Cocoa product startup Koa this week launched a blockchain-based program that improves the transparency of the cocoa supply chain and ensures that Ghanaian farmers are paid correctly.
The program is supported by: partnerships with German supply chain company Seedtrace and South African telecom company MTN Group. Koa said it hopes to “improve transparency and accountability” by ending what it calls “scandals and poverty among cocoa farmers.”
Companies such as Oreo and Chips Ahoy producer Mondelez are accused farmers a rate lower than a living wage by the Conseil du Cafe-Cacao, which regulates cocoa production in Côte d’Ivoire and Ghana. Koa believes that publicly documenting payment details on a blockchain can eliminate such practices.
Seedtrace provides the platform for Koa’s supply chain infrastructure. The platform uses the Topl blockchain to capture data on cocoa production and distribution. Farmers use the data to know where their products have gone and how they are being used, while consumers can easily track the origin of the ingredients in their food and to ensure that farmers were well paid for their work.
Koa director and co-founder Anian Schreiber told industry publication Candy Insider on March 16 that, “We want to get rid of long, non-transparent supply chains.” He believes that promises of ethical business practices are not enough, that they should be easy for consumers to verify.
“Instead of claiming good practice, we put our cards on the table so that consumers witness every transaction to farmers.”
Data on product movements and payments is collected and shared by MTN Group. The company enters payment details into Seedtrace’s platform, which confirms the location and amount paid for the products at each waypoint in the supply chain.
This system also benefits from Ghana’s June 2021 efforts to reduce thefts from farmers by requiring them to be paid digital instead of cash. Via MTN, the registration of farmers’ digital payments is stored on the public blockchain.
Koa isn’t the only company to recently use blockchain for supply chain tracking. North American retail giant Walmart Canada has started using distributed ledger technology (DLT) in its supply chain operations over the past year.
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Through a partnership between Walmart Canada and DLT Labs, a technical business solutions company, the DL Freight supply chain network was launched in March 2021. Harvard Business Review wrote in January that DL Freight uses a closed (private) blockchain to record shipping data, and has seen the number of billing disputes drop to less than 1% from 70% before the network was launched.
Walmart also uses computer giant IBM’s Hyperledger Fabric platform to detect and track foodborne illness. According to Nasdaq, the system has “reduced the time it takes to find specific food data from 7 days to just over 2 seconds.”