With the right data, can cocoa farmers in Colombia access international markets and pioneer a new way to protect the country’s forests?
This post captures learning from the first Sprint of our pilot — ‘Integrating satellite and ground data to generate transparency in the cocoa value chain’.
Snapshot of the pilot
Cocoa is considered a ‘nature-positive’ and peace building crop. It has been used in Colombian government strategies to substitute coca crops and give communities a chance to move away from conflict and the influence of drug-dealers. In addition, cocoa grows best when planted with different trees, such as fruits and nuts, which give special flavors to its beans and make it a great alternative for restoring deforested areas.
Our pilot aims to connect international buyers and smallholder cacao farmers in Colombia through a data-rich platform that demonstrates quality, ethical practices, and traceability of the cacao.
Buyers will be able to identify high-quality, sustainably produced cocoa and make data-driven decisions that comply with due diligence requirements, whilst smallholder producers will benefit from access to wider international markets.
This work is being delivered in partnership with Earth Big Data. The pilot is supported by the Frontier Tech Hub, an initiative funded by UK aid from the Foreign, Commonwealth and Development Office (FCDO).
The importance of technology and traceability in the cacao value chain
Countries, industries, entrepreneurs, and consumers are changing the way we do business, and how we take decisions about what we consume. In the context of Colombia’s cacao value chain, the importance of technology and traceability becomes even more significant. The adoption of advanced technology solutions and traceability systems is crucial for several reasons.
Firstly, Colombia is renowned for its high-quality cacao production. Ensuring traceability throughout the value chain is vital for maintaining and enhancing the reputation of Colombian cacao in the global market. Technology allows cacao beans to be tracked from their origin so that buyers and consumers have confidence in the authenticity, quality, and sustainability of the product. They can be sure it’s ethically-sourced and does not contribute to deforestation or human rights abuses. For example, it’s possible to monitor forested areas around cacao farms and detect deforestation events by leveraging earth observation algorithms and the latest sensors on satellites which operate 24 hours-a-day through any atmospheric conditions.
Secondly, technology can help organizations in the cacao value chain to comply with due diligence requirements by providing them with the necessary data and analytics to make informed decisions about their operations. By tracking supply chain operations, technology can help these organizations to identify and mitigate potential social and environmental risks, such as unauthorized or unethical handling, labour violations, unsafe working conditions, and carbon emissions.
Overall, the use of technology in traceability and due diligence can help organizations not only meet their legal and ethical obligations but also gain a competitive advantage by demonstrating their commitment to sustainability and social responsibility. By adopting the right technology and implementing best practices for social and environmental due diligence, organizations can reduce their risk exposure, enhance their reputation, and contribute to a more sustainable future. For businesses this translates into profit and sales whilst for the local communities it improves living conditions.
What we set out to learn in the first sprint
Our first 8-week sprint began in March 2023. Our team conducted key discovery activities, including field visits and meetings with key actors in the cocoa value chain. We wanted to develop a better understanding of the problem and opportunities for our pilot. Our key areas of focus were:
1. Understanding existing value chain models for cocoa in Colombia. We wanted to identify key actors and stakeholders in the cocoa value chain and understand the relationships and interactions that inform their data and due diligence needs. We also sought a better understanding of the challenges associated with existing systems for tracking cocoa production and distribution, so that we could spot gaps and opportunities for our pilot technology to have the greatest impact.
2. Understanding the needs and perspectives of smallholder farmers and cooperatives. We planned a field visit to the Meta department, where we talked with three smallholder farmers, rural development experts, and a cooperative. We wanted to gain insights about cocoa production and distribution, learn their processes, and hear their stories. We also sought their perspectives on the potential benefits and challenges of a traceability platform, and their willingness and capability to participate in our pilot. This will guide our thinking and ensure we align our pilot to their needs and priorities.
