Food distribution is one of the biggest challenges in the modern world and blockchain could be the key to addressing it.
Have you ever thought about the journey your food took to get to your plate? Your meal may have visited more countries than you. By purchasing food from further afield, we are able to enjoy a greater variety of non-seasonal meals than ever before, but this variety creates a logistical challenge.
The COVID-19 pandemic has devastated supply chains and exposed deep vulnerabilities. Supply and demand shocks have rocked the markets, generating a new list of winners and losers. Now, many food industry leaders are considering how advanced technologies can improve all aspects of the supply chain, including traceability and trust.
As our supply chains grow, it becomes increasingly difficult for us to monitor our food. This leads to recalls and waste. Blockchain technology could be the tool we need to solve this challenge.
A circular food supply chain creates new challenges
Consider: A food recall produces about $ 10 million in direct costs and significant costs due to reputational damage. For people who don’t know where our food has been it can have significant health or dietary consequences, particularly for those with religious requirements. Supply chain problems also lead to about 30% of our food being wasted before it is even sold. This contributes to global hunger and climate change as we use the earth unnecessarily.
Most of these problems start with the huge number of entities and individuals involved in the food supply chain. This means that there are many different stakeholders, who all need to communicate downstream. If part of the supply chain fails, it can create significant problems later on.
The key, like most things, is clear communication. This is where blockchain technologies come into play. These technologies can create a trustless network that makes it easier for stakeholders to understand the status and safety of food in transit.
It also eliminates the need for direct communication between different actors in the supply chain and provides an easily accessible database. This can extend to the consumer as well, allowing them to see a detailed map of their product journey.
To understand how this works in practice, it’s helpful to look at some real-world examples:
AgriLedger – Building a level playing field for farmers in developing nations
AgriLedger is a UK-based social enterprise focused on helping farmers in developing countries trace the origins of food and gain the credentials they need to grow their businesses. The company provides farmers with a way to digitally identify themselves and prove their income, providing better access to financial incentives.
The company was involved in a pilot project commissioned by the Haitian Ministry of Commerce and Industry. The aim of the project is to use a blockchain-based “transparent trade ledger” to level the playing field for some 600 smallholder farmers looking to sell their mangoes, avocados and pineapples to developed markets.
The system ensures that producers are paid at the spot price for their fruit, rather than being forced to go through intermediaries who would not pay them fairly. The same platform allows consumers to scan a QR code on their fruit before buying it, to show which farmer produced it and its path through the supply chain.
The project has helped farmers generate a 750% increase in revenue per kilo over previous years.
BITCLIQ – Making fishing sustainable
BITCLIQ is working on one of the most important areas for Europe today: sustainable fishing. The European fish stock is rapidly dwindling and monitoring of legitimate catches is more important than ever.
To enable this, BITCLIQ created Big Eye which helps fishing fleets monitor their activity more effectively. More importantly, it allows consumers to easily identify that a fish has indeed been sustainably caught. App users can track the fish back to the vessel it was caught from, find out the fishing gear used, date of catch and more.
The company also produced the first blockchain B2B marketplace for fishermen called Lota Digital. This helps to connect fishermen directly with buyers once their catch is caught. The platform allows buyers and sellers to define the type of fish they want. The fact that the catches are sold before the boat returns to port should help reduce waste and discourage fishermen from overfishing.
Ambrosus – Tracking food from farm to plate
Ambrosus is a blockchain-based Internet of Things (IoT) network designed to track food and pharmaceutical products. The company’s product leverages a network of sensors and databases to improve supply chain transparency. It also creates a unique digital identifier for each item on the network and tracks the entire product journey.
Unlike the other projects on this list, Ambrosus also has a framework that developers can use to build new decentralized apps (DApps). The company is building a framework that will enable apps targeting both consumer and business customers.
Consumer apps would primarily be built around creating transparency and making it easier for customers to track the food they buy. Conversely, business apps would be more focused on data management, designed to make communication between different players in a supply chain easier.
Blockchain could help solve our food supply problems
Properly targeted blockchain solutions could help solve most of the problems we currently face with our supply chain. By providing greater transparency, we can reduce food waste and reduce the environmental impact of farms.
We can also leverage IoT solutions to make communication between different stakeholders easier. This could help address some of the other environmental problems and food shortages we face today. And at the very least, it should make us feel more confident about the food we are eating.
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