Unique blockchain project for a living wage for Indonesian farmers 16/06/2017

At this moment, 55 Indonesian farmers are picking 1,000 coconuts in total and will receive a living wage for that from Fairfood. The route that the coconut will take to Dutch consumers can be followed in full thanks to the blockchain. In this way, Fairfood is demonstrating that this new technology can constitute a solution for one of the most important problems in the coconut production chains, namely lack of transparency.

“We will use the results from this pilot project to actively work with retail and industry for the millions of coconut farmers who live at or below the poverty line,” according to director Sander de Jong. The Fairfood coconut is being partly financed by the incentive project ‘Blockchain for Good’ of the SIDN Fund.

The Fairfood coconuts will be delivered in the Netherlands as of 10 July.  Each coconut has a bar code that provides the same information, but then about your specific coconut.

Coconut on the blockchain

In blockchains (decentralised databases), not only financial information (as with Bitcoin), but also chain-sensitive information can be recorded in a transparent and immutable way. “We think that blockchains are going to play an important role in making food chains more transparent and sustainable”, according to Marten van Gils, manager of the blockchain project in Indonesia. In order to convince retail and industry of this Fairfood will be importing 1,000 coconuts itself and recording this process on the blockchain, together with blockchain pioneer Provenance. By scanning the coconut, consumers can see where it comes from and what was paid to who precisely.

Transparency and coconut

The production chain of coconut is long and complex. Coconut comes from areas that are difficult to reach, as a result of which there is already a lot of distributive trade by nature. Each link in the chain gets a piece of the pie. The price of a coconut is sometimes three times higher before it reaches the local factory. Better and fairer agreements can be made in a transparent process, as a result of which excesses will decrease and we can check whether farmers receive a fair, living income.

Size of the coconut problem

There are around 16 million coconut farmers (smallholder farmers) worldwide, almost three times the amount of cocoa farmers. Many coconut farmers don’t earn enough to support their family or even live below the poverty line Most coconut is processed into coconut oil, of which the Netherlands is the second largest importer in the world behind the United States. Each year, we process 107 million kilos of coconut oil into products like biscuits, sweets, ice cream and instant coffee. Due to the size of the food sector in the Netherlands, retail and industry can make a big difference if they pay a living income for their coconut from now on.

Campaign and coconut alarm

Fairfood is committed to a living income for coconut farmers. The NGO wants to bring abuses in the coconut chain to the light. Consumers can share their concern for coconut farmers through buying a coconut and sounding a coconut alarm.

About Provenance: Provenance wants to connect the consumer with the source of their products. The software collects product information and records the journey the product has taken in a safe, dependable and accessible way. The software uses mobile technology, blockchain technology and open data to do this.