Of all its use-cases, Blockchain may be best suited for optimizing industries with complex supply chains. With global travel in multiple modes of transportation and numerous disconnected companies and contractors all coming together to form a Frankensteinian creature, a lot can, and does, go wrong. Fraud, incompetence, shirking responsibility are all commonplace, and the current system of accountability, such that it is, was designed for a different era when the world was a much smaller place.
One industry that ticks all these boxes is food production, again earning its share of infamy for the recent salmonella outbreak brought on by tainted snack food in the USA. Not only did the recall come too late to save the victims, but as of yet, no blame has been levied on responsible parties. Brand identity has been shaken, and consumer trust may not return for years.
Companies have released the usual slew of PR damage control, but if you listen extra closely you can hear them scrambling behind the scenes, working round the clock to use technologies like blockchain to prevent this from ever happening again.
The most obvious application of blockchain technology is food safety. From a preventative standpoint, participants along the supply chain such as growers can analyze their products for various contaminants. If the tests fail, the smart contract needed to hand off to the next participant (e.g. processors) would fail to execute, preventing the compromised food from proceeding along the supply chain. All analysis would stream directly to the blockchain, preventing the grower from retroactively altering it to avoid accountability. While it’s impossible to prevent someone from putting fake information onto the blockchain, to begin with, this kind of behavior, once discovered, would not only carry legal penalties but an indelible black mark in the platform’s reputation system.
Even if contaminated food does make it to retailers and onto the customer’s plate, blockchain can mitigate the damage. By tracing the food’s journey through the supply chain, one can make a precise determination of when and where the trouble started. Instead of recalling the product entirely, costing the company and innocent farmers, only a specific batch can be recalled. The process can also happen within hours instead of days or weeks typical of the current system.
You Are What You Eat
As the global food supply chain has grown in size, consumers have become more and more alienated from what they eat, leading many to demand labels such as locally-grown, farm-to-table, and sustainable. People are anxious about the environmental cost of shipping food across countries, or of unfair practices carried out by other governments. Many also believe in supporting local farmers, and that food grown locally is healthier. While there are government regulations on what constitutes ‘organic’ food, other labels may not be as trustworthy. With the help of blockchain and IoT track and trace, a customer can scan a QR code on their food and discover its entire life story. What farm did it originate from? When was it picked? How many miles did it travel to get to the grocery store?
An example of this end-to-end transparency is currently underway in Finland, where the IBM blockchain is being used to show information about fish, including the lake it was caught in, and eventually, which fishermen were responsible. In other countries, this level of granular detail is essential for those who want to boycott practices like scraping the ocean floor or catches taken from off-limits parts of the ocean.
It will prove quite an endeavor to shift the global food supply onto the blockchain, and numerous obstacles remain. If multiple companies launch their own blockchains it could create confusion and possibly splinter the supply chain across platform lines. If one blockchain emerges to rule them all, it will defeat the decentralized purpose of the technology, as one company will be required to run it. There is simply no way that the global food supply chain can operate on anything resembling the Bitcoin or Ethereum blockchains, at least with the scaling issues they currently experience. Blockchain centralization is already underway, in fact. IBM has made partnerships with Walmart as well as ten other major food suppliers in the US.
Another issue is the threshold of technology required. Many participants in the supply chain still use pen and paper for their record keeping. This could be out of sheer luddism, but one has to accept that many parts of the world are either too remote or not technologically advanced enough to make use of the blockchain. Many farmers operate at a very narrow profit margin as well, often relying on government subsidies to make ends meet. Despite some economics that blockchain brings, many may resist the upfront cost.
Even if it’s not fully adopted in the near future, blockchain still holds enormous potential for the global food system. As the world population grows, the food supply needs to grow with it, and our descendants will thank us if we can find a way to keep everyone fed and healthy.