JICA uses blockchain transparency to combat child labor

Few foods have the universal appeal of chocolate. The global market for the cocoa-based sweet is over US$1 trillion in 2022.¹ Yet, the harsh realities behind the sweet’s production are far less appealing. For instance, in Côte d'Ivoire, which produces 43% of the world’s cocoa, nearly 38% of cocoa-producing households employ child labor.² To address this issue, the Japan International Cooperation Agency (JICA), a government agency that promotes economic and social growth in developing countries, turned to blockchain technology. “By utilizing blockchain, we could make the entire supply chain transparent,” says Yushi Nagano, a senior digital officer at JICA.³

The government of Côte d'Ivoire was acutely aware of the child labor problem and welcomed JICA’s initiative for a pilot program. According to Nagano, when the children of cocoa producers work on farms, they are unable to attend school, which creates a vicious cycle of those children ending up in the same trade. JICA decided to focus on educational opportunities by tracking school attendance as a form of positive proof that children are not engaged in labor. “We also met with village chiefs to understand the local situation and ensure we could provide the right incentives within our system,” says Nagano.

Drawing on blockchain’s properties of immutability and transparency, JICA worked with a leading agro-conglomerate in Sub-Saharan Africa in two villages to create a data management system that involved teachers, farmers, and local cocoa traders. First, using a public blockchain database, teachers recorded daily attendance for the children of cocoa farmers, which was verified against farmers’ inputs of whether child labor was used. Local traders then paid premium prices for the cocoa beans produced by farms with high rates of school attendance, while JICA provided grants to the schools for accurate inputs. The project was a huge success, with nearly 100% participation from schools and farmers in the initial pilot.⁴ As they expand this pilot, JICA will involve confectionary retailers and consumers by opening up access to the database. Says Nagano, “We will assess whether consumers are willing to pay more for sustainable chocolate and pass along those incentives to the farmers.”

Next-gen technology is often used to improve economies that are already advanced, but JICA believes it can be used to look out for the most vulnerable. “We all live in the digital age,” Nagano says, “so utilizing emerging technology is a must in JICA’s development activities, to bring about well-being for as many people as possible”. In the near future, JICA is willing to scale its blockchain technology to improve supply chain transparency in other chocolate-producing countries such as Ghana, and then expand to the coffee and organic cotton industries. It also aims to increase efficiency and decrease corruption in international trade, with a pilot underway to streamline cross-border movements in the Mekong Region of Southeast Asia.

JICA looks forward to a world where the benefits of the digital age are evenly distributed among developing and developed countries. Says Nagano, “The beauty of utilizing blockchain is in making an emotional connection from farmers in Côte d’Ivoire to consumers in Japan—smile to smile across both ends. Digital technology is not cold; it can be warm and emotional, too.”