How Blockchain is Bringing Food Security to Refugees

At a refugee camp far from home, a man passes through an iris scanning terminal to deduct the amount owed for groceries from his digital wallet. This biometric procedure and uniquely assigned digital wallet are part of a blockchain-based food aid system fueled by the United Nations. Could different humanitarian arms of the UN use blockchain as well?

By Poornima Apte, Contributor

Far from his home in Syria, in the Zaatari refugee camp in Jordan, Bassam craves the smallest comforts and remembrances of home. Now he can do just that—efficiently. These days, when Bassam shops for familiar foods at a Jordanian grocery store, he passes through an iris scanning terminal, which automatically deducts the amount owed from his digital wallet.

Known as Building Blocks, this biometric procedure and associated uniquely assigned digital wallet, is part of a blockchain-based food aid system fueled by the United Nations World Food Programme’s (WFP). Refugees such as Bassam, who qualify for food aid, receive a prescribed amount of money per month. Purchases are automatically deducted from this account while the refugee receives notifications about balances and amount spent.

Such a method provides an efficient, faster, and more secure way to deliver vital food aid, says Jonathan Simms, the Munich-based communications and media relations representative at the WFP’s Innovation Accelerator. The Innovation Accelerator funds tech proposals that help WFP meet its mission of zero hunger.

Bassam is hardly alone in using this blockchain-based approach to receive food aid—Building Blocks reaches more than 107,000 refugees housed in the Azraq and Zaatari camps in Jordan. As of December 2018, 78,000 Syrian refugees lived in Zaatari. In June 2019, the UN High Commissioner for Refugees (UNHCR) reported slightly more than 664,000 Syrian refugees in Jordan.

The Key Ingredients

While the UN typically delivers food to unstable areas, Jordan allows for a little more flexibility. “Jordan is a stable economy and has existing markets that we can tap into rather than rely on old-fashioned methods such as air-dropping food to vulnerable areas,” Simms says. Instead of handing out food packets, the WFP, with help from UNHCR, distributes vouchers to refugees, so they can shop for supplies they will use. “This gives them a little more freedom and agency over what they get. We’re not just saying here are some beans and some cooking oil,” Simms says.

However, the food vouchers incur steep bank administrative fees. The idea for Building Blocks came out of the Innovation Accelerator when Houman Haddad, head of emerging technologies at WFP, suggested using blockchain, to decrease the administrative costs associated with cash-based transfers for food aid. After Haddad presented this idea, he and his team went through a one-week bootcamp that laid out a test-drive scenario for the program. The training ground: the Sindh province of Pakistan with 100 beneficiaries. Once Building Blocks outgrew its training wheels in Pakistan, it launched in Jordan in 2017.

As it happens, UNHCR had already instituted the biometric system as a way of tracking refugees and giving them a digital identity, so Building Blocks decided to piggyback on that system, effectively creating a digital wallet for each qualified refugee.

“Now when Bassam or any other refugee buys groceries, that transaction is deducted without any need for third-party or transaction fees,” Simms says, adding that the program has delivered a 98 percent reduction in financial transaction fees.

“In fact it’s more secure than a traditional cash-based transfer where you would have to involve a financial entity who will then have access [to that information].”—Jonathan Simms, United Nations World Food Programme

In addition to lowering administrative costs, the blockchain solution’s ability to remove financial institutions from the food aid process offered another benefit: data protection. Given that the UN refugee programs run on biometric data, a solution that could only be used by stakeholders under the UN umbrella, was also very appealing. “In fact it’s more secure than a traditional cash-based transfer where you would have to involve a financial entity who will then have access [to that information],” Simms says.

The Road Ahead

Building Blocks does its part to stimulate the local economy and shop owners have been happy to participate. “It hasn’t been difficult to get buy-in because essentially WFP is bringing them a large cohort of customers,” Simms says.

The immediate goal for Building Blocks is to reach Syrian refugees outside the two refugee camps in Jordan. The WFP is also exploring how it might apply to other refugee situations like the Rohingya Muslims fleeing Myanmar.

The Innovation Accelerator and WFP are also exploring a new use of blockchain: to tighten efficiencies in food supply chain costs in the Horn of Africa. To address the growing humanitarian crisis in Yemen, for example, the WFP is looking to move aid from its big logistics hub in Djibouti on to Ethiopia and then across the Red Sea to Yemen. Because of the number of players involved, each with their own ways of doing business, such a long trek has met with many inefficiencies. WFP hopes that the Blocks for Transport blockchain program, which they are pilot-testing, might help. “It takes anywhere from 15-20 days for supplies to reach the port of Djibouti from Ethiopia,” Simms says, “the team estimates that with blockchain this could be reduced to three to five days,” which means faster food aid for desperate refugees.

With blockchain, food supplies could be delivered faster (15-20 days reduced to three to five days) for desperate refugees.

The Building Blocks’ team’s ultimate goal is to have the different humanitarian arms of the UN using blockchain: “The exciting aspect of this technology is its many uses. We’re hoping that all of the UN can come together under one block chain umbrella. We’re talking about ways we can share information that stays within the UN humanitarian system and ways to make things more efficient and more secure,” Simms says. “Building Blocks has already proven that we can achieve those sorts of efficiencies with blockchain. We’re now leaning toward that big-picture vision.”

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