Blockchain and Our Food Supply Chain

Blockchain technology is currently most synonymous with financial technology – most notably cryptocurrencies – but its potential ability to provide indisputable and tamper-proof records could increase trust and reliability among untrusted counterparties in all industries. Distributed ledger technology, or “blockchains”, represents a new and innovative approach to decentralizing data infrastructure. The central properties of the technology are fault-tolerance, transparency, full traceability of transaction records, and autonomous recording transaction executions.

Agri-Food supply chain traceability and provenance systems have typically used a centralized cloud infrastructure. Problems with such a setup include not only a lack of transparency, but also issues of availability, data lock-in, confidentiality and auditability. Such a system is thus exposed to issues including data integrity, tampering and single points of failure. Meanwhile, traditional logistics systems in Agri-Food supply chains merely track orders, deliveries and inventories, again, without providing the added value of transparency, traceability and auditability. Additionally, typically absent from these systems is information regarding quality, growing conditions and provenance – the details that consumers are increasingly prioritizing in their purchasing decisions.

Blockchain technology is slowly making its way into the Agriculture and Food (Agri-Food) industries. Restaurants and consumers are more invested than ever in the origins of their ingredients. They increasingly seek – if not demand – real-time intelligence regarding the origin, handling and quality of the products with which they come into contact.

It’s simply not possible to develop a relationship with each grower and producer whose ingredients wind up on our plates and in our beverages. However, “blockchain” is an emergent technology that can enable us to transparently track our products, from their specific origins, through the supply chain, to the point of consumption.

Such transparency and traceability has previously been used by artisanal and e-commerce-only companies looking to leverage customer confidence into increased share of markets that are typically dominated by far larger industry mainstays. These larger competitors have begun to respond with measures aimed at increasing transparency into their own products and supply chains.

Transparency and traceability begins at the source. This involves not only the identification of purveyors, but also the tagging (with “smart-tags”, such as barcodes or QR codes) of individual plants or livestock. Each code is unique to the specific plant or animal with which is associated, and provides remotely accessible “blocks” of data, including information about the health, growing conditions and provenance.

The process begins on the farm, with producers scanning uploading in real-time data to the blockchain, using mobile devices, about the planting or animal care processes. This way, we can know, from the very beginning, the amount and type (organic, fair trade, etc.) of seeds used in a particular crop, the amount of feed given to livestock, as well as any illnesses or health concerns. Imagine being able to trace your coffee beans back to the plot of land on which they were grown, or the precise time and location at which your seafood was pulled out of the water, or the health and dietary profile of the cow from which your steak originated.

Tags can be equipped with “smart sensors”, which can automate the data entry process and update at regular intervals, or when anomalies are detected, with all data records autonomously store in the blockchain. Producers and providers can store in the blockchain details (products types and amounts) of raw materials purchases and sales. Again, smart-tags can be used to automate this process.

As the process moves forward, information is automatically recorded in the blockchain for each step – irrigation, fertilization, growth rates, harvests – via each plant and animal’s tag, working in concert with additional equipment that’s connected to the system, like weight scales. After harvest, transfers in the ownership of products to distributors and processors can be made and autonomously tracked (again, in real-time), via blockchain.

Once the distributor has delivered products, a processor can update records to reflect: the amount of product received; the amount from each shipment that was able to be packaged and, consequently, the amount of product lost, damaged or deemed unusable during this phase. Upon completion of processing, a  processor can traceably transfer ownership of the processed product to retail distributors directly through the blockchain. On receipt of shipments from distributors, retailers and restaurants can record in the blockchain details about the their orders, including the amount of product received, condition of products on receipt, and the amount of product lost, damaged or otherwise deemed unusable.

In the final stage of the process, retailer outlets and restaurants can store in the blockchain details about the products sold, with the confidence that comes with truly knowing the origin and quality of the products they’re purveying. Smart-tags can be associated with each retail package, so that discerning customers can transparently verify the detailed history of a product, and have the utmost confidence in the quality of their purchase.

Every step of the way, all of the information recorded and stored in the blockchain is accessible via a portal set up by the provider of the infrastructure (IBM is a market leader). Members of the supply chain are granted appropriate levels of – typically the ability to view previously stored data, as well as to store new data pertaining to their role in the process. End customers can also see the recorded data about the foods they’ve purchased, though they are granted read-only access, and view the information through an app designed by the product’s producer, or the retailer from whom it was purchased.

Delivery of this transparency and traceability is not without its challenges, both infrastructural and in the habits of the human work force. The ubiquitous blockchain solution described above, seamlessly spanning the entirety of the supply chain and capturing every pertinent data point, is still a work in progress. Most companies that have announced plans for, or actually begun testing blockchain solutions are either still in the testing phases or in the early stages of a rollout.

The reasons for this trace back to issues of long-engrained employee tendencies, staffing and, predictably, money. For starters, many smaller farms and processors simply lack the resources to implement a comprehensive blockchain infrastructure. Even in the event of an implementation, the training of employees in its correct usage is paramount- and costly, both financially and in terms of time.

In many cases, smaller businesses and eateries have long recorded and tracked the information discussed above – to far lesser degrees of granularity, often with imperfect data – manually, often with little more than a simple spreadsheet. The sudden implementation of a blockchain system, in addition to being costly, runs the risk of generating a technological culture shock among employees that are totally unaccustomed to its use. Without the proper integration and training, workers across the entirety of a company’s supply chain could struggle to find both the time and inclination to learn the correct use of such a system.

However, larger technology providers are working on solutions to allow smaller farmers, processors, retailers and restaurants to quickly and accurately record their data. A industry-standard solution has yet to emerge, but experts suggest that mobile applications and uploadable spreadsheets leveraging larger, existing IT systems are under consideration.

In the march toward a standard, scalable solution, we can expect large food companies to look to develop proprietary technologies, but there are also startups and smaller, growing companies to whom the industry may turn. One such company, Farmer Connect (a partner of IBM’s), provides consumers with comprehensive data regarding the provenance of coffee, requires nothing more complex than a mobile phone for a grower to upload information to the blockchain. Meanwhile, an increasing number of companies, some more established, like Quebec-based OPTEL and Germany-based TE-FOOD, as well as startups, like San Francisco-based and Oregon-based Provenance, offer comprehensive blockchain-based food traceability solutions. Each company’s platform is accessible via smartphone and offers a data-rich dashboard from which to access and analyze information.

The market strives to develop user-friendly solutions for smaller companies with neither the budget nor the IT staff to undertake a full blockchain implementation. All the while the aim of these solutions – to facilitate the real-time collection of accurate and transparent data regarding the origin, handling and quality of food products – will only gain in significance, both among counterparties along the supply chain, and for discerning consumers seeking not only quality, but also trustworthiness in their food purveyors.

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