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Blockchain & Food Traceability

Traceability has become a critical tool for implementing and operationalizing standards and regulations by increasing transparency across food supply chains (Blockchain & Food Traceability). Simply put, traceability is all about tracking a product from production to consumption. 

A traceability system refers to the totality of data and operations that maintains the required information about a product and its ingredients throughout its production and utilization chain. The system will collect and record data points as a product transits through one market player to another along the chain. The data is used in undertaking real-time and ex-post tracking of the product’s movement through the value chain from its origin to the final destination. Traceability systems differ widely in their sophistication and scope. Some methods work to collect data from the entire production chain, while others record data from part of the production chain. Another difference is that of individual firm-level systems that capture information of a single supply chain and multi-stakeholder traceability platforms that track products across an entire food system.

Blockchain is finding widespread application in food traceability systems to improve food safety control and allow both public and private sector players to verify that food products satisfy regulatory requirements and market standards. The technology will help get swift responses from regulators, and industry stakeholders in the event food safety breaches are detected. 

Blockchain is offering immense opportunities for the expansion of traceability. The use of technology comes at an opportune time when the global burden of foodborne diseases is relatively high. The technology will help food growers, food processors, and food packers build cross-border synergies and transparency necessary for access to regional and global markets. In the design of traceability systems, end-to-end traceability systems are highly reliant on multiple factors such as digital capacity, physical infrastructure, data use regulations, and market incentives. All these factors are usually nascent or absent in developing markets. The gap is being filled by blockchain technology which confers to smaller food industry players with similar capacity to the international food chains that can deploy the required food traceability infrastructure and technology. 

Why is Traceability Important?

Traceability is all about safe food trade, and its primary concern is to reduce contamination, spoilage, and disease throughout the food supply chain. Potential hazards can be identified before affected products enter consumer markets. If unsafe food slips through the cordons and enters the supply system, regulators and other market actors will be in a position to isolate the product and identify the source. The quick identification and isolation of products will go a long way in preventing adverse consequences. Additionally, traceability ensures that the affected food is effectively withdrawn without distorting the market or resulting in unnecessary waste when a product is recalled. 

Traceability is vital for fresh and perishable food value chains since these are the most susceptible to contamination and spoilage. Examples of these foods include dairy, meat, vegetables, and fruits, where health considerations are a top priority. 

Traceability systems have far-reaching benefits to consumer and overall community health. The development of systems that are compatible across borders helps facilitate food trade. It safeguards consumer health since it is possible to verify that the product meets the requisite regulations and standards.

Challenges of Food Traceability and Opportunities for Blockchain

The implementation of end-to-end traceability systems is both expensive and challenging. Since the advent of traceability, it has been mainly driven by the private sector. The investment in traceability systems has been driven by factors such as consumer demands, efficiency improvements, standards compliance, and risk mitigation. 

Developing nations have more significant challenges in establishing traceability due to a lack of technological and physical infrastructure, fragmented informal value chains, and many other challenges. The use of distributed ledger technology in traceability proves to be a masterstroke in bypassing these challenges in developing countries. Blockchain, together with mobile internet connectivity, is bringing a positive impact to agricultural supply chains. Mobile internet connectivity is becoming a critical input for many traceability systems. 

The creation of robust traceability systems supported by blockchain will also bring in transformational food traceability changes and open up international markets. We see its application in the actual proof of origin and accountability system such as single-origin coffee, sustainably grown and harvested seafood, and zero-deforestation food production with immense benefits to local communities. Blockchain is not only an acceptable technology across borders, but it is also eliminating intermediaries within supply chains, meaning these local communities get maximum value for their produce and hard work. 

Blockchain technology provides the advanced technological and record-keeping capacities required by traceability systems serving the small-scale market needs. Adoption of the technology is aiding in the faster integration of small-scale producers into regional and global supply chains irrespective of their location across the globe. Food Trust, IBM’s blockchain-based traceability platform, currently works with 80 retailers and suppliers that include the big retail and food giants such as Carrefour, Nestle, and Walmart. More and more pilots such as FoodLogiQ, Provenance, and LuteniX are being developed and tried out across the world in Africa, Asia, and South America to facilitate access to export markets for small-scale farmers out-growers through traceability.

Finally, blockchain and all other DLTs are transforming how transactions are made and fostering increased transparency. Data that is credited in the blockchain-supported traceability systems are verified by consensus and updated in real-time across actors in the systems. The information is permanently stored without alterations. 

Blockchain technology is not entirely the solution to food traceability; there needs to be a consistent evaluation of market context and operating environment, existing technological infrastructure, incentives to adoption over existing systems, and regulatory certainty. Without a doubt, blockchain has distinct advantages in traceability systems and food supply chain management due to its homogeneity, interoperability, and decentralized nature.

Blockchain & Food Traceability, by Alessandro Civati

Author: Alessandro Civati


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