Can blockchain help enforce ethics within the coffee industry?

Currently the average green coffee export value is less than 10% of the $200 billion revenues generated in the coffee retail market. This imbalance illustrates the pressing need for transparency of transactions in order to achieve re-distribution.

page 10 of the 2018 Coffee Barometer report.

Table of Contents

The Problem

For a lot of coffee consumers in the UK, we want more than great tasting coffee. We want our coffee to be grown in sustainable environments that are environmentally friendly. Sadly this has not always been achievable. Not because farmers didn’t want to but because they simply couldn’t afford to. 

In 2018, FairTrade wrote an article about Peter d’Angremond of the Max Havelaar Foundation’s concern for coffee farmers who were being paid less for their arabica coffee beans than they were worth. The consequences of underpaying farms is that it has led to human rights issues of poverty and environmental destruction. There are currently estimated to be 25 million coffee farmers around the world so there are a lot of people effected by this issue.

Blockchain to the rescue?

With those sobering statistics in mind, you will be pleased to know that actions are being put in place to increase traceability and accountability to the coffee industry. 

You may have heard of the term blockchain associated with digital money system bitcoin. I’ve included a couple of videos that explain Blockchain simple but in more depth way , but essentially blockchain in the context of food supply is a way of tracking a product from grower to consumer.

The way blockchain works, makes it nearly impossible to hack. This removes the risk of greed and corruption. What this means for a farmer can ask for a fair price for their coffee because they are able to see how much it is being sold for. Consumers can track the source of their coffee back to the farmer to ensure that it meets their own personal criteria for ethics and sustainability.

Two of the bigger companies involved are Oracle and the IBM Food Trust. Oracle has recently used it’s software to help conserve the bee population

IBM’s Food Trust branch is applying blockchain to ethical sourcing of food and drink. As part of this, they have created an app called Thank My Farmer  which allows consumers to track the source of the coffee they are drinking and ensure that it has been fairly traded. They also have a list of projects based in coffee growing countries that you can donate to.

Essentially both platforms are designed to create transparency between each organisation on the supply chain. Trust between organisations is both the strength and weakness of blockchain software.

There has been a strong focus on data privacy in the last few years, so ensuring users data is handled correctly is an important aspect of the process.

Ian's Thoughts

Firstly, we’re very happy that technology is being put in place that encourages accountability between farmers and suppliers. Anything that encourages ethical business is a positive thing for everyone involved. Will EA be signing up to a coffee specific blockchain software soon? Whilst I wouldn’t rule it out in the future, we have essentially been doing what the software wants suppliers to do since the inception of the company.

When we started Ethical Addictions in 2006, we didn’t use traceability as just a buzzword to band around, but as an integral part of our business. Ethics were, and are, so important to us that we literally put it in the name of the company!

Ethical (financial adjective) : avoiding activities or organizations that do harm to people or the environment.*(Oxford Dictionary)

At the core of our business are relationships. Relationships with customers, with suppliers, with us as a team and of course with the farmers we work with. We have a deep respect for the farmers’ knowledge and effort to produce exceptional arabica coffee, and as such we believe that they should be paid what the coffee is worth. We are doing everything in our power to ensure that we maintain our long-term relationships and buying commitments into 2021 and beyond, despite being hit by a global pandemic.

One of the most rewarding parts of my job is being able to sit down with farmers, eat together and share stories. I remember one evening back in 2014 when I was sitting with one of the farm managers discussing the historical aid situation in Africa. We were discussing the way that an extensive quantity of money has been spent on loans and charity, whilst concurrently abusing the same countries in the way we trade with them. He said this:

Lots of money has been spent on projects, but no good price has been paid for coffee. If people would just pay well, trade well, and make long-term commitments to relationships, then let producers take care of themselves, their own school fees, their own housing and so on.

We pay our farmers the price they deserve for their coffee. We set-up projects to help them improve the quality and quantity of the coffee. As a result their quality of life is improved and they can invest in their families and their children’s education. They are also able to implement sustainability and environmentally friendly systems on their farm.

As a result we receive fantastic quality coffee beans that are environmentally friendly and ethically sourced that we can sell to businesses and individuals.

Blockchain trying to bring accountability to the coffee industry is fantastic news. As I said earlier in the article, it might be something we end up using ourselves in the future. However, I feel that we already do this organically. Not only do we hold each other accountable within EA, but you, our customers, do as well! I am not saying we are a perfect business or that we haven’t got room for improvement but holding ourselves accountable to you our customers is an important part of how we continue to develop as a business and live up to the “ethical” part of our name.

If you would like to trace the interactions with our farmers then please read the farm pages and journal section of our website. 

Share on facebook
Facebook
Share on twitter
Twitter

Leave a Reply

Sign up for our Newsletter