TECHNOLOGY /AGRICULTURE

Coffee’s
blockchain
brew
It took two seasons,
but farmers have
taken to Coffee Board of
India’s blockchain-
based portal that could
increase their profits
as well as bring
transparency to the trade
AKSHIT SANGOMLA
BENGALURU

W
HEN THE Coffee Board of India (cboi)
launched a blockchain-based e-market plat-
form for farmers on March 28 this year, the
response was dull. Only 23 registered, and just 100
tonnes of India’s 0.32 million tonnes of coffee produced
in 2018-19 was sold via the platform. The lukewarm re-
sponse was probably because the coffee season, which
starts from November and lasts till March, was about to
end. However, fortune has changed with the season. By
October-end, about 30,000 farmers have registered on
the e-market platform. “There is a huge global market
for Indian coffee. We are pushing farmers to join the
platform so that they get better rates for their produce.
Blockchain technology will help in this,” says Y B Venkat
Reddy, technology officer at cboi
This is the first time a government agency is using
blockchain technology in the country. Bengaluru-
based Eka Software Solutions has developed the web
portal and the mobile app (both accessible on the
company’s website ekaplus.com) for cboi. Farmers, ex-
porters, curers, roasters and international buyers can

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 register on it, and trade. The reg-
istration is complete only after a
cboi official verifies the details of
the participants. Once this infor-
mation is recorded, it cannot be
fudged because of the very nature
of the blockchain technology.
Data of any interaction on a
blockchain-based platform is con-
verted into blocks and added to the
blockchain with an encrypted code
known as a hash. If the block has
to be manipulated then the hash of
every subsequent block needs to be
manipulated. As the number of
blocks keeps increasing, the ma-
nipulation becomes more difficult.
For example, the Bitcoin block-
chain currently has close to 0.6
million blocks.
Moreover, manipulating the
hashes of all these blocks requires
enormous computation power which
would, in turn, mean spending a lot
of resources and money. This makes
fudging data practically impossible.
“Blockchain offers unmatched tra-
ceability and increases the transpa-
rency, accountability and efficiency
of the coffee supply chain,” agrees
Shuchi Nijhawan, vice-president,
New Business and Global Human
Relations, Eka Software Solutions.
If the buyers are assured of the
quality of the coffee, which is often
decided on the basis of the region
it comes from, they are likely to
offer better price. Considering that
70 per cent of India’s coffee is ex-
ported and 40 per cent of the ex-
port is of the six coffee varieties
that have a Geographical Indica-
tor tag, the initiative gains all the
more importance. India’s coffee
production too has declined by 10
per cent between 2016 and 2018,
as per cboi data, and it is crucial
that farmers get a better price for
their produce.
The other major advantage of
30-31Special Report-04.indd 31
the technology is that it removes in the buyers, lead to a greater
the need for intermediaries. Farm- number of transactions and help in
ers have traditionally sold coffee scaling up. cboi will also involve
through agents. Since most farmers international coffee curers, whose
do not have storage facilities, they certificates will have more value,
give coffee to agents, sometimes says Reddy. Officials are also going
even without receiving payment. door-to-door to explain the plat-
Agents contact buyers, draw the form to farmers and to get them
sale-purchase contracts and then to register.
pay the farmers, after taking a 5-10 However, blockchain is not with-
per cent cut. Often agents hire other out shortfalls. The biggest concern
agents for different services, all of is the use of cryptocurrenies, which
whom get a share in the coffee-trade too are based on blockchain tech-
pie. “Farmers get less than 5 per nolgy but are illegal in India. For
cent of the money for every cup of this reason, cboi is not using block-
coffee sold,” says Reddy. These lay- chain for financial transactions,
ers of agents can be removed says Reddy. The other issue is buil-
through the use of this technology ding trust among farmers. Though
because not only does it connect the response this season has been
BLOCKCHAIN OFFERS UNMATCHED TRACEABILITY
AND INCREASES THE TRANSPARENCY, ACCOUNT-
ABILITY AND EFFICIENCY OF THE COFFEE SUPPLY
CHAIN. IF THE BUYERS ARE ASSURED OF THE
QUALITY, THEY ARE LIKELY TO OFFER BETTER PRICE
farmers and buyers, it also provides good, there are 0.35 million coffee
for drawing the sale-purchase con- growers in the country, who have
tract. This has become possible been selling through agents for
through the use of Ethereum, a decades and need to be won over for
blockchain-based software that has the initiative to succeed.
“smart contract” functionality. “It would help if the government
A smart contract is a self-enforc- can insure the trade,” says Mohan
ing piece of software that enables Kumar, who has a 60-hectare coffee
parties on a network to make an estate in Haskavalli village of Kar-
agreement without the need for a nataka’s Hassan district. “There
legal contract. “The contract cap- have been instances of coffee curers
tures counter party information, storing coffee on behalf of farmers,
quality and quantity. The current then selling it and not giving any
smart contract has been made fu- money to the farmers. If there is
ture-ready to also include digital insurance, we could feel comfortable
certificates and payment gateways going online,” says Kumar. “The
in the next phase,” Nijhawan says. prices too fluctuate, sometimes by
cboi is also training its staff to as much as R50 per kg, which could
certify the quality of coffee coming hit either the buyer or the farmer.
from the farmers to provide certifi- In such scenarios too some sort of
cates which can be uploaded onto guarantee would help,” he says D T E
the platform. This will induce faith @Aks7489
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23/10/19 12:03 PM