Cambodian rice farmers haven’t had it easy. Growing costs and stagnant markets are major challenges that continue to plague Cambodia’s agricultural sector. Despite the availability of agricultural loans, many farmers have been unable to pay loans back due to unstable and unfair pricing. Additionally, local rice farmers usually lack proper documentation or formal contracts with their buyers. This lack of appropriate price information exposes them to exploitation risks by traders who overcharge interest rates on loans.
Thankfully, a potential solution has arrived in the form of an Oxfam blockchain pilot which seeks to leverage blockchain technology to help rice farmers get better bargains for their farm produce. Founded in 1942, Oxfam is an international coalition consisting of 20 independent nonprofit organizations whose aim is to contribute to the eradication of global poverty and famine.
Oxfam’s project has been dubbed the Blockchain for Livelihoods from Organic Cambodian Rice otherwise known as Blocrice and will be involved in tracking rice prices across the board while enabling vulnerable rice farmers to make more profit by selling their goods at fair prices. Initially, the project kicked off with 50 organic rice farmers, but according to a Nikkei Asian Review, Oxfam has stated that they plan to roll out an expanded version of the program that will cover farmers all over the country.
According to Kann Kunthy, managing director of AmruRice (a Phnom Penh-based rice exporter that was part of the project’s pilot):
“We expect to bring traceability, transparency, financial literacy and best practices [to]contract farming in Cambodia.”
Basically, Blocrice’s goal is to promote contract farming between industry stakeholders including farmers, exporters, rice cracker manufacturers, buyers and farmers’ cooperatives.
How does Blocrice work?
Blocrice contracts will help predefine the basic purchase price, transportation/delivery methods, trade volume, and other conditions. Data that fall under these categories will be collected and stored on a blockchain platform. Blocrice will not only digitize agriculture data, but will also help facilitate the processing of cashless payments to farmers via banks. Specific protocols have been put in place to ensure that the data stored on the Blocrice blockchain (including payments to farmers) are continuously updated.
What Blocrice means for Cambodia’s economy
Cambodia’s economy isn’t truly diversified; the country is still heavily dependent on agriculture and statistics show that Cambodia’s total workforce comprises of 60% farmers. The bulk of these farmers are low-income laborers saddled with the responsibility of paying high-interest loans. Blocrice will give farmers collective bargaining power, allowing them to broker better deals with middlemen, traders, and companies, which will help boost their productivity and empower them to pay off their debt.
Oxfam’s director in Cambodia, Solinn Lim, has said that Blocrice pilot will improve the collective bargaining power of 50 rice farmers and will help reduce additional transportation costs by shifting it to the buyers.
According to her:
“The sheer fact of being registered as an actor on the blockchain platform implies that people matter. Blocrice will give them a platform to empower themselves.”
It is also worth noting that almost half of all Cambodia’s rice export ends up in the European market. However, the relationship between these trade partners has become strained due to Cambodia’s human right violation concerns and suspicion of election fraud. It is widely believed that the introduction and implementation of transparent blockchain protocols (like Blocrice) in supply chain management and the electoral process could help alleviate the tension between the two trade parties.
Blocrice future projections?
Blocrice is slated to bring great benefits like transparency, traceability and advanced farming practices to Cambodia’s agricultural sector. Seeing that the majority of Cambodia’s population is involved in farming, Oxfam has stated that its project will expand beyond rice and venture into other products like pepper, cashew nuts, cassava, and maize. Aside from empowering rice farmers, many experts also believe that Blocrice could serve as a platform that will help Cambodia conduct credible elections in the near future.