Koa, a Ghanaian-Swiss startup, says it has achieved a breakthrough payment transparency system using blockchain technology that proves payments and higher income for cocoa farmers.
The transparency system, which is a product of international collaboration with Germany-based seedtrace and MTN Ghana, is said to be tamper-proof and scalable.
It records Mobile money payments made to cocoa smallholders and offers real-time transaction verification and are irreversibly stored on a blockchain.
A press release copied to Cocoa Post explained that the “transactions are made publicly available, differentiating themselves from existing certification labels, providing consumers with direct proof that farmers receive the full payment.”
Over the last decades, supply chain scandals and cocoa farmer poverty have continued to rock the cocoa industry, leading to increased consumer demand and political efforts to improve the transparency and accountability within the cocoa industry.
Yet, consumers struggle to put their trust in brands and their initiatives. While products carry certification labels, the inevitable question remains: How can I be sure that farmers receive the money that they’re entitled to?
Koa, the Ghanaian-Swiss start-up making use of cocoa food waste, has set sail to disrupt transparency standards and to enable consumers to obtain assurance.
Getting Rid of Non-transparent Supply chains
“We want to get rid of long, non-transparent supply chains,” emphasises Anian Schreiber, Managing Director and Co-Founder at Koa.
“Instead of claiming good practices, we put our cards on the table to let the consumers witness each transaction to farmers.”
The start-up is known for upcycling the white pulp that surrounds the cocoa beans, thereby significantly increasing the income of Ghanaian smallholders, while offering a solution to reduce farmer poverty.
Koa is working with over 2,200 cocoa farmers and targets to add an additional 10,000 farmers to its value chain in the next two years.
Removing the room for errors and opaque marketing messages to develop the pioneering transparency system, Koa collaborated with Berlin-based seedtrace, a SaaS start-up on a mission to make supply chain transparency the norm.
According to Koa, existing certification labels often validate transactions through non-transparent, error-prone control procedures, with farmers regularly only receiving a portion of the funds claimed to be earmarked for them.
To combat this, seedtrace created a system that removes the room for error and enables customers to monitor the extra income paid to farmers.
Blockchain-enabled Transparent payments
“We verify each transaction and store it on an open, low-emission blockchain. Together with Koa, we thereby set new standards assuring that the information is verified, cannot be manipulated and is accessible in real-time for all stakeholders,” explains Ana Selina Haberbosch, CEO at seedtrace.
Blockchain enables full transparency The new system is unique as it connects blockchain with mobile money transactions.
“Instead of having a person enter information on the blockchain, it links the data from mobile money transactions. This combination allows us to verify additional farmer income, deliver full proof and increase trust among stakeholders,” says Francis Appiagyei-Poku, Finance and Administration Director at Koa.
With this technology Koa and its partners hope to ensure 360-degree transparency is achieved by implementing clear, transparent, and compliant data management processes that protect individual data and keep farmers informed of data use.
To bring the system to life, Koa and seedtrace have partnered with MobileMoney Limited, a subsidiary of MTN Ghana, as well as MTN Group, Africa’s largest telecommunications operator, whose mobile money transaction data serves as secure inputs for the blockchain.
Eli Hini, CEO of MobileMoney Limited, commended Koa for adopting mobile money to ensure transparency and accountability.
“With mobile money, the cocoa farmers become more economically empowered and strategically placed to undertake digital transactions wherever they are,” he emphasises.
Oberweis first to integrate the system
Leading the way towards full transparency is Jeff Oberweis, the renowned pastry chef from Luxembourg, who sends consumers on a journey from cocoa farmers to the final product.
A QR code on the packaging of the product containing Koa ingredients leads consumers to the seedtrace platform where they can see the additional farmer income.
“In 2022, we want to have proof that people are paid fairly and that we work on an equal footing throughout the value chain. Koa’s integration of the blockchain guarantees total transparency and allows us to set an example to the industry,” emphasises Jeff Oberweis.
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