Swiss-Ghanaian startup Koa is launching a transparent system for paying cocoa farmers that uses blockchain technology.
In an international collaboration with Germany’s seedtrace and South Africa’s MTN Group, Koa has implemented a new, tamper-proof and scalable transparency system that records payments made to cocoa smallholders. Mobile money payments are verified in real-time and are irreversibly stored on a blockchain. Transactions are made publicly available, differentiating themselves from existing certification labels, providing consumers with direct proof that farmers receive the full payment.
Over the last decades, supply chain scandals and cocoa farmer poverty remain concerns in the cocoa industry, leading to increased consumer demand and political efforts to improve transparency and accountability. Yet, consumers struggle to put their trust in brands and their initiatives. While products carry certification labels, the inevitable question remains: How can I be sure that farmers receive the money that they’re entitled to?
“We want to get rid of long, non-transparent supply chains,” said Anian Schreiber, Koa managing director and co-founder. “Instead of claiming good practices, we put our cards on the table to let the consumers witness each transaction to farmers.”
To develop the system, Koa collaborated with Berlin-based seedtrace, a SaaS startup on a mission to make supply chain transparency the norm. Seedtrace has created a system that removes the room for error and enables customers to monitor the extra income paid to farmers.
"We verify each transaction and store it on an open, low-emission blockchain,” said seedtrace CEO Ana Selina Haberbosch. “Together with Koa, we thereby set new standards assuring that the information is verified, cannot be manipulated and is accessible in real-time for all stakeholders.”
The new system is unique as it connects blockchain with mobile money transactions.
“Instead of having a person enter information on the blockchain, it links the data from mobile money transactions,” said Francis Appiagyei-Poku, finance and administration director at Koa. “This combination allows us to verify additional farmer income, deliver full proof and increase trust among stakeholders.”
To make this possible, Koa and seedtrace have partnered with MTN Group, Africa’s largest telecommunications operator, whose mobile money transaction data serves as secure inputs for the blockchain provided by U.S. company Topl. Transparency is achieved by implementing clear and compliant data management processes that protect individual data and keep farmers informed of data use.
Luxembourg pastry chef Jeff Oberweis is taking advantage of the transparency system. A QR on an Oberweis chocolate product containing Koa ingredients leads consumers to the seedtrace platform, where they can see the additional farmer income.
“In 2022, we want to have proof that people are paid fairly and that wework on an equal footing throughout the value chain,” Oberweis said. “Koa's integration of the blockchain guarantees total transparency and allows us to set an example to the industry.”
Koa is known for upcycling the white pulp that surrounds the cocoa beans, increasing the income of Ghanaian smallholders, while offering a solution to reduce farmer poverty. Koa is working with more than 2,200 cocoa farmers and will add an additional 10,000 farmers to its value chain in the next two years.