The agricultural supply chain is the bedrock of our economy. But it is plagued with inefficiencies. Blockchain technology could fix the problem.
Courtesy of Pixabay
The food on your table may have traveled thousands of miles across states and countries before you bought it. There are often hundreds of participants in this complicated supply chain. While this offers a wide variety of consumer options, it also poses challenges.
Our agricultural supply chain is becoming increasingly overloaded. Its inefficiencies cost the economy around $ 400 billion each year. In view of the increasing challenges posed by the climate crisis, it is more important than ever to get this problem under control. Blockchain technology could help solve the problems facing our agricultural supply chain.
What does blockchain have to do with supply chains?
Most people associate blockchain with bitcoin. However, the technology itself is relevant to many industries. Blockchain technologies are distributed, cryptographic ledgers that anyone can access with the right keys. At the same time, they cannot be changed or changed by anyone.
Blockchains therefore offer secure, transparent data storage that fosters trust. Some describe the value of the blockchain as a “single source of truth” that has no middlemen. This has many uses in the food industry. For example, consider that 71% of consumers put a premium on traceability.
Combined with IoT (Internet of Things) technology and data analysis, blockchains can provide a common protocol for every actor in the supply chain to log and share data at every stage of the goods journey.
The process can be used to motivate each participant to provide critical and accurate data, reduce the cost of inefficiencies, increase profits, and meet government and consumer driven sustainability and transparency goals.
Example of sustainable seafood
To understand how this works, let’s look at the hypothetical journey of a sustainably farmed salmon shipment. Each fish is given a label with a QR code. This code contains all the data about the origin of the salmon, including where it was raised and how and when it was packaged.
As the salmon moves through each stage of the supply chain, key parameters and transactions are recorded. Every actor in the supply chain can view the status of the salmon including its temperature. More importantly, you can see what happened at each stage and who was involved in it.
Once the salmon is on store shelves, the customer can use the same code to identify the origin of the fish and confirm that it has been fished sustainably. You can find more information on this concept in the Fishcoin ecosystem.
This process has several implications. This makes it much easier to identify and eliminate bad actors in existing supply chains. It also enables contamination to be located quickly.
Finally, consumers and food retailers get verified origin and traceability. This can also help downstream actors like hotels and restaurants meet consumer preferences while strengthening their brands.
Corn harvest under Pixabay license
Examples of current projects
There are many similar blockchain projects underway. Here are some of the most interesting ones.
The Norwegian seafood association Sjømatbedriftee announced last summer that it is using IBM’s blockchain solutions to provide origin and tracking information, and to ensure food safety and quality. Interestingly, Denmark’s BioMar, a supplier of fish feed, has joined its network and added another dimension to traceability.
One of the most interesting projects is Esri’s Geo Blockchain project to combat food spoilage. The company’s example combines IoT monitoring devices with geolocation data on a geographic information system (GIS) map.
The aim of the project is to provide an immutable record of the temperature at certain points along the product journey. This would enable a supply chain manager to identify exactly where problems are occurring in a supply chain and implement steps to eliminate or mitigate the problem and improve the overall efficiency of that supply chain.
There are other projects that aim to make customers safer. For example, the Malaysian Palm Oil Council (MPOC) uses blockchain to monitor sustainable palm oil production.
Palm oil is an important product for the Malaysian economy, but illegal operations have caused significant environmental damage. This has hurt consumer confidence. With blockchain, the organization can demonstrably prove to consumers that their palm oil was actually produced sustainably.
Blockchain technologies are only part of the puzzle
Blockchain technologies are only part of the solution to the problem. To be effective, it needs to be connected to other technologies, especially GIS and IoT.