Visions of a Future Where Sustainability Meets Technology
A reflection on our key takeaways from The Only Way is Up conference on living wages and incomes in global agri-food supply chains
October 15, 2019Thought Leadership
Last week, Topl’s Founder and Chief Architect, Chris Georgen, participated in an international conference called The Only Way is Up. The conference — hosted by Topl’s partner Fairfood, alongside Hivos, Fair Trade, IDH Sustainable Trade Initiative, the Rainforest Alliance, and the German Federal Ministry for Economic Cooperation and Development as well as the Dutch Ministry of Foreign Affairs — brought together global stakeholders and change-makers from across the private sector, government and civil society to discuss solutions, roadblocks and lessons learned from their experiences working to establish living wages and living incomes in global agri-food supply chains.
Chris was invited by Fairfood to introduce and moderate the panel, “Where sustainability meets tech”, which featured representatives from Fairfood, AgriLedger, COIN22, and Trabocca. The speakers presented their experiences across the spectrum of technology and the economics of agri-food supply chains, especially focusing on their work in developing countries. They discussed how innovation in the areas of financial and distributed ledger technologies can be employed to create positive impacts on the lives of farmers in low- and middle-income countries.
A big question about the systemic changes required for this impact to be achieved was eloquently addressed by Trabocca’s Sander Reuderink. Sander’s presentation discussed the implementation of a new equation to produce “poverty-free coffee”, which he defines simply as: “coffee for which the producer was paid enough to generate a living income for his family”.
Traditionally a farmer’s income has been dictated by the following formula:
(Unit Price x Volume) — Cost of Production = Farmer Income
Sander argued the need for a new formulation, defined as:
(Living Income + Cost of Production) / Volume = Unit Price
This ensures the farmer’s needs are met as a bottom line.
This reformulation, which places a living income as a central factor in price-setting, requires a radical transformation of perspective from the dominant equation, in which the farmer’s needs are addressed only as a function of the current market. This is a powerful reminder that regardless of the innovations and technologies applied to the challenge of living wages and incomes in global agri-food supply chains, the most essential application is a change in the way we value the lives of the human beings who are at the beginning of those supply chains. Without this fundamental shift, fairness and equity in global agri-food supply chains will remain major challenges.
As Chris explained in the context of the global coffee industry,
"We hear stories of coffee farmers working for less than 1 Euro a day, sometimes taking in only 4% or 5% of the total amount we pay for our morning latte. At the same time, we’re heartbroken by stories of children being put to the work of harvesting and processing coffee, cacao, or tea for our consumption."
Topl has taken an active role in transforming this system by empowering companies that want to induce change through our blockchain platform. As a trail-blazer in this space, Topl has a unique perspective on the role technology can play in creating more sustainable markets.
Framed by this perspective, Chris’s opening of the panel depicted a vision of a future of sustainability, inclusion and engagement in the coffee sector, enabled by Topl’s blockchain infrastructure:
"The picture I’m going to be painting is of a day in the life, ten years from now, of a coffee farmer…
Our day in the life begins at 5:30 am before sunrise, because there are some things that technology probably won’t change about farm life. It’s harvest season, so once our farmer reaches the section of coffee bushes that he’ll be picking from today, he takes out his smartphone and logs into his Topl-powered Fairfood traceability application using just his fingerprint. At this time, he’s going to take a few pictures to show where today’s cherries are originating from. These images, along with a simultaneously captured geo-tag will form the first chapter of the story that consumers see when they purchase our farmer’s coffee.
The harvest is now going to continue undisturbed by technology until our farmer arrives at the washing station with his day’s yield. At the station, an attendant weighs our farmer’s bushels and then scans a QR code generated by our farmer’s app to log their origin. Linking this transaction in such a way adds additional information to the coffee’s story while at the same time augmenting our farmer’s self-sovereign digital identity as part of his production history, which over time will increase his credit-worthiness.
The attendant now records the weight of the provided bushels which immediately triggers a push notification to our farmer’s phone for his review. Once the farmer confirms both the day’s price and the quantity he’s provided, a two-way transfer is executed on the Topl blockchain, with a digital twin of the coffee moving to the washing station and an e-money transfer to the farmer’s account. Now, right here I want us to observe that something a bit different happens. Since our farmer is actually a part-owner of this cooperative washing station, only 90% of the funds flow to him directly. The other 10% is moved into his contribution account at the washing station as they are attempting to save up money to purchase the equipment needed to roast beans themselves.
From the washing station, the coffee continues its journey accumulating information to complete the story that our farmer opened. By the time it arrives in stores or cafes, a QR code is accessible to consumers, which when scanned will provide them with a complete, verified, and batch-specific story of the coffee they are purchasing. It is the transparency and reliability coupled with the ethical content of this story all enabled by blockchain technology that differentiates this coffee and justifies the price premium it commands.
I want to end by saying that this story is only the beginning. We can imagine incorporating the verification of sustainable practices like agroforestry which opens an entirely new source of revenue for our farmers via an instrument we call an impact credit, a tokenized representation of a specified impact that can be sold to governments and multi-lateral institutions chasing verifiable results. At the same time, we can imagine how the digital history and credit-worthiness a farmer builds, just by recording their production, will unlock access to financing and insurance that can completely reshape the economies of rural communities across South Asia, Africa and Latin America."
The future of the coffee industry that Chris illustrates here is based on the principles of inclusion, engagement and sustainability. In this scenario, the focus is on the farmer’s role in the “bush-to-brew” journey, of which they are an integral actor. Topl’s blockchain technology works to digitally integrate the farmer in the product’s journey, empowering their visibility in the process and providing an unprecedented level of financial transparency and agency to the farmer.
The QR code system, which relies on information captured through Topl’s blockchain, is already in use by Fairfood. This system enables consumers to become consciously and mindfully engaged with not only the journey of the product they purchase but also the human beings behind that product. Finally, this system plays a fundamental role in reframing the conversation around global agri-food supply chains, placing emphasis on sustainable employment practices and a product’s origin and journey by making this information available and accessible for consumers.
In order to successfully apply today’s emerging technologies to the challenges of problematic, global agri-food supply chains, like coffee, we must first refocus on the needs of the farmers themselves. This does require a paradigm shift, which companies in high-income economies that work with these supply chains have a responsibility to implement.
Luckily, as Chris comments,
"We believe we can mark where we’re at right now as a turning point…for two reasons. First, as a result of some of the truly disruptive technologies that we’ve recently seen emerge and how they’re already being leveraged by farmers around the world. And second, because of rapidly shifting consumer preferences toward products with ethical and sustainable origins”.
Topl is playing a role in this transformation, and our experience at The Only Way is Up conference makes us excited to be a part of a movement where others are committed to shifting the paradigm too.