and more sustainable food chain starts with creating transparency from farm to fork. By making all partners in the chain visible, it becomes clear where the money goes and where problems may persist, ultimately giving farmers and food workers a better position in the chain.
How does fair tech provide transparency?
Fairfood uses smart technologies like blockchain to establish a fair and transparent chain. To put it simply: in their ideal world all the partners in the supply chain, including farmers, are digitally connected with each other, and every product that goes through that chain (a batch of coffee, spices or coconuts) gets a unique code. This code is a kind of digital product passport that provides insight into where the product comes from and what is paid for it at the various links in the chain. All of this comes together in their platform Trace.
De Jong: “Think of it as a track & trace platform, comparable with the tracking and tracing of your post packages. You can track and trace your coffee, spices, cocoa, tomatoes or shrimps right back to the farmer or fisherman that has grown or caught it.” With the use of blockchain, the system is decentralised, robust and fraud-proof. And as less fraud and more efficiency potentially translate into more profit, more money will ultimately flow to the farmers.
Connecting farmer and consumer
Innovative technologies as blockchain provide many insights, to consumers, companies and potentially farmers. De Jong: “Consumers can see exactly what they are buying and from who, and can decide: am I contributing to a better world by buying this product? Farmers who have access to the right devices can get a lot of insights too. The nutmeg farmers in one of our projects, for example, never knew their product is sprinkled on cauliflower by the Dutch, or that it is used in candy bars.”
But even more important, it makes the farmer connected. “As soon as a farmer has his own digital identity, he can start building up a track record. Many farmers do not keep accounts, other than paper receipts, with which you cannot apply for a loan. As soon as they have a digital cash book, they can go prove to a bank that they are creditworthy. With that they can help themselves out of the poverty trap.”
From pilot to large-scale projects
In 2017, Fairfood was one of the first parties worldwide to sell a food product that had been traced on a blockchain from tree to plate: 1.000 Indonesian coconuts. This was a pilot project to encourage large coconut players to explore their own chains. You can read the whole story and see the journey of the 1.000 coconuts on the Fairfood website.
De Jong: “At the time, there was a lot of talk about blockchain, but it was all still on a conceptual level. We just started, in order to find out which challenges we would encounter. Those challenges turned out not to be in the technology, but more in practical issues. For example, in Jakarta the container with coconuts had to wait over a month for approval from a customs officer who was waiting for a form – that turned out not to exist.”
Bringing more fairness in the coffee supply chain
The pilot was the start of a series of beautiful projects. As it was now clear that the technology worked, other supply chains could be tackled. One of the first sectors where Fairfood introduced the blockchain to fight poverty, was the coffee sector. Many coffee farmers hardly earn a living wage, while consumers in Europe sometimes pay 4 euro for a cup of coffee (see this animation to understand the disbalance in the coffee supply chain). That’s why Fairfood started another pilot in coffee, next to a partnership they kicked off with the FairChain Foundation and Moyee Coffee, to work on a better standard of living for the coffee farmers.
All with success. Kilil Mesfin, managing director for FairChain / Moyee Coffee in Addis Ababa, is proud to share the successful changes that their fairchain has brought to the region. “First of all, poverty is reduced as the farmers get better prices for their coffee. It also brings job opportunities for youth and women in the area, and children are engaged and encouraged to attend school. The community can now afford good health care, and everyone is highly engaged in coffee tree planting. The environment also benefits, as farmers get training in farming without using fertilizer and pesticides.”
Transparency will be increasingly important in the coming years. De Jong: “We are engaged in a world that normally remains completely out of sight. The importance of transparent food chains will grow, as transparency is really the only way to start and become more sustainable. If you are not willing to shine light on your supply chain and face the dark side, nothing will change. Fortunately, due to legislation and consumer demand this will become difficult in the future.
For them, the major challenge lies in making distant, international chains more sustainable. Chains with ingredients from countries with totalitarian regimes, where exploitation is persistent. Right now, many companies don't even know where their ingredients come from. But they must comply with international guidelines that require them to work more sustainably and prevent human rights violations.”
Puratos values transparency highly as well, that is why we have our own initiative to make the cocoa supply chain more sustainable and transparent: Cacao-Trace. Cacao-Trace empowers cocoa farmers to obtain the highest possible income and to manage their plantations with greater autonomy. This cocoa sourcing program is focused on creating value for everyone, from the cocoa farmers to your customers, through taste improvement. Unique are the post-harvest centres where we collect, ferment and dry the cocoa beans ourselves. This controlled fermentation ensures consistent and high-quality cocoa. In return, farmers are rewarded with a better price for their better cocoa. Cocoa farmers also receive training, fair and predictable payments and an additional Chocolate Bonus for every kilo of Cacao-Trace chocolate that is sold.
Transparency is a trend within the food industry that is much broader than solely fair trade and sustainability. Check out our research results to find out what consumers expect from producers in terms of transparency.