Category Archives: supply chain

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Oxfam to Trial Blockchain to Improve Pricing for Cambodian Rice Farmers

Oxfam International is piloting a blockchain-based farming project that aims to ensure that rice farmers get a fair price for their produce.

With 50 organic rice farmers already on board, the Blockchain for Livelihoods from Organic Cambodian Rice project, also dubbed Blocrice, Oxfam intends to introduce the program across the country.

Blockchain boost

Currently, the technology has found itself being trialed in Cambodia’s northern province of Preah Vihear. According to the Oxfam website, it will “contract farming between farmers’ cooperatives and exporters, rice cracker makers and other buyers. Contracts predefine the primary purchase price, trade volume, transportation method and other conditions.”

The pilot will digitize and register these contracts on the blockchain platform, details such as primary purchase price, trade volume and transportation method are recorded, with cashless payments made to rice farmers through bank accounts for traceability.

Solinn Lim, Country Director of Oxfam in Cambodia, believes that with Blocrice, farmers gain “collective bargaining power”. Lim adds: “The sheer fact of being registered as an actor on the blockchain platform implies that people matter, Blocrice will give them a platform to empower themselves.”

Oxfam estimates that 60% of Cambodia’s workforce is employed in the agriculture industry, explaining that many of the low-income farmers and some laborers do not have the appropriate contracts with their clients. Furthermore, lack of market price knowledge and high-interest loans are putting producers under a great deal of pressure to sell produce and clear debt.

On the up

It’s not a fantastic situation for a key industry within Cambodia. That said, over the past couple of decades, rice exports have been increasing significantly. Since 2013, Cambodian rice exports have risen by 32.5%; this is according to World’s Top Exports (WTEx), who also report Cambodia as the ninth largest exporter of rice in 2017, selling USD 331.1 million worth.

The 50 farmers who are part of the pilot are registering their profiles as well as uploading key data such as expected yields and planting areas. The project is taking place through March 2019 during the rainy season, which is the country’s prime season to harvest and sell rice.

It’s an exciting prospect for the country. Blocrice pilot participant Kann Kunthy, Managing Director of rice exporter AmruRice said, “We expect to bring traceability, transparency, financial literacy and best practices [to] contract farming in Cambodia.”

The project will be targeting the European market which accounts for almost half of Cambodia’s rice exports. Thanks to the EU’s preferential tariff exemption, Cambodian rice exports have benefited greatly.

However, the European Commission has concerns regarding certain human rights issues that occurred in the run-up to a July election, which may cause Cambodia to be removed from the special tariff.

With any luck, the implementation of the blockchain product could ease the worries of the EU and reinvigorate the rice export industry entirely. Furthermore, the project intends to expand into other provinces and exports including cassava, cashew nuts, maize and pepper.

 

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UN Publishes White Paper on Supply Chain Blockchain Applications

The United Nations Center For Trade Facilitation and Electronic Business’s (UN/CEFACT) blockchain project team recently published a ‘Blockchain White Paper’ for public review, describing technical applications for blockchain in supply chains. The paper describes an intent to use blockchain technology to support supply chain interoperability, efficiency, and integrity.

Since the 1980s, UN/CEFACT standards have played a fundamental role in facilitating trade and making economic supply chains more efficient. The Blockchain White Paper analyzes how blockchain technology can be maximized to further the organization’s mission.

It says the UN/CEFACT will focus on a few aspects of blockchain technology including smart contracts, electronic notary and decentralized process coordination. The ability of blockchains to transmit money with cryptocurrency and to facilitate digital voting will not be focused on, since the primary goal of the paper is to see how blockchain could improve supply chains.

The paper states that blockchain could improve supply chains by moving away from traditional paper record systems and replacing it with a digital trustless system. If the UN/CEFACT were to implement blockchain technology, it could standardize supply chain records into one database rather than the many different databases there are today, and the ledger would be immutable, meaning that no one could go in and manipulate the data in order to commit fraud. This would make a blockchain ledger solution for supply chains more reputable and credible than older systems.

The UN/CEFACT says that many different types of supply chain data can be transmitted through a blockchain ledger, including consignment and shipping, invoicing, insurance, and movements through international customs.

On the downside, blockchain doesn’t solve the supply chain interoperability problem, and the UN/CEFACT says it must be careful to choose the right blockchain technology since not all blockchains are created equal. Indeed, some cryptocurrency blockchains have been compromised recently by 51% attacks.

According to the UN/CEFACT Blockchain White Paper, more research and development is needed to ascertain the potential of blockchain to facilitate international trade, and it is suggested that blockchain experts from member nations work together to develop new blockchain technology that could be implemented for supply chains.

 

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