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 stitched together into a Frankenstein’s monster, a lot can and does go wrong. Fraud, incompetence, and 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 void, preventing the compromised food from proceeding along the supply chain. Because smart contracts contain legal terms in the form of executable code on the blockchain, all transactions would automatically harmonize with local regulation.
The result of the smart contract (execute or void) stream directly to the digital ledger, preventing the grower from retroactively altering it to avoid accountability. While it’s impossible to prevent someone from putting fake information onto the blockchain, this kind of behavior, once discovered, would not only carry stiff legal penalties but an indelible black mark on the blockchain platform’s user reputation system.
Even if contaminated food does make it to retailers and onto the customer’s plate, the blockchain can mitigate the damage. By tracing the food’s journey through the smart contracts along the supply chain, one can make a precise determination of when and where the trouble started. The process takes hours instead of the days or weeks typical in the current system, and instead of recalling the product entirely, which penalizes innocent farmers, only a specific batch can be flagged.
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 feel anxious about the environmental cost of shipping food across the world and unfair labor practices carried out by corporations. 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 record which lakes fish were caught in, and which fishermen were responsible. This level of granular detail is essential for those who want to boycott ruinous practices like bottom trawling.
Choppy Waters Ahead
Blockchain’s decentralized nature is also its Achilles heel. There is simply no way that the global food supply chain can operate on anything resembling the Bitcoin or Ethereum blockchains, at least not with the scaling issues they currently experience. If one blockchain emerges to rule them all, questions will arise as to whether it’s truly impartial or not. Smart contracts, for example, might be written to satisfy the enterprise in charge rather than all users. Nevertheless, centralization seems to be the way matters are heading, with companies like IBM forging partnerships with Walmart as well as ten other major food suppliers in the US.
Another sticking point is the threshold of the technology required. Many participants in the supply chain still use pen and paper for their record keeping. This could be out of sheer stubborn 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 economic advantages that blockchain brings, many may resist the upfront cost.
Even if it is 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 keep everyone fed and healthy.