Koa Foods Cocoa this week launched a blockchain-based program that increases the transparency of the cocoa supply chain and ensures that Ghanaian farmers get paid properly.
The program supports partnerships with the German supply chain company Seedtrace and the South African telecommunications company MTN Group. Coa said she hopes to “improve openness and accountability” by ending what she calls “scandals and poverty among cocoa farmers”.
Companies such as the Oreo producer and Chips Ahoy Mondelez have been accused of paying farmers lower wages by the Cocoa Café Board, which regulates cocoa production in Côte d’Ivoire and Ghana. Koa believes that public documentation of payment entries on the blockchain can eliminate this practice.
Seedtrace provides a platform for Koa’s supply chain infrastructure. The platform uses the Topl blockchain to record data on cocoa production and distribution. Farmers use the data to see where their products have gone and how they are used, while consumers can easily trace the origin of the ingredients in the food and ensure that farmers get paid well.
“We want to get rid of long and opaque supply chains,” Koa MD and co-founder Anian Schreiber told industry magazine Candy Insider on Wednesday. He believes that promises of ethical business behavior are not enough, consumers should check them easily.
“Instead of stating best practices, we open our cards so consumers can see farmers watching every transaction.”
Data on movement of goods and payments are collected and sent to MTN Group. The company enters payment details into the Seedtrace platform, which confirms the location and amount paid for products at each point in the supply chain.
The system also benefits from Ghana’s efforts in June 2021 to reduce theft from farmers by requiring them to pay digitally instead of cash. MTN stores an overview of digital payments to farmers on the public blockchain.
According to OEC World, Ghana is the second largest producer of cocoa beans in the world. The average Ghanaian farmer earns around $ 6,183 annually, according to the Median Wage Survey.
Koa is not the only company that has recently implemented a blockchain for supply chain tracking. North American retail giant Walmart Canada has begun using distributed ledger (DLT) technology in its supply chain over the past year.
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Through a partnership between Walmart Canada and enterprise technology solution company DLT Labs, the DL Freight supply chain network was launched in March 2021. In January, Harvard Business Review wrote that DL Freight uses a closed (private) blockchain to record shipping data and we have seen a decline in billing disputes. to less than 1% from 70% before the network was launched.
Walmart also uses data giant IBM’s Hyperledger Fabric platform to track foodborne illness. According to Nasdaq, the system reduced the time it takes to search for specific nutritional data from 7 days to just over 2 seconds.