Can the blockchain help these farmers in Malawi?
As part of the UN’s One Planet Summit which kicks off today, Provenance has announced a project to test whether blockchain technology can both improve transparency in product supply chains and secure the livelihood of farmers at source.
Tue 12 Dec 2017
Using Malawian tea farmers, the fintech company has brought together experts to help at each stage of the project, from verifying the tea at source to tracking its travels before ending up with the consumer.
Both retailers and tea drinkers will be able to track and see where the tea has come from, showcasing a transparent supply chain that's sustainable and helpful. Would you be happier if you could trace back everything you buy to farmers and make sure everyone has been fairly treated in the supply chain?
“Building on Provenance’s successful work using blockchain technology in supply chains, we aim to design and demonstrate the power of a collaborative ecosystem approach to tackling the Sustainable Development Goals, through linking preferential financing to verifiable sustainability claims and transparent supply chains,” said Jessi Baker, founder of UK-based fintech firm Provenance.
But it's not just about the consumers. For the farmers, once a transparent chain is in place, it helps them get preferential loans and micro-finance from banks who can verify their business. With access to cheaper capital, farmers can increase productivity on their existing farms.
Up to 10,000 Malawian tea farmers could be helped in this pilot alone and if it's successful, it would help redefine the role of new fintech (financial tech) in helping to make supply chains sustainable in any number of businesses. For this pilot scheme, Provenance is working with Barclays and Standard Chartered to support the tea farmers but there are 1.5 billion families who depend on small-scale agriculture worldwide - so the possibilities are endless.
Blockchain-underpinned supply chains would also help big business prove that its ingredients and processes are sustainable to a growing base of consumers who want to know exactly how and where their food was grown, their clothes were made and so on.
So how does blockchain work?
The technology works by gathering and recording standardised information from farmers about their produce, including production quality and price, using virtual identifiers that are encoded on a blockchain. This makes second and third tier supplier information available to all parties that can access that blockchain, making the supply – and its sustainability information – traceable and transparent.
What is the One Planet summit?
The One Planet summit has been organised two years after 2015's historic Paris Accord on climate change. It brings together national, regional leaders as well as international finance and fintech companies to see how they can push forward efforts to combat climate change.