Ethiopia has signed a Memorandum of Understanding with a Hong Kong-based company to use blockchain to improve the value chain of the country's coffee.

Input Output Hong Kong (IOHK) runs a blockchain application platform called Cardano whose native cryptocurrency is ADA.

Ethiopia seeks to use IOHK's technology to manage the supply chain of coffee, trace its distributed shares and to improve security especially to prevent adulteration or mislabelling.

Coffee grows freely in the plateaus of Ethiopia unlike in other coffee-producing countries of the world like Brazil.

According to John O'Connor, Director of African Operations at IOHK, the country which is home to about 100 million people is the only place in the world where coffee just grows and nothing is required to be done to pick it off the ground in most parts.

While this makes Ethiopia Africa's largest coffee producer and one of the top producers in the world, it did not help give priority to the need for much investment to be made to improve its production efficiency.

As a result, the country's coffee industry has been faced with several challenges including proving the origins of coffee. The East African country now seeks to use blockchain to track the supply chain for its largest export as well as other areas of agriculture.

The blockchain technology is expected to enable all participants in the supply chain to trace and track coffee as it makes its way from rural farms to wholesale buyers.

Managed autonomously using a peer-to-peer network for authentication through mass collaboration, blockchain will also allow data to be stored, enables coffee buyers to authenticate and determine the origin.

It will also help provide regulators with production information such as the use of any pesticides and facilitate making payments and extending loans to farmers.

According to the MoU signed between Ethiopian Minister of Science and Technology, Getahun Mekuria and CEO of IOHK, Charles Hoskinson, IOHK is also offering to train up to 100 Ethiopian software developers in the Haskell programming language.

Cardano, which launched in October 2017, is written in Haskell - a more challenging language to learn than more popular ones like Java or C++. Mekuria wants the first batch of students from Ethiopia to be women who are recent graduates from an Ethiopian university with a computer science or related degrees.

O'Connor says trained Ethiopian developers are expected to start contributing to Cardano code by the end of 2018.

IOHK follows the likes of Starbucks (in Costa Rica, Colombia and Rwanda) and startup bext360 (in Uganda) in tracing coffee on the blockchain.