Can Blockchain help to overcome challenges in the food supply chain?

Networks around agriculture and food supply chains are an important factor for producers’ access to new markets. These platforms can have a major impact on the economic, social and environmental sustainability of areas with agricultural production. Blockchain is a game changer in this field, due to the distributed nature of the technology. Smart farming, in the sense of urban farming with various distributed production units are a perfect match case, an will utilize the new technology for various application in the future of urban and smart farming.

Is traceability a value in itself?

After issues with various food borne diseases have emerged, a clear demand for food safety and comprehensive traceability to track down root causes of these failures along the supply chain came up. The chance that blockchain might give traceability solutions looked promising so far. In fact, Walmart and Nestle, along with eight other organizations launched the Food Trust, to restructure how food is transported across the globe, if this transportation Armageddon makes sense at all (…read more about the ten companies, including Walmart and Nestlé, who have formed the Food Trust group ).

Simply put by Frank Yiannas, VP of Food Safety for Walmart: “Blockchain is the FedEx for tracking food”. Tracking down a source is not new in supply chain business, but Blockchain can fundamentally increase the speed of traceability. For instance, Walmart stores serve fresh sliced mangoes which are mostly grown in Central and South America. Furthermore, they are transported by road, air and sea to America and then sliced, packaged and distributed across the region.

While Walmart, Nestle and others try to trace issues, the technology helps even to understand the complexity and the global extend of the food miles created along the chain and day by day. So far, these organizations use blockchain to increase the pressure down the supply chain, only. Any of caused food miles are just collateral and not in focus yet. That might change, when customers ask more questions about their food’s mileage.

Traceability & Food Safety

One major reason why blockchain has created an interest among the masses is because it seems to be easy like any other money transfer, a way to tell a bank to transfer values between accounts, but just in the cloud. When it comes to tracing a transactional event, you don’t have to rely on a single person or organization to do so. You or anyone who has access to the chain can get the trusted data as it is available on cloud.

Simply put, blockchain is an online distributed ledger as all the transactions recorded on a blockchain are on cloud-based servers. Each block in the chain contains data of a transaction. In case of food traceability, a so called Farmlyledger may include the type of crop planted, seeding, transplantation and harvest date and time, temperatures and weather conditions, how far the crop was transported between the stations in the supply chain and other details.

Added value along with traceability

Although, blockchain can quickly identify a product back to its source, it has limited capacity in tracing the source of contamination. There is a challenge in determining the accuracy of data gathered on a blockchain.

Hence, the food industry has been focusing on designing a critical tracking event (CTE) framework to smoothen traceability. It functions on the premise that each operator knows his/her operation and guides on how to collect the traceable data.

Farmlyledger goes beyond that and puts the executed operation (process), the acting subject (person) and the particular physical object (product) into the equation and builds discrete blocks in the blockchain behind Farmlyledger.

Safe and authentic products

Firstly, recent examples show, that this is not just academic science. In July 2019 a poultry mishap in Brazil came up, where one million salmonella-infected chickens were sent to UK within two years – that questions food security in general. Secondly, quality products like a virgin olive oil or Manuka honey have even higher bids. Thirdly, and most importantly, these high quality and premium products are, on the radar of criminals who replace them with inferior quality oil or honey and make profit under false flags.

Moreover, pretending to be a premium product or otherwise certified organic, local, kosher or halal product might not only put producers and brands on risk, but also the customer. Such scenarios create the risk for gigantic losses for businesses and insurance policies can’t even cover them. In other words, a product standard recall process depends on physical damages, however product counterfeits don’t fall under this.

Conclusion

Companies are taking steps to simplify their supply chain to avoid such issues. A thorough supply chain which can’t be circumvented is one approach to minimize the risk and will protect the reputation of producers, brands and retailers. Putting actors, quality processes and locations into a Farmlyledger makes fraud less likely to happen along the whole supply chain.

This post is also available in: Deutsch (German)

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