Oxfam Cambodia and Amru Rice will launch next month a pilot programme based on blockchain and smart contract technology to improve living standards for local farmers.
The project, called BlocRice, is powered by cutting-edge technologies and aims to improve farmers’ livelihoods by increasing the transparency and traceability of international supply chains, according to Lim Solinn, Oxfam’s country director.
Smart contract technology lies at the core of the programme. According to Ms Solinn, smart contracts are digital three-way arrangements between producers, exporters and retailers. Their mission is to facilitate, verify or enforce the negotiation and performance of a contract.
Ultimately, smart contracts will help ensure producers receive their fair share and are able to earn a living income from their labour and resource investment, Ms Solinn explained.
“This is a first experiment applying blockchain as a poverty reduction tool,” she said.
“This is of interest to traders, manufacturers and retailers as they will have more information over their supply chain,” she said, adding that the resulting data can also be used by NGOs advocating for fair prices and proper living standards for people throughout the supply chain.
Running from April this year to March 2019, the testing phase of the programme will be carried out with a cooperative of organic rice farmers in Preah Vihear province. The cooperative will be linked up using blockchain and smart contract technologies with every agent involved in the supply chain, including SanoRice, the Dutch rice cracker manufacturer that will use the cooperative’s rice as raw material for their products.
“All actors, from the agricultural cooperatives up to SanoRice, will have a shared, digital contract. 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,” Ms Solinn explained.
She added that data yield by the programme will be analysed to find ways of strengthening local agricultural communities. “This is expected to empower them in price negotiations and in finding buyers.”
The project will also introduce cashless payments to farmers, using personal bank accounts provided by Acleda bank. The agricultural cooperatives will make payments into these accounts.
Song Saran, CEO of Amru rice, a company that will also be involved in the programme as an exporter, told Khmer Times that the project will increase transparency in the supply chain and enhance the livelihoods of farmers.
“Our aim is to increase the market for Cambodian farmers,” he said, adding that he hopes the pilot programme will be a success and that they will be able to expand it to more cooperatives in future iterations.