An Oxfam pilot project using blockchain technology to enable poor rice farming communities in Cambodia to sell their produce in Holland is at last underway with a first shipment now en route to Europe.
As part of the pilot, Cambodian exporter AMRU Rice linked with Dutch company Sano Rice last year in an attempt to alleviate poverty amongst the Southeast Asian country’s rice farming sector; forming a cooperative of 50 rice farmers.
Rice farming in Cambodia is a tenuous business with no predictability of sales and low profitability. As well as farmers having to contend with extreme weather affecting and occasionally destroying annual crops, they rarely have guaranteed buyers in place. Rice accounts for 25 percent of the economy yet the average monthly income for rice farmers is only about USD 108.
The fragility of the supply chain leaves many farmers living on the breadline, not helped by fluctuating global rice prices and the cost of materials and seed. Small scale farmers in Cambodia are struggling, suggests Lim Solinn, Oxfam’s Country Director in Cambodia. “If farmers grow a surplus, it drives down the price and the farmers can’t make a profit.”Enter Oxfam’s BlocRice pilot project, started last year which is putting contracts on the blockchain, enabling guaranteed sales for the new cooperative allowing the farmers involved to sell their rice to the European rice cake market.
The new blockchain digital agreement is based on a contract whereby the farmers on the project agree to provide 100 metric tons of rice, with the exporter guaranteeing a market price plus premium. The contract is placed on a digital smart contract visible to all parties to ease future price negotiation. “It’s a three-way digital agreement between organic farmers and rice exporters in Cambodia and buyers in the Netherlands,” maintains Solinn.
The first shipment of 92.5 tons of rice in two containers was shipped to Holland in March, just short of the target of 100 tons. Phay Cheth, Oxfam’s BlocRice Project Manager explained that this was because a late-season drought had slightly reduced production. Cheth added that so far the project had really good potential to ease the lives of Cambodian rice farmers:
“It’s an ambitious idea, but if we can monitor the market from the small-scale farmer to the end consumer, the consumer can see that their purchase helps small growers and they can feel good that their purchase contributes to fighting poverty.”
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