Coffee Farmers in Ethiopia
Coffee production in Ethiopia accounts for about 3 percent of the global market with around 20 million people relying on it for livelihood in the region. These 20 million workers only see about 15 percent of the profits from the purchase of a bag of beans. Bext360, as well as several other companies, are using blockchain and AI technology to empower farmers through fair and immediate pay, awareness of the market value and direct communication with buyers. By simplifying the coffee production industry and creating transparency through a traceable digital footprint, coffee farmers in Ethiopia can reap the benefits of their harvest in a more efficient and innovative way.

Bext360

Daniel Jones launched Bext360 in Denver in 2017. Bext360 is a Software-as-a-Service platform that allows consumers to trace products from the point of origin, providing a measurable means of accountability.

This provides transparency and efficiency, ensuring fairness to all sides. Through the use of blockchain and AI, Bext360 is revolutionizing traceability in the coffee industry, doing away with the middle-man that takes most of the gains that rightly belong to the farmers.

The Solution

Stellar is a financial tech startup that can handle a high volume of micropayments across borders that allows Bext360—in partnership with Moyee Coffee Company (that sources and roasts its beans in Ethiopia)—to produce crypto tokens that immediately and directly transfers to farmers. Moyee also adds a 20 percent premium payment to all small-holder farmers.

Coffee berry harvesters take the cherries they pick and load them into a special bin (the bextmachine) that appraises the haul while simultaneously sifting and sorting the crop. Farmers have the power to accept or deny the offer for their coffee crop through the use of mobile devices, allowing them to have more freedom and bargaining power.

Bext360 has also created a platform where photos of the coffee bean farmers are available online. This profile also shows how much they are receiving for pay and what the current market value price is. Consumers can view this online profile by scanning a QR code that pulls up the exact location of the farm, and traces the journey and price of the bean to their cup.

How Does this Help Farmers?

The machine that Bext360 created allows farmers to know the value of their crop, and avoid exploitation from coffee companies. It also gives them the knowledge and incentive to take control of the market and harvest at the right time, maximizing return profit.

Coffee farmers in Ethiopia can also have a more direct relationship with buyers. Estimates determine that farmers can have about a 40 percent increase in revenue by using the bextmachine as opposed to other typical washing stations.

Going Forward — Other Companies Involved

Other companies such as IOHK are going beyond supply chain transparency. It is pursuing development in a blockchain training course for local developers who, once graduated, will go on to create their own projects in cryptocurrency in Africa using Cardano technology. This should create even more potential for improvements in all economic sectors, not just the coffee industry.

Through the innovation and scope that blockchain allows, Moyee Coffee Company is able to leave over 300 percent more value in Ethiopia compared to other coffee companies. In May 2018, Moyee also hosted a One Million Cups Campaign in Ireland that sent over $63,448 to Ethiopia. In the future, Moyee hopes to be able to use its blockchain tech to crowd-fund upgrading equipment or building new infrastructure to ultimately improve yields and sever Ethiopia’s reliance on foreign aid in the region.

The benefits of more transparency are twofold: creating greater awareness and participation in consumers, as well as improving living conditions. Living conditions may improve through more equal pay for farmers and ultimately allowing the hard-working growers to reap the benefits of their work and be able to support themselves. It gives coffee farmers in Ethiopia more empowerment over their craft, all the way to the cup of coffee that one buys at the store.

– Laurel Sonneby
Photo: Flickr

Poverty Reduction Strategy of Tanzania
Recently, the World Bank released its list of nations that most successfully reduced domestic poverty from 2000-2015. The top five countries reduced poverty between 3.2 percent and 2.6 percent between 2000 and 2015, with Tanzania reducing the highest percentage. The top fifteen countries lifted 802.1 million individuals out of poverty. This article outlines the successful poverty reduction strategy of Tanzania and international support that caused the most drastic reductions in poverty around the world.

History of Tanzanian Poverty

Historically, Tanzania has been one of the most impoverished countries in the world. In 2000, 86 percent of Tanzanians were impoverished, but this number dropped to 28 percent in 2018.

Tanzania reduced poverty by 3.2 percent in 11 years, making it the country that reduced poverty the most in the last 15 years. The poverty reduction strategy of Tanzania is due to three elements: reducing income poverty, increasing access to basic necessities and improving government infrastructure.

Economic Growth

The first strategy focuses on sustainable economic growth, which includes decreasing inflation and focusing on growing parts of the economy that have the largest poor population. The employment and empowerment programs utilized in these strategies focus on agriculture, manufacturing, mining and tourism in addition to macroeconomic growth in exports and imports. Between 2000 and 2015, Tanzania’s export volume grew from 120 to 272, making it the world’s 130th largest exporter. This successfully increased Tanzania’s GDP from $13.3 billion to $47.3 billion.

Tanzania’s unemployment rate dropped from 12.9 percent in 2001 to 10.3 percent in 2014, because of the liquid capital that injected into Tanzania’s economy, a focus on job creation and an industrial transition that opened new jobs. The economic focus of the Tanzanian government lifted thousands of individuals out of poverty and made it the seventh-largest economy in Africa.

The Impoverished Individual

The second strategy focuses on the personal needs of those in poverty. Poverty reduction efforts seek to increase the quality of life and ensure that those in poverty have access to social welfare. Efforts concentrated on education, clean water, sanitation and health services. Because of these efforts, Tanzania increased the number of individuals who had access to clean water by 9 percent between 1990 and 2009. In the same period of time, Tanzania’s health care became more accessible. As a result, child mortality rates dropped from 162 to 108, infant mortality rates dropped from 99 to 68 and the rate of malaria contraction dropped from 40.9 percent to 40.1 percent.

Another poverty reduction strategy focused on education. Tanzania made education more accessible by increasing funding for education, bettering its transportation mechanisms (including roads) and emphasizing vocational education and education for girls. This focus on education increased school enrollment from 68.8 percent in 2000 to 84.6 percent in 2015.

Tanzania’s Commitment to its People

The third strategy is one of the governmental commitments to the impoverished Tanzanian people. This included ensuring the enforcement of the law, the accountability of the government for its people and the prioritizing of stability in order to avoid poverty. The IMF reported that Tanzania has become more accountable to its people, less corrupt and has increased citizen participation in governance, thus ensuring an effective political framework.

International Participation in Tanzania’s Poverty Reduction Strategies

The international community was critical to Tanzania’s successful poverty reduction. The United States, Tanzania’s largest source of aid, began giving Tanzania foreign aid in 2006. In that year, the U.S. gave $151.29 million. This number increased every year, with the U.S. giving Tanzania $633.5 million in aid in 2015. This aid has consistently gone towards the very areas in which Tanzania has seen the most improvement: humanitarian aid, governance, education, economic development and health.

While Tanzania still has a long way to go until it completely eliminates poverty, it has made significant progress since the beginning of the millennium. The poverty reduction strategies of Tanzania, including economic growth, investment in individuals and infrastructure and governance development, have been successful to a great extent. International aid has consistently been a contributing factor to Tanzania’s ability to reduce poverty and has successfully targeted the areas in which Tanzania required the most improvement.

–  Denise Sprimont
Photo: Flickr