3. Identifying potential collaborators who could help us achieve our objectives. We wanted to speak with a wide range of additional stakeholders in the cocoa value chain, including international government agencies, NGOs, and international buyers. The international cooperation ecosystem in Colombia is very diverse and every day cocoa is receiving more attention and funds. It is important we establish these relationships and build a strong network of supporters and advisors to ensure the long-term sustainability and impact of our pilot. We also seek to avoid duplicated effort and confusion for the cocoa producers.
4. Understanding EU due diligence and export requirements. We investigated the processes, attributes, and evidence requirements associated with EU due diligence law. This will help us to design and implement a solution that provides evidence-based risk assessment and compliance for cocoa products that will be introduced into the EU market through our platform.
What we’ve learnt?
Our first sprint yielded important insights into how traceability can be used to drive positive change in the cocoa value chain. Our first lesson was not about the use of technology or traceability, it was about the drive, passion and motivation of the local cocoa producing communities and their desire to produce the best quality cocoa beans possible.
Our second lesson is a much better understanding of different cacao value chains and the challenges associated with creating traceability. For example, it’s important that we provide detailed information about the cocoa production processes, rather than simply focusing on environmental and social traceability. Factors, such as the conditions under which cocoa is grown and harvested, enable buyers to make more informed decisions about the quality and sustainability of the cocoa they are purchasing. This is very important for our targeted international buyers who are fine small chocolate makers that are looking for quality over quantity, and able to pay more than normal market prices per kilogram (GBP 2 vs GBP 6–8).
Our third lesson relates to challenges other projects had encountered associated with regions where smallholder farmers may lack access to the latest technologies. However, when we visited cacao farms in the Guamal, Meta, we found strong 4G signal and one farmer showed us a comprehensive set of data attributes he captures on his smartphone. As a result, we believe our focus must be on co-designing our pilot platform with participation and validation from farmers and other end users. We’ll work closely with users to configure a tailor-made solution that addresses their specific needs, seeks to open future commercial opportunities, and contributes to their ambitions as entrepreneurs. This may also require targeted support and training to help farmers adopt our platform, as well as ensuring that they have access to the necessary resources and enabling infrastructure.
Passion was a common denominator in the cocoa producer associations we visited and whilst they are interested in technology, the challenge resides in being able to prove that the effort translates in better prices and income.
Finally, we learnt that traceability can be a powerful tool for promoting ethical practices in the cocoa value chain. By enabling buyers to trace the origin of their cocoa and verify that it has been produced in an ethical and sustainable manner, there is the potential to incentivize farmers to adopt more sustainable practices and help to reduce the environmental impact of cocoa production.
How this informs our next sprint and what we want to learn next?
Based on a clear understanding of due diligence requirements and how each actor from the cocoa value chain will provide information, our next step is to design a digital database structure that will connect satellites, humans, and applications through blockchain technology. By doing this we will start answering the following question: can due diligence procedures and cocoa value chain decision making be efficiently and transparently supported by technology?
Simultaneously, we’ll begin developing a deforestation monitoring module. This module will employ the power of three satellite missions, with four satellites in orbit, combined with cloud computing and expert analysis. Its purpose will be to promptly report any deforestation alerts occurring within cocoa farming estates. By leveraging satellite data and expert insights, we aim to efficiently detect and respond to deforestation threats, enabling timely intervention and prevention. Our challenge by developing this new deforestation module is related to automating remote sensing pre-processing and analysis and maintaining a high accuracy in deforestation detection. This will be the first step in learning how to develop a solution that balances reduced uncertainties and optimized resources, with delivering a reliable, robust, and cost-effective deforestation monitoring service.
Finally, we’re committed to designing the initial version of a mobile app that empowers cocoa producers and technical assistants from Fedecacao and CataExport to validate any deforestation alerts. In practice, they will be able to contribute to the preservation of forests by reporting any instances of deforestation they find whilst also validating events reported by satellite data. By facilitating real-time reporting and validation, we aim to foster a collaborative approach where satellites, farmers, and technical assistance on the ground will generate reliable information to estimate deforestation risks to be reported as part of due diligence requirements.
