The Commerce Ministry has launched a blockchain-based online marketplace for coffee to help initiate Indian farmers into the market. This e-commerce platform is designed to help farmers get a fair price for the coffee because it removes middlemen.
Commerce Secretary Anup Wadhawan said this blockchain is an experimental programme to increase transparency in the coffee industry.
“This pilot project will help integrate farmers with markets in a transparent manner and lead to realisation of fair price for the coffee producer,” he said.
Wadhawan said premium Indian coffee is highly coveted because it is the only variation in the world to be grown under shade, and then handpicked and sun-dried. However, the farmers’ share of coffee is “very meagre”.
The blockchain e-marketplace will work as an app that farmers can use to sell coffee directly to exporters, effectively removing intermediaries.
How will this work?
About 15 to 20 coffee farmers, exporters, roasters, importers, and retailers in India and abroad are already registered on the app. They can make trade transactions amongst each other.
The coffee farmer adds information on where the coffee is grown, crop elevation, and any other certifications. Then, a block is created for each lot a farmer sells. When coffee is delivered, consumers can use the product’s QR code to track the shipment’s journey.
Reuters explains, “Blockchain works by providing a shared record of data held by a network of individual computers rather than a single party. Its supporters say this makes it hard to tamper with, thereby ensuring a secure way to track goods along the supply chain.”
Wadhawan said this app will help to build trust and long-term relationships between producer and consumer.
France and Ethiopia are the only other countries to use a blockchain processor for coffee sales.
Coffee culture in India
From filter coffee to Cafe Coffee Day, India has had a coffee revolution over the past few years. Experts say the country’s coffee drinkers are now experiencing the third wave of this revolution, where artisanal joints, namely Sleepy Owl, Blue Tokai, and The Flying Squirrel, have become go-to choices.
“… the younger metropolitan coffee drinker is also perhaps discovering what it means to taste—whether the roast is fresh, dark or light, the nose imbued with vanilla or spice, the blend more arabica than robusta or balanced—and indeed whether s/he likes it at all, which is really what any discovery of food and drink should be about,” said the Economic Times.
States like Karnataka, Kerala, and Tamil Nadu account for most of India’s coffee production, reports the Coffee Board of India. Andhra Pradesh and Odisha also contribute.
Between 2017 and 2018, Karnataka produced 222,300 megatonnes (MT) of coffee beans, Kerala harvested 65,735 MT, and Tamil Nadu grew 17,440 MT.
Karnataka’s Chikmagalur, Kodagu, and Hassan coffee plantations are the most well known in the country.
In 2018, the Post Monsoon Crop Estimate for coffee is placed at 3,19,500 MT. However, this is a 15% decline from the previous year.
What is impacting production and how?
Coffee Board of India credits the decline to climate change, especially heavy rain that causes flooding and landslides. Deforestation is also destroying the shade required to grow India’s unique blends. These circumstances make coffee production a financially unstable venture and disadvantages poor farmers.
Moreover, Indian consumers are also changing their outlook when it comes to consumption. Millennials and Gen Z, are increasingly prioritising ethical production where farmers are treated well and fairly compensated.
Young Indians also love a good narrative. It’s not enough to simply have a functioning product anymore; the production journey must also have a sense of purpose and a degree of social impact.
The blockchain app fits perfectly in this climate. It allows consumers to get to know the coffee beans and the farmers who produce it.
Rhea Arora is a Staff Writer at Qrius.