Due to the infamous plummeting of coffee prices in the 80s’, a substantial amount of resources and efforts have been directed to restore the value to its rightful place. Nonetheless, these efforts have not been entirely valid, as the prices are still dismal.
The Fair Trade Model
Among the methods employed to reinstate the value of coffee is fair trade, which is run by the Fairtrade Labelling Organizations International. The fair trade program requires member farmers to pay certification charges, follow specific environmental regulations, and pay equitable stipends to the workers.
After complying with these needs, the farmers are assured of selling their merchandise for at least $1.40 for every pound of coffee. Additionally, if the situational value of coffee exceeds the set lower limit, the farmers are paid at least an extra $0.20 for every pound.
The Limitations Of Fair Trade
Presumably, the fair trade program looks to be advantageous to the coffee farmer. However, after a thorough analysis, its shortcomings become conspicuous. For instance, Colleen Haight, an associate economics professor at the San Jose State University, most of the money collected from fair trade members are not reinvested into farms or learning institutions.
Instead, a sizable portion is used in the employment of extra staff and expansion on existing infrastructure. Furthermore, the program requires its members to be the legal owners of the land they wish to grow the coffee. As a result, many underprivileged farmers are automatically barred from enrolling with the initiative.
As a remedy to the inadequacies of the fair trade programs, Moyee Coffee collaborated with Fairchain Foundation, a blockchain-based firm. These two will leverage blockchain technology to create a solution that establishes direct links between the coffee consumers and the growers. Therefore, it will accommodate all farmers, regardless of their social status.
The new platform will produce a distinctive brand of coffee known as Token. Moreover, each bag of Token will represent a single unit of a corresponding digital currency, with a value of €0.5. This is the amount to be allocated towards the advertisement of this project. In comparison with the marketing methods used by other existing brands, the Token coffee spends a significantly smaller amount of money.
Under the new system, consumers will have full control over the usage of the funds the users will be expected to choose from reinvesting into the company, reimbursing the coffee farmers or getting coffee at discounted prices. According to the announcement, the platform’s mission is to facilitate the connection between consumers and farmers without influencing the way they spend their earnings.
Surprisingly, the documentation mentioned above does not specify the source of the coffee to be sold as Token. Also, it fails to disclose the name of the corresponding token. However, it states that the platform will operate on the KrypC Technologies framework. Typically, the KrypC systems are based on Hyperledger, MultiChain and Ethereum blockchains.
The Disruptive Nature Of Blockchain Technology
The Token coffee project is one of the several blockchain-driven projects that seek to transform philanthropic organizations. Other notable incidences that are similar include the acceptance of digital currency payments by leading organizations such as the SENS Research Foundation and UNICEF.
Recently, Akon, a famous American singer, announced that he is working on the creation of AKoin, a virtual coin that aims to feed the destitute living in Africa. Lastly, the Giveth group also won an award at the 2018 edition of EDCON for their remarkable efforts in promoting transparency in humanitarian projects.