How blockchain is used in the coffee supply chain
Blockchain has a lot to offer to agriculture, helping the oldest industry reach a new dimension. Everything related to data and transactions can be improved with traceability, security and speed. All these features and benefits can transform agriculture and help it scale. With demand for food and agricultural products expected to increase by 70% by 2050, scaling is more than a necessity.
Decentralized Ledger Technology (DLT) can be intelligently blended with other innovative technology solutions, including machine learning, Internet of Things (IoT) devices, artificial intelligence (AI), satellites and drone imagery, to increase benefits.
The use of blockchain can help farmers and other actors streamline supply chain processes to increase trust with customers and stakeholders. Tracking the origin and transport of a product can be done in real time, with the blockchain providing an unmatched level of security for data storage and sharing. Traceability can transform insurance processes, speeding up processes that can take months.
One of the most active agricultural sectors adopting the technology is the coffee industry, the largest segment of the hot beverage market, expected to reach global revenues of $541 billion by 2025, driven largely by a continued boom in specialty coffee in food service. The largest coffee producers, including Brazil, Vietnam, Indonesia and Colombia, should be interested in promoting the use of blockchain to increase revenue.
Coffee segment revenue will reach $495.5 billion in 2023. The market is expected to grow at a compound annual growth rate of 4.47% (CAGR 2023-2025). Source: Statista
How Indonesia’s Solok Radjo Cooperative uses blockchain
Indonesia is the fourth largest coffee producer in the world. Coffee plantations cover more than 1 million hectares of the country’s territory, with over 90% of the land cultivated by small-scale producers.
Solok Radjo, a cooperative of over 3,000 coffee farmers based in West Sumatra, is using blockchain thanks to a partnership with Dimitra, a global AgTech firm.
Dimitra offers a wide range of solutions for the global agricultural industry, with its applications combining blockchain with AI, IoT, satellites and mobile technology, among others.
Solok Radjo uses Dimitra’s Connected Farmer and Connected Coffee applications. These easy-to-use solutions help coffee farmers improve their value chain by streamlining data collection and sharing, quality assurance, coffee processing, cupping and more.
One of the most painful challenges for coffee farmers, especially the smaller ones, is meeting certification and other export requirements. Dimitra’s Connected Coffee app helps Solok Radjo implement food safety and growing requirements to be ready for its export markets, including the US, Australia and Europe. This increases profitability and benefits thousands of local farmers.
Dimitra’s Connected Coffee app provides end-to-end supply chain traceability and product quality management. Source: Dimitra
Thanks to the collaboration with Dimitra, Solok Radjo is a forward-looking agricultural collective that uses environmentally friendly farming methods to grow its crops. They inspire coffee farmers to maximize the productivity of their lands. The cooperative handles the processing and marketing of the coffee, so that the farmers can reap the benefits. The ecosystem also includes cattle as an integral element that serves multiple purposes: providing protein to humans, diversifying income through domestic sales, and improving soil health through the use of fertilizer on plantations.
Blockchain benefits farmers around the world
Dimitra provides blockchain and technology solutions for various agricultural sectors worldwide. The flagship product is Connected Farmer, which empowers small and large scale farmers by improving the supply chain and helping with finances. The application contains several module components, including:
- My Farm – helps farmers register their businesses and record critical farming operations.
- My Crops – used to track crops and fertilizers. It involves field-level sensors and integrated satellite imagery to provide data and AI-based analytics.
- My Livestock — this module tracks the livestock value chain, including birth, vaccinations, diseases, sales, exports and logistics.
Future services are already planned, such as lending, which will enable farmers to borrow funds for inputs such as seeds, fertilizers and chemicals and repay the loan at harvest. In addition, the Insurance module, which is also on the roadmap, will help farmers manage their insurance documents and data, and provide protection against drought, floods and pests. Payments will be determined based on insights from satellite images or public reports.
Dimitra’s ecosystem, which revolves around the Connected Farmer app, is powered by the native Dimitra token. The ERC-20 token encourages farmers to perform certain actions and is used for funding within the ecosystem.
Thanks to blockchain technology, farmers can increase their profitability by focusing on the quality of their products and expanding their reach.
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