It is estimated that by 2020 the tool will be available for about 20,000 small Honduran producers, who would benefit from loans.
Honduras is one of the 10 countries that more coffee produces globally. Now is the time to open the doors to new technologies. This, to positively transform a sector that has worked in a traditional way and, in some cases, with a lot of effort.
Through a new project, the production and motivation to participate in this sector could increase. Thanks to blockchain technology, Honduras has a system now to integrate the entire coffee industry actors.
This initiative seeks to achieve the traceability of coffee. In this way, the production process will be monitored from the crop until the product is for sale ready for consumption.
Recently, the GrainChain company signed a commercial agreement whose objective is to bring together the different actors of the coffee production chain in that Latin American country.
GrainChain is a platform which creates solutions for the agricultural sector based on blockchain technology. With this new project, it is expected that it can track 2% of the coffee that Honduras exports each year. This represents about seven million bags, according to the CEO of the startup, Luis Macías.
Other Advantages
The Texas-based American startupwill not only focus on monitoring the production and trade of Honduran coffee, but also it will be backed by smart contracts and it will store information about the movements in its blockchain.
Until now, the company has already achieved several agreements with different actors in the coffee supply chain in Honduras.
One of these companies that has joined GrainChain is a mutual fund management establishment. This Honduran company is responsible for facilitating coffee producers access to financing.
The name of that company is Confianza SA-FGR, which last October 6th said it would join the startup, signing an agreement that will allow 20,000 coffee growers to use the blockchain-based tool.
A Platform for Everyone
Francisco Fortín, representative of Confianza SA-FGR, commented that the objective of the project is to create a space for producers, exporters, banks and suppliers for coffee production.
In Honduras, small businesses produce 60% of the coffee in the country, with the support of some 89,000 coffee producers. In addition, coffee is the main export product of that country. It is for this reason that it will be favorable to strengthen the work system.
With smart contracts, GrainChain would help strengthen financing, raising trust between farmers and financial institutions and increasing transparency in the operation.
Until now, a pilot test with almost thousand coffee producers is pending. During that test developers can see how a mobile App would work with a wallet to handle the token of the project, called GrainPay. This token will make it easier for unbanked producers to access financing.
“If a producer wants to buy supplies and he does not have money, he can ask for a loan from a bank. The bank will transfer the money to the supplier and he will send the product to the farm”, Fortín explained.
On the other hand, the producer could monitor through his mobile phone all the stages of the production process, control the information, the inventory, and request financing.
Since the end of 2018, GrainPay functions as a stablecoin anchored to the value of a fiat currency. It is used within the platform for farmers. New technologies, thus, open non-tangible spaces that shorten distance barriers or even lack of budget.
By María Rodríguez
