How blockchain grows cashews 🌰
Updated: Jan 17, 2022
Rural Mozambique seems like an unlikely place for a blockchain revolution. It’s not exactly Silicon Valley. There’s no lanky, t-shirted men floating around on Teslas and hoverboards. Nobody droning on about space ships and crypto assets in coffee shops. Instead, you’ve got independent farms dotted around dusty landscapes, wibbling in the heat and stretching out as far as the eye can see. Villages so remote they make my arse-numbingly quiet market town of Carmarthen look like Times Square... It's the last place on earth you'd expect to find a blockchain explosion.
Yet, it’s precisely this remote and local approach to farming which makes Mozambique so ripe for disruption. This is the surreal story of how blockchain came to produce cashews. 👇 👇
The old system was nuts … And not in a good way. 😒
Mozambique farmers have been pooling their produce together into big batches for some time now. It makes the quantities larger and therefore much easier to export. Makes sense. All well and good.
But where the system cracked, according to founder of Hiveonline and all-round legend, Sofie Blakstad, was when the middlemen got involved. Because somehow, between harvesting the crop and selling it to exporters, hundreds of extra fingers were getting stuck in and pinching bits of profit. Fu**king middlemen, right? There seemed to be more hands picking money than nuts!
A big part of the problem was that the pooling system was super opaque. Leaving lots of dark corners for pocketing cash along the way. Instead of maintaining an online database or even … dare I say it… an excel spreadsheet (seriously, aside from Quants and Compliance, does anyone even use them anymore?), takings were recorded on scraps of paper. Eech.
“From a farmer's perspective”, Blakstad explains, “many of them don't trust the cooperatives because there's a lot of corruption and no transparency with everything being written on paper”.
The system was completely defuncted. Absolutely off its trolley. Even for well-meaning co-operative programmes, the sloppy paper trail was an admin headache! “From the coop manager's perspective managing records is a nightmare”, Blakstad reveals. “Because they have to do calculations manually, they're working with lots of different record sets, and people's names are spelt differently in different systems so they don't even know how many people they have”.
Bits of paper regularly go missing. According to Blakstad, “The pig ate my crop forecasts” excuse is well-known.
And if it wasn’t the admin, it was the environment 🤯
As well as being quite a baffling and ugly plant, poor cashew trees are also “ a bugger to grow”, according to Blakstad. “They need special grafting, so you can't just plant a seed and hope for the best. And because of that most of the farmers haven't been planting trees because they can't afford the investment in something that won't generate income for another 10 years”.
Then there’s the weather, especially when it comes to climate change. And the degrading soil from years of pesticides. And probably a whole bunch of other stuff which makes growing cashews a royal pain in the arse for farmers in Mozambique.
Time for some blockchain badassery* 😎
Most people – including me – would have looked at this nutty situation and been like, “ok that sucks, bye”. But not Blakstad and the team at hiveonline… Who are honestly the most incredible people. I’ve written about Sofie being a legend before, but this story just takes the biscuit to a whole new level**.
So, what do Team Blakstad & Co. do…? Uhhhh…. They only bosh in and solve the situation with some epic blockchain skills. Here’s what happened next.
Working alongside the Association of Modern Cooperatives, the Nut Board IAM and Technoserve, Hiveonline set about building a system where farmers and co-operatives could record their produce. Just getting started was a massive admin pain. “The data quality was terrible!”, Blakstad recalls. “For example, 500 farmers were registered with the same phone number.”
With some funding secured (thanks to the brilliant Norwegian NGO, Norges Vel) the blockchain humanitarians got to work. And they didn’t just go the extra mile. They went to town. “We built some additional functionality relevant to cooperatives and the agricultural ecosystem”, Blakstad reveals. This includes some massively useful data analysis and insights, including crop forecasting and quality measures. “We were also able to significantly enhance identity because most of the farmers have some sort of government ID and were registered on an agricultural database following the first data gathering exercise”. Nice!
Getting paid fairly AND transparently
Using the epic power of blockchain – and also their massive brains – Blakstad and the team created a voucher system like it was a piece of cake. They used their tech to facilitate safer and fairer payments for the farmers. Lush. Lush. Lush.
Of course it’s not all perfect. Especially for the farmers. “They have to walk for hours to get water and there is no phone coverage”, Blakstad explains. “But they can record all their info and it gets uploaded when they go to market at the weekend. Transactions are transparent and most importantly, the crop forecasts can be seen by buyers without having to visit them”.
Like all the best inventions, the farmers carry on as usual for the most part… With one major difference, less third-party pockets are getting lined along the way. “From a farmer's perspective, they don't really do things that differently, but it prevents them from selling to middle men at the farm gate, so they get more for their crops”, Blakstad explains. “It also means that when something goes wrong in the value chain, there are more options”.
As a cheeky bonus, the transparency and ease of use means that the quality of cashews is increasing little by little each year too! And the forecasting tools means that we’re getting more too. “The forecasts and the access to finance help the coops manage cashflow, to provide farming inputs like fertilizer and seeds, so they can grow more”, Blakstad elaborates. And THAT my friends is how blockchain produces cashews. KaPOW 💥.
Women with nuts 🥜
One of the major unintended benefits of the new voucher system is that more women have started to grow and sell nuts too. “They're still mostly men in cashew”, explains Blakstad. “But the women have increased from 32% to 36% this year and we're establishing more women only coops. We're currently working on a proposal with WFP to work with 200,000 farmers who are 50% women”.
Maybe it’s because women feel safer with blockchain, rather than carrying cash on their person. Or perhaps they feel less ripped-off with the transparency of the system. Either way, female cashew farmers are on the increase in Mozambique following the launch of the blockchain system. “Using blockchain, our vouchers know where they are at any given time, can't be transacted by the wrong parties, and can be redeemed or reimbursed automatically - gets rid of the problem of merchants who don't accept vouchers because they don't trust the reimbursement”, Blakstad explains. Absolute ledge.
You’ll never see a cashew the same way again! 🕺
So far, Hiveonline and friends have managed to onboard a whopping 3,000 farmers onto the system. Or in cashew terms that’s an knuckle-crunching 800 tonnes!! And they have BIG ambitions to onboard the remaining 195,000 farmers in the region soon. Go on guys!
So, next time you dip your hand into an M&S barrel of roasted nuts, think of all the middle-men NOT dipping into the profits of farmers. Next time you smell that kind of intensely sweet honey burn smell from cashew street vendors (is that only in West Wales?) think of all the farmers NOT getting burned by rubbish paper trails. And next time some lame uncle (which could be you…no offense, we’re all getting older) makes that joke, “what does a nut say when it sneezes? Cashew!” You can look at them bleakly and question why you still bother with them. Because, honestly that joke is shocking.
For me, next time I see a little cashew nut, I’m going to think of the power of blockchain and the amazing tech humanitarians who make this world a better place. Here's to Sofie Blakstad and hiveonline ... The nutty professors of fintech!! 🥂
*Badassery not a word? Pah. It should be.
** Not a phrase? Honestly guys, I don’t know what my waitress put in my tea but I’m loving it.