Blockchain, social compliance and the Moroccan strawberry supply chain

In the spring of 2019, Axfoundation and Axfood in collaboration with Oxfam Novib and SIM wanted to understand the social impact of their buying practices on the frozen strawberry supply chain from Morocco to Sweden. They conducted a field study together and visited Axfood’s Moroccan strawberry suppliers (traders and growers). The purpose of the trip was to provide a deep understanding of the local context in Morocco, but also to assess the suitability (including opportunities and challenges) of implementing a blockchain pilot project focusing on social compliance at the first mile. The focus was to implement remote auditing practices during the harvest season of 2020. SIM is also happy to share ‘not a success story of a blockchain implementation’. Read our lessons learned from our experiences in Morocco on this page.

The challenge

According to Oxfam Novib, Morocco is among the largest exporters of strawberries in the world, and there are ongoing and ever-determined plans towards 2020 of increasing land to use to grow larger quantities of berries. Moreover, we also know that women make up the most of the workforce and that such growth, certainly in the context of the current global economic system, can come at a price for those at the bottom of the supply chain. In other words, the Moroccan strawberry sector is identified as a high-risk supply by Oxfam Novib and prioritized by Axfood in their living wage strategy.

Furthermore, blockchain technology is widely expected to resolve several limitations and to make social compliance more robust. Therefore, this project aimed to test this hypothesis, by evaluating the possibilities to collect and validate social compliance data (including working conditions and wages) directly from strawberry farms in Morocco. To go beyond a once-a-year audit visit, the goal was to investigate the opportunity to collect directly from the farms and verify data points directly through female farm workers and governmental institutions on a more continuous basis.

The solution

Blockchain (at SIM, the SIM Powerchain solution), a technology originally designed for the financial sector and crypto currencies, has emerged a viable traceability solution for real-time supply chain monitoring. There is no sustainability without transparency and knowing where products come from and under which conditions they have been created. Distributed ledger technology enables increased transparency through traceability on batch level for all supply chain partners. Moreover, blockchain provides a new sort of distributed database that democratizes the sharing of data. Once information is registered on the blockchain (provenance, working conditions, food safety and quality indicators and so on) all actors in the supply chain own the same copy of a database with all transactions visible. The information can never be altered again. The simplicity of blockchain is essential for transparent and shared supply chain information, an asset traditionally guarded by separate actors and commonly abused or corrupted. The project partners wanted to evaluate whether blockchain can help reduce the burden of yearly social compliance audits on farms and limit the influence of intermediaries while collecting information on wages and working conditions on a continuous basis from farmers and workers.

The challenge

According to Oxfam Novib, Morocco is among the largest exporters of strawberries in the world, and there are ongoing and ever-determined plans towards 2020 of increasing land to use to grow larger quantities of berries. Moreover, we also know that women make up the most of the workforce and that such growth, certainly in the context of the current global economic system, can come at a price for those at the bottom of the supply chain. In other words, the Moroccan strawberry sector is identified as a high-risk supply by Oxfam Novib and prioritized by Axfood in their living wage strategy.

Furthermore, blockchain technology is widely expected to resolve several limitations and to make social compliance more robust. Therefore, this project aimed to test this hypothesis, by evaluating the possibilities to collect and validate social compliance data (including working conditions and wages) directly from strawberry farms in Morocco. To go beyond a once-a-year audit visit, the goal was to investigate the opportunity to collect directly from the farms and verify data points directly through female farm workers and governmental institutions on a more continuous basis.

The solution

Blockchain (at SIM, the SIM Powerchain solution), a technology originally designed for the financial sector and crypto currencies, has emerged a viable traceability solution for real-time supply chain monitoring. There is no sustainability without transparency and knowing where products come from and under which conditions they have been created. Distributed ledger technology enables increased transparency through traceability on batch level for all supply chain partners. Moreover, blockchain provides a new sort of distributed database that democratizes the sharing of data. Once information is registered on the blockchain (provenance, working conditions, food safety and quality indicators and so on) all actors in the supply chain own the same copy of a database with all transactions visible. The information can never be altered again. The simplicity of blockchain is essential for transparent and shared supply chain information, an asset traditionally guarded by separate actors and commonly abused or corrupted. The project partners wanted to evaluate whether blockchain can help reduce the burden of yearly social compliance audits on farms and limit the influence of intermediaries while collecting information on wages and working conditions on a continuous basis from farmers and workers.

Lessons learned: blockchain beyond the hype

In order to create supply chain transparency and product traceability using blockchain technology, strong partnership and trust between all supply chain actors need to be present and there needs to be clear incentives for all the actors to share data. A technology like blockchain can only succeed when the players and the playing field is known, and trust is established.

1. First and foremost, blockchain is just another system that relies on data input from people in the chain, hence the human factor has a great impact.

2. Trust is needed to already be in place for a successful implementation of a block-chain solution. As a result of the mistrust from farmers, we did not have the opportunity to meet with the workers and get their perspective. These were factors making it hard to proceed in the dialogue with farmers and create a trusted environment to share data.

3. To successfully run a blockchain project the added value for each party in the chain must be clear. For the farmers in Morocco, the “what’s in it for me” was one thing only: will I receive a better price for my strawberries if I participate?

4. Visibility of the supply chain is needed. We often say blockchain is a tool that helps creating transparency. However, blockchain benefits from established transparency, product traceability and sound relations in the supply chain. In other words, these circumstances need to be established first.

5. In this case, the volume of frozen strawberries that Axfood yearly buys from its supplier is relatively low which weakens the business case for the Moroccan strawberry farmers to invest in collaboration and the required technology. In addition, Axfood’s supplier is just one of the five or six big buyers for the strawberry farms that were supposed to be involved in the project. In general, the largest successful implementation of traceability project is characterized by a vertically integrated supply chain where actors are the main business partners to each other.

In order to have correct data travel with the product to the retailer or a step further to the consumer, full segregated traceability must be established. This often comes at a high price and significant changes to the existing traceability system need to be made.

Download the Blockchain in Morocco lessons learned report

“Axfoundation aims to innovate and accelerate future solutions to today’s sustainability challenges. Often this means exploring unknown paths and taking risks. Our blockchain initiative in Morocco turned out to be an unexpected learning journey, resulting in a lot of valuable insights and new knowledge to be charged among companies in the food sector”.

– Hanna Skoog, Program Director Circular Economy at Axfoundation –

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