Towards transparent Coffee Supply Chains using Blockchain technology: Feasibility study using cost analysis of smart contracts

Abstract

The risk of misrepresentation and tampering with food and food bourne diseases represent a challenge globally. Moreover, small holder farmers and agriculturalist receive little or no profit due to the lack of transparency and lack of market access in addition to other challenges they face. The case for the coffee market is further linked to the concept of traceability because of the wide genetic varieties of coffee and demand for sustainably sourced, high quality, farm-to-cup traceable and fairly traded coffee. Additionally, millions of farmers in the Global South lack access to insurance and similar financial services because physical assets— including land, previous year sales, and livestock—cannot be used by financiers because of a lack of trust in the market. Innovative solutions, including blockchain technologies, have surfaced as possible ways to insure access to reliable information of coffee supply chains. Blockchains are a type of Distributed Ledgers that enable decentralized storage of information in their use of peer-to-peeer networks. The application of public and private blockchains in supply chain has potential use cases in improving the transparency and trust in the market. However, the cost of applying the technology is a challenge. This paper will study the application of blockchain technology in the coffee market and smallholder farming through the analysis of the cost of running smart contracts. In this paper, I propose the use of an ERC20 based model and show that the cost of running such a smart contract generates the the least amount cost amongst three models that are designed and run on an existing Ethereum Network. The analysis of these smartcontracts will lead to a better understanding of similar adoptions in the coffee supply chains and beyond.