Establishing a digital transparency solution

GIZ and its partners are setting up a blockchain technology solution for Rwandan coffee grown by female farmers. The goal is better traceability in supply chains, increasing farmers’ income and empowering women.

In cooperation with the International Women’s Coffee Alliance, the GIZ sector programme for Sustainable Agricultural Supply Chains and Standards has developed a blockchain-based, scalable and transferable open-source solution to trace coffee produced by Rwandan female farmers up to the end consumer.

Coffee is the Germans’ favourite beverage. Yet, it only grows best along the equator in Africa, Central and South America and some parts of Asia. Thus, the German coffee industry relies on functioning global supply chains, which are usually rather opaque.

The product on supermarket shelves tells us very little about the social, economic and ecological conditions the product was cultivated and produced in. However, consumers and retailers alike are increasingly demanding to know more about the origin of their coffee. A blockchain-based solution provides insights into the production of coffee and allows for higher transparency.

Coffee is one of Rwanda’s most important export goods

It is sold to Germany in large quantities. However, the world market price for coffee is notoriously low. Smallholder families often cannot earn a living income from their coffee cultivation, even though a decent income is a human right.

Farmers often organize themselves into cooperatives, but only rarely they have access to higher-priced markets. Low yields, high production costs and low prices hardly result in families being able to make a living from growing coffee.

Women doubly burdened

The problem holds especially true for women, as they often are disadvantaged in more than one way. On the one hand, they do most of the labour in coffee production, yet have fewer rights of co-determination than men leaving them less financially independent.

In addition, women continue to be largely responsible for the household, even if they work nearly full-time on the farm. On the other hand, while digital technologies enable farmers to connect to global markets, services and education, women are more likely to be left behind by digitalization than men.

Aiming at bridging the digital gap

The project wants to increase women’s independence by strengthening their decision-making power and improving their participation using a digital solution.

With the new digital tool, all transactional data along the supply chain are stored on a blockchain.

A blockchain is a decentral, tamper-proof database allowing various players to store and retrieve data on product origin, production processes and (paid) prices. This reduces information asymmetries and increases transparency for all actors along the supply chain. Key information related to provenance, prices paid or quality can be made accessible via a QR code on the packaging.

By scanning the code, consumers in the supermarket get to know where their coffee came from, which route it took and which price it sold for.

At the same time, the coffee farmers at the other end of the chain can access information on production processes, quality parameters, certification, and product and financial flows, enabling them to make more informed decisions and generate higher revenues in the long term.

A project with pilot character

The project aims at demonstrating the viability of blockchain-based traceability by implementing the technology with an exemplary existing supply chain.

At the beginning of the supply chain are women’s cooperatives associated with the Rwanda Smallholder Specialty Coffee Company (RWASHOSCCO), which is a company founded by producer cooperatives that markets and roasts Rwandan coffee, contributing to value creation in the country.  The coffee is sold through various online stores under the brand name Angelique’s Finest.

With the transparency solution, not only the origin of the coffee can be traced, but it can also be ensured that the women farmers receive a fair share of the revenues. It also substantially increases the market potential and value of the product and, hence, the income of the coffee farmers. Moreover, it creates the conditions for further benefits for the Rwandan actors involved, such as the provision of financial services.

And another exciting fact about the solution: It is free to use, open-source and easily adaptable to other supply chains and countries.

Authors

Ronja Platz, Lars Kahnert, edited by Marie Hamayel-Peters

Contact

Please reach out to us if you want further information or you want to apply the solution to your own project context.

Lars Kahnert, GIZ, Advisor Sector Programme NAS, lars.kahnert@giz.de