Blockchain helps the cocoa farmers in Ivory Coast to get a better position in de cocoa chain
Nowadays, the questions of people about the origin of the cocoa products which they consume are higher than ever. Questions like “where do the beans come from, or are the cocoa products produced in a responsible way, or are the production processes free from slavery and child labour?”. So “what exactly is involved with their purchases”, are becoming more and more important.
For my bachelor thesis, I did research on the possible application of blockchain technology within the cocoa chain in Côte d’Ivoire.
The cocoa supply chain in Côte d’Ivoire is very complex with many actors and intermediaries within the supply chain. The actors don’t know nor trust each other. Despite the fact that the demand for the cocoa beans is high, the farmers don’t earn much on their cocoa beans. The use of new technologies for a better traceability of cocoa along the supply chain in Côte d’Ivoire is limited. The application of blockchain within the cocoa supply chain in Côte d’Ivoire can bring significant improvement to the possible traceability of the cocoa beans, from farm to bar. Besides that, blockchain can strengthen the position of cocoa farmers in the supply chain.
Blockchain for track and trace and transparency within the cocoa supply chain
The primary goals of a blockchain are facilitating the exchange of information, creating a digital twin of the information and its workflow, and validating the quality of food as it moves along the chain (World Economic Forum, 2017).
Each participant in the blockchain network possesses a complete and identical copy of the ledger. All modifications edit copies at once so that each node has the real-time data. Thus the amendments are visible to everybody, which makes the system fully transparent and thereby reduces the need for trust.
With blockchain technology it is possible for consumers to follow the journey of the cocoa beans along the supply chain such as : how the cocoa grow, from which farmer, whether the cocoa is from the highest quality and whether the farmer got the price that was agreed upon. So, everything is transparent.
Blockchain strengthens the position of the cocoa farmers
Because of many intermediaries in the supply chain, the cocoa farmers in Côte d’Ivoire don’t have direct access to the international market. They don’t know about the recent market price, have a lack of bargaining power and therefore deserve low income and remain in poverty. Poverty is the main cause of slavery and child labour in Côte d’Ivoire. Blockchain technology can help famers to gain more bargaining power and a better understanding of the market.
With this weak financial position, it is difficult to farmers to get credit access to improve their farms. This situation makes their position in the supply chain very weak.
The farmers can join in blockchain with a simple mobile phone. In this way, the farmers can check the prices, trade online and receive a better bargain price for their crops. They can choose to whom they want to sell their crops and pick the price that suits them best and thereby strengthen their position in the supply chain.
Blockchain as a marketing tool
Besides serving as a traceability system, a blockchain can be used as a marketing tool. Because of the fully transparency of blockchains and the fact that participants can control the goods in them, they can be used to improve a company’s image and reputation, boost loyalty among existing customers and attract new ones (Galvez, Mejuto, & Simal-Gandara, 2018).
Galvez, J. F., Mejuto, J., & Simal-Gandara, J. (2018). Blockchain in food traceability.
World Economic Forum. (2017). Technology and Innovation for the Future of Production:.
This was the 10th issue of the Forks Monthly newsletter. Every month we choose a hot topic and curate and select the most relevant article’s, report and news surrounding this topic to bring you up to date! It is our mission to make sure you get all the info you need to stay ahead of this new technology in one single mail per month.
Once you are part of our mailing list, you never have to scan through contradicting blockchain articles again, we will do it for you!