By: Rafael Tonon
By enabling a more transparent, traceable, and verifiable food system, the Blockchain can solve problems of divergence of information in the various stages of the chain and even support local producers
Last week, a group of global food giants (including Unilever, Nestle and Walmart) joined IBM to use its blockchain network to certify the traceability of the raw material produced by its suppliers. The use of technology, in this case, would enable these food businesses to source information about the origin, condition and movement of food, and, most of all, trace the source of contaminated produce in mere seconds, avoiding their consumers to succumb to illness due to contaminated food – a problem that affects one in ten people according to the World Health Organization. This could be solved using IBM’s distributed ledger technology, by the digital record of transactions instead of a physical one.
This is just one of the many ways blockchain can enable us to obtain a more transparent, traceable, and verifiable food system. The fact is that the current system we have today is very susceptible as it waves its way from producer to purchaser, ending up in a process that can be inefficient, costly, and very exposed to contamination and food frauds.
“We’re trying to use that to get that transparency across the whole system so that we can find the problem, so that we can make it easier for people to run safer systems, run safer food supply chains”, said Brigid McDermott, IBM’s vice president for blockchain business development, to CNBC.
Blockchain can radically change the way we consume our food. It enables a new era of end-to-end transparency in the global food system allowing all the spheres to share information rapidly and with confidence across a strong trusted network. The technology is best known by its association with bitcoin, since it was created by bitcoin-founder Satoshi Nakamoto to serve as the public ledger for all bitcoin transactions.
For those not so familiar to the concept, blockchain is a kind of decentralized log of data maintained on a network of computers, rather than a physical ledger. This digital ledger provides a secure way of making and recording transactions, agreements and contracts – anything that needs to be recorded and verified as having taken place. The main point is that each ledger can only be changed when there is a consensus among participants, who agree and validate transactions, avoiding any kind of adulterations.
In many blockchain-based platforms, when a transaction is validated, a contract is automatically created, without the interference of institutions like banks, since the trust relation is built into its transparent nature.
In this sense, there are many startups that are changing the game of food in the world today. One of them is the Swiss Ambrosus, launched last month, whose activities will begin next month. According to Ambrosus’ website presentation, the company is “combining high-tech sensors, blockchain protocol and smart contracts” to build “a universally verifiable, community-driven ecosystem to assure the quality, safety and origins of food products”. At the Ambrosus project they claim to be creating “a trusted ecosystem where we can reliably record the entire history of products and execute commercial transactions accordingly”.
The startup is using cutting-edge technology to improve the food supply chain, from the farm to the consumers’ plate, with the blockchain ensuring the integrity of the data. ITcoin, a Russian startup, is doing something similar as it got the country’s first sanctioned cryptocurrency for tracking and verifying beef.
“Low volatility allows ITcoin to be used for settlements – basically a form of commodity barter relationship in which all participants are fully protected,” said the currency’s creator Denis Ryndin.
ITcoin intends to use Blockchain technology to microchip cattle to track their health and condition online. According to Ryndin, the transparency of the whole process, in turn, increases investment confidence in agriculture.
Something that American agtech bext360 is persuing itself. Using machine vision and artificial intelligence to source high-quality agricultural products directly from the source, the company is trying to change the commodity-based economy by eliminating the informal payment methods that always prevailed. They are focusing first on coffe farming in Africa and Central America, but they intend to encompass other commodity cultures in the near future.
The company makes digital payments utilizing blockchain technology directly to the stakeholders, avoiding variations and different interpretations of prices, guaranteeing a fairer payment to farmers.
According to Fausto Vanin, from Blockchain Academy in Brazil, there are two main applications of the technology in food production: first to solve problems of divergence of information in the various stages of the chain, and second to support local producers, creating their own currencies and allowing the generation of savings for more segmented groups such as organic produce, gluten-free food, and others that require traceability.
“Today there is an asymmetry of information in food production, where some elements of the chain know more than others,” he says. With the blockchain technology, he explains,all information is more accessible, transparent and traceable. And with more – and better – information about what we eat and what we buy, we can further transform our relationship with food.