When people think of commodities, usually Coffee is not one of the first to come to mind. However, being the second most traded commodity following petroleum, over 125 million people rely on coffee beans as their primary source of income. Blockchain technology is offering these farmers a way to a fairer price for their goods and more efficient payments.
With a majority of coffee growers being small-scale farmers who sustain themselves on less than $2 a day, Bext Holdings Inc. through their Bext360 app looks to enable farmers by making it easier to get a fair price and be paid instantly. But isn’t that what fair trade coffee is for? Well, according to a study based on Costa Rica for a dataset spanning more than a decade, there is no evidence that fair trade certification has any impact on workers.
Bext’s robot allows buyers to quickly scan the weight and quality of farmers coffee bean is on location by utilizing optical sorting to determine a percentage of the product which is spoiled or ready to go in a batch. Bext360 will offer instant payments to farmers, and these machines will pay for themselves as while they analyze and collect goods, they make digital payments for loans and interest directly to lending organizations.
Batches typically come in 30-40 pound bags, and rates go up or down depending on the quality of the product. Price is revealed to seller and buyer on the spot, where they can then negotiate a price using the app. Stellar’s blockchain technology is used to create an immutable record of the origin of the beans and information on the buyer and price paid:
“bext360’s first product is similar to Coinstar, but for coffee. Using machine learning and artificial intelligence, the machine will evaluate the coffee cherries and beans and then divide them into grades based on quality. Farmers will have access to a mobile app to view amounts of each grade and accept offers for payment. Powered by Stellar’s network, the application immediately pays the farmers for their product. This solves the huge problem of a timely payment.”
To actually see the income for their coffee beans would usually take months, and the real-time payment processing will enable farmers, many of them women, to achieve economic empowerment.
This innovation does not have to stop with coffee either. Agriculture technology like this could be applicable in most products sold, with the founder and CEO Daniel Jones already having eyes to implement this in the Cocoa industry, ensuring that chocolate, as well as coffee, is accountable regarding where it came from and whether the farmers were paid fairly or not. Perhaps one day this technology could be used to mediate transactions at local farmers markets.
“Consumers are more enlightened than ever before. And companies want to meet their high standards,” Jones said. “But in general, groups working on fair trade spend a lot of overhead on tracing materials. They use rudimentary tracing mechanisms. And it is very imprecise. People in the field can still get exploited.” With his experience exporting minerals from the Democratic Republic of the Congo, Jones wants to bring transparency to the supply chain with Stellar.
To get started on this ambitious venture, bext360 has raised $1.2 million of funding from SKS Venture Partners, whom typically invest in FinTech solutions. The ability to use a smartphone to pass payments directly to a farmer and cut out the middleman, which usually take more than their fair share, is what caught their attention, claims Investor Mark Spencer.