From compliance to value: How traceability can finance smallholders

Traceability in agrifood has moved from a peripheral consideration to an operational necessity. Three forces are converging: regulatory pressure, climate risk, and rising consumer expectations. But technology on its own does not create trust. I have discussed it with Alessandro Chelli, co-founder and CEO of Trusty. He argues that what matters is data that different actors can actually share and verify: “Traceability is moving … to a must-have regulatory pressure, climate risk, [and] customer expectations.” 

His broader point is not brand specific: without common standards and user-centred tools, supply chains will keep struggling to prove origin, legality, and sustainability in ways that authorities and customers can trust.

Design the first mile first

The hardest part of traceability is not at the factory gate, but it is at farm level, where records are on paper, connectivity is often unreliable, and procedures vary widely between cooperatives. This is where accuracy, inclusion, and cost really bite. In my own work with coffee cooperatives, I have seen how easily data fragments, from scattered papers or WhatsApp messages. Stitching these together at audit time is slow, error-prone, and expensive. A system must therefore be simple enough for field agents, offline capable, and designed to capture a minimum viable dataset without asking the farmer to become a data collection expert. 

Trusty’s case illustrates the approach. The team built a mobile-first tool that works without signal and is anchored to GS1 standards so upstream data can be shared downstream in a common language. As Alessandro puts it: “We saw a lot of problems on the first mile… data are paper-noted… so we created a simple mobile application to collect data easily for farmers [and] cooperatives.” 

EUDR as catalyst 

The EU Deforestation Regulation (EUDR) raises the bar for operators placing commodities on the European market. Cocoa, coffee, and other covered products must be traceable back to the plot where they were produced, and operators must run due diligence for deforestation risk and legality, and keep auditable records through the chain. In principle, this is good news for responsible producers, but in practice, it will only work if first-mile systems are strong enough not to exclude them. Alessandro’s explained to me: “To import a product in Europe … you need the whole traceability and the list of plots where the products come from … plus a due diligence process.” Inclusion is not optional: “If a smallholder farmer cannot provide data, the whole chain fails because the European operator cannot import from that origin.”

What follows, then, is practical design. Import documentation must be joined to verified farm-level geodata; risk screens must be documented and repeatable; and the administrative load should not fall solely on those least able to absorb it. If compliance becomes an unpriced burden at the first mile, we will entrench exactly the inequalities the regulation seeks to address.

Blockchain is a consequence, not the starting point

A recurring trap in digital traceability is to lead with technology rather than evidence. The role for blockchain is to create an immutable log of who did what, when, across disparate systems. That comes after processes are digitised and data are structured. Alessandro’s line struck me because it reverses the hype cycle: “I always say blockchain is a consequence of digitalisation … it gives an immutable log of who did what and when.” The warning is just as important: “In blockchain it is real that ‘garbage in, garbage out’. If you put false information, you have timestamped false information.”

This is why the assurance layer matters. In the case discussed, claims are audited by an independent certification body before they are written to the ledger: “RINA validates the claims … information in blockchain is inserted only when validated by the certification authority.” For consumers, QR codes can help to present a story with verifiable data. 

Inclusion by design: cost sharing and capability building

Compliance must not push costs and complexity onto those least able to absorb them. It cannot become another “green premium” that farmers subsidise. A practical compromise is cost sharing between buyers and producers, plus a pricing model that reflects scale. Alessandro explains: “If the buyer adopts Trusty, the application is free for all the supply chain … [if] the producer adopts … to serve multiple buyers, they can pay a little price.” The goal is not to make software free forever, but to stop the proliferation of one off tools that force co-operatives to relearn the same tasks for every buyer.

Capability also needs attention. Short training helps field teams record the right evidence the first time, and an AI-enabled “academy” can reduce the need for repeated workshops by putting micro-lessons inside the tools people already use. As Alessandro puts it: “We’re starting to use AI mainly for training … an academy on EUDR compliance and due diligence, to onboard co-operatives directly.” None of this is a substitute for extension services or decent connectivity, but it lowers the threshold for participation and reduces wasted effort. It is particularly important for any solution to avoid being a burden, especially for farmers. 

Partnerships that deliver before scale for its own sake

Many traceability projects stall because they try to scale before they have earned trust. A more robust path is to build a coalition of complementary partners. The case of Trusty discussed shows two useful archetypes. First, a certification partner that validates selected claims before they enter the record and second, a logistics partner that can shoulder parts of the due diligence workflow for roasters, reducing manual data entry and smoothing import compliance. It is a solution to reduce costs and create alliances in the value chain. 

Evidence from pilots also needs to focus on value for farmers, not just data completeness. In one early chocolate supply chain with a leading Italian company, the system enabled cooperatives to evidence premium payments to farmers, rather than relying on buyer self-declarations: “In our first blockchain project with [a premium Italian maker] … it’s possible to prove they paid the premium to farmers.” The detail matters because it shifts agency when first-mile actors can originate and attest to claims, the power balance improves, and, from my perspective, we can ensure fair and premium returns. It is still a pilot, but this is the shift of power needed. 

Building the ecosystem

Traceability can be an enabler to solve problems and create a thriving ecosystem for farmers. Once plots are digitally mapped and linked to production histories, new services become viable and possible. Insurance needs to know where a plot is and what it grows, or supply chain finance needs confidence in volumes and counterparties. Even nature markets need geospatial evidence to issue credible carbon or biodiversity credits. Alessandro sketches the direction: “Through smart contracts and tokens … not only data sharing, but also value sharing … creating a new business model for smallholder farmers.” And on climate and risk tools: “Use plot-level data with satellite imagery to generate carbon or biodiversity credits … and implement parametric insurance because you know where the plot is and what happened there.”

The case shows us the possibilities of using data to provide critical services to farmers and enable them to become more bankable and insurable. Of course, I think there will be a need for clear ownership, sharing, and creating a fair and farmer-centric approach to ensure clear impact. 

Limitations 

Trusty is an interesting case and with a good potential for impact. There are some questions that need to be carefully studied; mainly 3. It is important to have a clear agreement on data rights and consent and policies must make explicit how data are collected, who can access them, and what benefits accrue to farmers. Cost allocation is another area. Who ultimately pays for compliance, and how are benefits shared when compliance unlocks new markets or finance? Finally, credibility. For any certification and standard, it is important to ensure trust and build a clear audit of the collected data. 

EUDR and similar rules will not, by themselves, solve climate risk, price volatility, or the demographic challenge facing agriculture. They can, however, catalyse the adoption of the digital backbone that makes better solutions possible. If we fund the grassroots, have clear benefits and cost sharing, and convert compliance data into finance for producers, we do more than comply. We keep markets open, reduce risk for buyers, and we can attract young people to choose agriculture as a viable, technology-enabled career. Traceability in this form might help businesses create the often advocated shared value. 

illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

Sustainability needs facts, not just promises. illuminem’s Data Hub™ gives you transparent emissions data, corporate climate targets, and performance benchmarks for thousands of companies worldwide.