Is it possible to apply blockchain solutions to the food supply chain for traceability? It was a technology developed for the financial sector and crypto-currencies. However, we can use it due to its potential to simplify the access to accurate data about the sources, manufacturing conditions, and delivery of a product through the supply chain. The food chain is one of the world’s most dynamic and fractured supply chains. Many businesses are exploring the ability to track and guarantee the provenance of a food product while tracing under what conditions it was made. They believe that a blockchain-based food traceability supply chain system can be the most viable solution for achieving trustless traceability and transparency across the food supply chain.
Why is Food Traceability the Need of the Hour
The food supply chain may comprise an average of 10-15 intermediaries that are interdependent but often have low confidence among each other. It makes it hard for retailers and wholesalers to identify the origin of a manufactured and shipped product and track its end-to-end movement. Further, fragmented channels of communication usually occur between two actors at a time and in only one supply chain path. Also, the slow process of digitization and time-consuming administration impedes efficient communication.
Disparate data systems ensuring ineffective transparency in the supply chain minimizes corporations’ ability to influence progress, not only in manufacturing processes but also in fraud prevention. On top of this, the necessary data never reaches a user.
It is not easy to improve accountability in the food supply chain. It needs all players in the supply chain to have the will and cooperation.
Unfortunately, disputes are common, while solutions are expensive. Ensuring that requirements meet demands, it requires to follow up vendors. It is a time-consuming process due to collaboration being uncommon.
Can Blockchain be the Right Technology for the Solution
Blockchain is a distributed digital ledger-based network that can act as a decentralized food industry database. Its infrastructure enables blockchain-connected actors to access all data exchanged by all actors in the chain in real-time. This technology can also enhance the requisite trust between actors. Without network consensus, nobody can manipulate or retroactively alter the submitted data to the blockchain. Essentially, blockchain can make food safety, control of origin, and traceability processes dramatically simpler. Take a look at the following diagram to understand how products may move across the supply chain, with traceability and transparency.
Traceability System Based on Blockchain and Internet of Things
Blockchain has tremendous potential in the food industry when combined with the new data-capture technologies. Based on its strengths and the Internet of Things ( IoT), it can revolutionize the food industry. IoT technologies, connecting the physical and digital worlds, can capture data such as temperature and humidity during product shipping or storage. Further, blockchain can provide a network-wide, secure, and permanent database in which every participant in the supply chain can store and access data.
The following can be the benefits of the integration of blockchain technology with IoT sensors and trackers provide:
Streamlined supply chain and reduced costs for retailers
More clear compliance with regulations
Strengthened and fast food recall cycle
Blockchain could radically change the food supply chain as per the United Nations Food and Agriculture Organization (FAO) policy paper for 2018. According to the policy paper, blockchain technology will facilitate the creation of a transparent supply chain contract between different disconnected parties, enabling end-to-end transparency throughout the system.
In the supply chain network, a smart contract solution can come in use to reduce the number of intermediaries. Serving as an alternative, smart contracts can significantly reduce transaction costs, increase margins, and boost productivity. Thus, it can lead to a large chunk of income going to the farmer/producer. Here’s a diagram of how the system would work.