Two companies dealing in coffee export in Ethiopia have joined forces to address the problem of unprocessed coffee export by utilising the blockchain. Bext360 have come together with Moyee to tackle this challenge through the distributed ledger technology.

In the last fiscal year, Ethiopia made $866 million from the export of coffee. However, the country’s supply chain is still very dubious with farmers not being paid what they deserve. If coffee was roasted, packaged and branded in Ethiopia, the country would have earned $2.7 billion. Currently, once the coffee has undergone the hulling process, the majority of the beans are then exported to Europe by freight.

“The French don’t export grapes they export a branded bottle of Moscato,” said the co-founder of Moyee, Shane Reilly. “This shouldn’t be any different for coffee growing countries like Ethiopia and Uganda. Blockchain removes the middle man and encourages trust because consumers know exactly what they are drinking, and where it has come from.”

With a roastery in Addis Ababa with local employees, Moyee expects the FairChain platform to be a game changer as 99.9 percent of the coffee is roasted in Europe. Bext360, on the other hand, has built a platform that allows for transactions to be monitored in real-time. They have partnered with a washing station in the Jimma Region of Oromia where coffee farmers usually take their cherries to sell. This is where the chain will start. There are photos of each farmer available online with information about the kilos they have brought to the station as well as the market price and what they are getting paid.

The Blockchain Coffee Process

As the coffee cherries go through the supply chain, they get assigned crypto tokens that will show the complete value added from bean to barista. As coffee goes through its lifecycle, each stage will lead to the creation of a new token that will represent the commodity in its new state. The blockchain-based platform, FairChain, will record everything from payments to roasting to freighting to pricing. Moyee will pay farmers a 20 percent premium which is meant to be a good start towards giving them a better wage.

“This is the next big step in a coffee revolution,” said Moyee’s Co-Founder, Guido van Staveren.

“Our platform changes things entirely. Crypto tokens enable us to pay farmers immediately and directly. Smart technology is being used to benefit the men and women who produce our coffee.”

Besides having a continuously growing list of records that are secured and connected using cryptography, the blockchain cannot naturally be modified without subsequent blocks being altered. Moyee and Bext360 are using the blockchain that was created by Stellar. Stellar, unlike the Bitcoin network, was designed to handle a large volume of cross-border micropayments.

“The Stellar blockchain is a way to compensate farmers more fairly for what they actually produce,” stated McCaleb. “Coffee cultivators load their daily haul, usually about 30 kilograms, into a machine equipped with sensors and optical recognition tech that sifts and sorts coffee cherries. This automated appraiser assigns each a grade based on quality (bigger and riper is generally better). The machine then links this output to special crypto tokens tracking the produce across its journey.”

Blockchain to Drive Transparency

Moyee’s partnership with Bext360 comes weeks after Starbucks announced they would be launching a pilot program known as “traceability technology” that will utilise blockchain technology into its coffee supply chain. The pilot program will involve select coffee farmers in Rwanda, Costa Rica and Colombia that is meant to “develop next-level data technology to log and share real-time information along the journey of coffee beans with the aim of driving positive impact to smallholder farmers within its supply chain”. This is after the coffee company was accused by Oxfam in 2006 of refusing to pay Ethiopian coffee farmers their wages.

In the recently made announcement regarding the launch of the pilot program, Kevin Johnson, Starbucks’ CEO said: “Over the next two years, we will look to demonstrate how technology and innovative data platforms can give coffee farmers even more financial empowerment. We’ll leverage an open-source approach to share what we learn with the rest of the world.”

As coffee production in Ethiopia is a deep-rooted tradition that goes back many centuries, Ethiopia accounts for approximately 3 percent of the global coffee market with 20 million people relying on it for their livelihood. However, the country only receives about 15 percent of the value in a bag of beans. And while the price of the commodity in question is increasing, the amount going back to the developing countries is squashed.

Groupon, one of the clients that Moyee recently signed, continues to show Moyee’s client base growth. As big organisations continue to push for fair business and sustainability, socially responsible products are getting more demand. As such, the blockchain presents a good opportunity for that responsibility to be monitored transparently and in real time.