With the rise of bitcoin and other cryptocurrencies came the rise in popularity of blockchain technology. The backbone of cryptocurrencies, blockchain is “a continuously growing list of records, called blocks, which are linked and secured using cryptography”. It is a distributed database, inherently resistant to modification, as any change would require a brute-force (and expensive) attack on the whole chain. To put it simply, all information put on blockchain is set in stone. The promise of blockchain, therefore, lies in the decentralized power over data ownership.
Although blockchain found its first use in the financial sector, the agriculture industry shows that blockchain can be applicable within other industries acting as the new “trust machine”. This trust machine is a useful tool for a safer supply chain from farm to fork.
Information asymmetry and a crisis of trust
Serving many functions, agri supply chains are awe-inspiring in terms of complexity. In a highly interrelated, interconnected world, existing IT systems are limited when it comes to understanding and handling such volumes of data. Hence, agrifood companies are highly vulnerable to trace the origin of the problem/fault.
It takes 20 years to build a reputation and 5 minutes to ruin it.
All the while, the reputation of the agrifood company can be exponentially negatively affected by the fast pace spreading of information by social media. For example, the horse meat scandal in the UK has drawn a lot of attention to ingredients used in a product. Moreover, consumers are still unable to identify high quality food, due to information asymmetry.
A recent study suggests, that this asymmetry can create market failure, with consumers risking the danger of selecting lower quality, or even unsafe food caused by the absence of reliable information relating to food quality.
This brings to the forefront the demand, and need for consumer-centric supply chain transformation. As companies face mounting demands for traceability from consumers, blockchain emerges as the likely vehicle that can provide integrity and security for the supply chain data.
With blockchain, even the smallest transactions, regardless of where they occur in the supply chain, can be monitored efficiently and communicated.
Building Provenance: real-time, trustworthy data, from supplier to shelf
Companies are now pioneering novel solutions that use blockchain in a wide set of applications; starting from supply chain optimization, fraud detection/prevention, to ensuring transparency, security and trust in products and certificates, as well as, product authentication and brand protection.
Provenance is a UK-based startup, building a blockchain-enabled traceability system in the form of a data platform. The startup partnered with the Soil Association to create the first digitally native organic certification mark. They utilized technology including NFC tags and QR codes to link point-of-sale material with the Provenance platform. Shoppers simply need to scan or hover their phones to see information of their chosen organic product in real time, including the certification’s validity, the organic criteria met by a product, a map of its journey, and photographs from the farm.
A big barrier to mainstream blockchain adoption
Blockchain-enabled technologies may seem like a panacea for a wide range of issues in agriculture and food systems. However, the process of adoption will be gradual and steady, not sudden, as there are also many adoption hurdles that need to be overcome. For example, a blockchain database must store data indefinitely, and from a cost perspective, this is extremely expensive. Moreover, the number of transactions per second is limited.
However, scalability is not the only barrier to adoption of blockchain in agrifood. It is also critically important for all stakeholders along the supply chain to adopt blockchain, albeit all companies and organizations are not equally agile.