Blockchain promises to improve traceability and transparency in the agricultural value chain. The ability to quickly trace the origin of food products will be an invaluable tool in contamination incidents.
With blockchains, regulators can quickly identify the source of contaminants and determine the scope of affected products. A timely response by food companies can prevent disease, limit food waste, and financial loss.
| A report by the Food Marketing Institute and | Grocery Manufacturers Association found that the average food recall costs $10 million, | no damage to the brand and loss of revenue.
Other high-profile recalls have cost up to $1 billion, such as the 2009 salmonella outbreak in peanuts, while the UPC code. provides a number of tracking features, much of this information is recorded in databases and repositories | not stored digitally.
A more accessible and queryable tracking system can be built using blockchain technology, reducing the time it takes for organizations and authorities to identify the source of food contamination.
More than a third of the food grown is wasted, and food waste costs the food industry nearly a trillion dollars annually. When blockchain transactions can be | completed faster and with less potential for disputes, consumption along the supply chain can also be reduced.
They can also help identify bottlenecks that are contributing to waste. The added transparency that blockchain models can play an important role in fighting food fraud. As consumer demand for organic, non-GMO (non Genetically modified organisms) and antibiotic-free foods increases, news is spreading with cases of false labeling. cheat.
The smallest transactions – whether on the farm, warehouse or factory – can be effectively monitored and communicated across the entire supply chain when combined with IoT (Internet of things) Technology such as sensors and tags RFID. Maersk, a shipping and logistics company, has an intercontinental supply chain involving dozens of employees and hundreds of interactions. They estimate that blockchain could save them billions by improving efficiency reducing fraud and human error.
The benefits of enthusiastically extend to all honest market participants. Blockchain technologies can prevent price extortion and delayed payments, while eliminating intermediaries and reducing transaction fees. This can lead to more reasonable prices and even help small farmers hold a larger share of the value of their crops. Take for example the small coffee farmers in Kenya. Coffee in Kenya is often exchanged for about 15 times what farmers are paid for – and then roasters pay more. Blockchain can increase the value of transparency between farmers and markets.
Grain millers (one of the largest oat buyers in Western Canada) are rarely accountable to farmers. They often report lower milling yields, so farmers don’t capture the true value of the crop. In other cases, transportation companies reported higher losses and traders reported prices lower than what was actually distributed locally. When each supply chain participant reports the same metrics for both the sender and the consignee, the true value of the farmer’s harvest can be easily verified.
Farmers around the world, from West African cocoa growers to Indian sugarcane growers, depend on buyers to honor contracts and pay in a timely manner. Buyers often enter into price contracts with farmers before the crop season begins, but default when changing futures prices render the contract unprofitable. Then the remaining poor farmers scrambled for other buyers. Even those lucky enough to find another deal can be forced to take a big discount. Often delays in contracting mean significant product damage, eroding the value of more sales.
A startup, Full Profile, is solving these problems by enabling real-time transactions for farmers through “smart contracts” running on the blockchain. Because the logic (of the contract terms) that has been agreed in advance by the parties can be built into a | blockchain (digital code) – payments can be made immediately after the transfer of property ownership
. Full Profile has estimated that supply chain risks, inefficiencies and insolvency cost the Australian grain industry $1 billion, a substantial percentage that could be offset. through blockchain solutions. Even if contracts are respected, currency fluctuations can create unnecessary costs for all players in the supply chain.
Russia has developed a cryptocurrency system just for its beef market, in order to shield both farmers and traders from this volatility. Blockchain technology is being used by banks to reduce risk through advanced insurance products that use weather data collected from satellites to verify farmers’ identities and certifications.