Ever since the collapse of coffee prices in the 1980s, different organizations have attempted to help the plight of the destitute coffee farmer. Fair trade programs can sometimes be beneficial, but in other cases they are ineffective.
In the Fairtrade Labelling Organizations International (FLO) program, better known simply as fair trade, growers are required to pay certification fees, adhere to certain environmental policies, and pay "fair wages" to their employees in order to be guaranteed the minimum price of $1.40 per pound of non-specialty coffee. If the price of coffee rises above this "price floor," the fair trade price is always increased by at least 20 cents.
This all seems beneficial at first glance but with a closer look, the weaknesses of fair trade are more visible. For example, according to associate professor of economics at San Jose State University, Colleen Haight, records kept by different cooperatives have shown that much of the money raised through the fair trade program is not spent on schools or even put back into farms. Instead, it often goes into facilities for the cooperatives' leaders and to pay for additional office staff.
In addition, fair trade only allows growers who own their own land to participate in the project. However, the poorest among the poor do not own land, so, in essence, this program sometimes ignores those in the most need.
Moyee Coffee has partnered with the blockchain-powered FairChain Foundation in an attempt to create an efficient program to help coffee farmers in the poorest regions lift themselves out of poverty and combat the shortcomings of fair trade programs. The organizations announced on Tuesday that they will use blockchain technology "to directly link Western coffee drinkers with the communities that grow and roast their beans in a potentially disruptive move for the global coffee industry."
The companies will now produce a particular brand of coffee they have named Token. Each bag of Token will come with a cryptocurrency token worth half a euro. According to the announcement, "The company says this is the amount Token is willing to spend on marketing, a fraction of what a typical brand spends, and these euros are spent on the crowd."
It will be up to the consumer to decide where that money will go. Consumers are given the choice of receiving discounted coffee, putting that money back into the brand, or giving it to the actual farmers who grew their coffee. The announcement states:
"Blockchain creates new economic opportunities. Instead of sticking the savings in our pockets, as most brands would, we're giving it to the people that matter most: the farmers and the coffee drinkers. Token empowers people to invest the money blockchain saves them. We have no influence as a brand. We're just a facilitator. How they invest is entirely up to them."
The announcement fails to say exactly what part of the world the beans for Token coffee come from, or even the name of the token being offered, but it did specify that the project will employ a KrypC Technologies platform. KrypC uses Hyperledger, MultiChain, and Ethereum. ETHNews did not receive a response to our requests for comment.
There have been other attempts to use cryptocurrency and blockchain technology for charitable purposes. In February, it was reported that charitable organizations such as UNICEF and The SENS Research Foundation were accepting donations in crypto. Just last week, entertainer Akon announced he had plans to launch AKoin in an effort to help poverty-stricken people in Africa. And the team at Giveth has made progress in its endeavor to bring transparency to charitable donations, winning the SuperDemo Contest at EDCON 2018.