Global charity organization Oxfam has launched a blockchain technology platform aimed at enhancing the transparency and traceability of the rice supply chain in Cambodia.
Known as BlocRice, the app uses distributed ledger technology to implement smart contracts where details such as the farm gate price of organic rice, trade volume and method of transportation are recorded, according to the Khmer Times.
The project which will initially work with 50 rice farmers in Cambodia’s Preah Vihear province during the first year is expected to boost the bargaining power of the participants in negotiations with the buyers of their produce potentially netting them higher prices.
“The application of blockchain technology is expected to enhance the negotiation power of small-scale farmers in their rice value chains, who are usually poor primary producers,” the country director of Oxfam in Cambodia, Solinn Lim, said.
Additionally, the BlocRice app will connect all the various actors on the supply chain – the farmers, Cambodian rice exporters and Dutch importers – right from the planting season.
“All actors, from the agricultural cooperatives up to [Dutch rice manufacturer] SanoRice, will have a shared, digital contract,” Solinn said. “During the process, from planting to the manufacturing of rice crackers, the chain actors will share information with each other through their shared database powered by blockchain.”
During the pilot phase of the project, cashless payments to the farmers will also be introduced and this will be facilitated by Cambodia’s biggest local commercial bank in terms of client numbers and assets, Acleda Bank. The participating farmers have already opened accounts with the leading financial institution.
Currently, it is estimated that around 60% of Cambodia’s labor force works in the agricultural sector. Enhancing transparency especially with regards to prices is thus expected to empower a large section of the Cambodian society and improve livelihoods.
While the blockchain pilot is currently restricted to organic rice, in future it could be expanded to other Cambodian agricultural products such as cashew nuts, pepper and cassava. Oxfam also expects to expand the number of farmers signed up to BlocRice from 1,000 by 2020 and 5,000 by 2022.
The Rice Capital of the World?
With Southeast Asia being a major rice producer, Cambodia is not the only country that is exploring blockchain technology with a view of benefiting farmers. As reported by CCN last month, Thailand’s Trade Policy and Strategy Office (TPSO) has also indicated that it will unveil blockchain projects meant to, among other things, increase efficiency in the rice export sector.
“Using blockchain for the process could reduce processing time to less than three days, improving transparency and increasing confidence and trust for exporters and foreign importers, benefiting Thai farmers,” the director of TPSO, Pimchanok Vonkorpon, was quoted as saying in October.
Featured image from Shutterstock.
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