Chain re­ac­tion

Blockchain tech­nol­ogy has the poteni­tial to trans­form food trace­abil­ity and speed up pay­ments for farmers, re­ports

Irish Independent - Farming - - TECHNOLOGY - Emma Kennedy

AS a con­sumer, how do you know that the free-range eggs you buy are ac­tu­ally freerange? And how can you be sure that a meat prod­uct hails from the farm from which it claims?

And as a food pro­ducer, how can you prove to your cus­tomers that your prod­ucts are as de­scribed?

Food sup­ply is built on trust, but that trust is eas­ily dam­aged, as ev­i­denced by scan­dals re­lat­ing to con­tam­i­nated food prod­ucts, horse­meat mas­querad­ing as beef, and so on.

On Thurs­day, re­searchers and in­dus­try ex­perts will gather in Dublin to con­sider the chal­lenges of food pro­duc­tion and sup­ply chain man­age­ment.

The sem­i­nar or­gan­ised by Tea­gasc, in as­so­ci­a­tion with Cork Univer­sity Busi­ness School and Safe­food Ire­land, will con­sider how new tech­nolo­gies like blockchain can help make sup­ply chains more ef­fi­cient and more trans­par­ent.

Al­ready blockchain is mak­ing waves in the agri-food space, and in­dus­try ex­perts be­lieve that the tech­nol­ogy has the abil­ity to trans­form the sec­tor.

Blockchain makes it eas­ier to trace the jour­ney a prod­uct takes from farm to fork; helps sup­pli­ers, re­tail­ers and food pro­duc­ers to prove the claims they make about their prod­ucts; gives con­sumers ac­cess to more trans­par­ent in­for­ma­tion; and has the abil­ity to trans­form pay­ments sys­tems for sup­pli­ers.

HOW IT WORKS

For many peo­ple, how blockchain works re­mains some­thing of a mys­tery.

“There’s not a great un­der­stand­ing of it,” says Ai­dan Con­nolly, the chief in­no­va­tion of­fi­cer at agri-food and biotech com­pany All­tech.

In a blog post he pub­lished ear­lier this year, Mr Con­nolly (pic­tured) at­tempted to clear things up.

“Es­sen­tially, blockchain is sim­ply an on­line doc­u­men­ta­tion sys­tem that records the trans­ac­tion at each point in the sup­ply chain through an en­crypted block us­ing a dis­trib­uted ledger,” he wrote.

Speak­ing ear­lier this year, Car­los Moedas, the Euro­pean com­mis­sioner for re­search, sci­ence and in­no­va­tion, ex­plained the po­ten­tial im­por­tance of blockchain to the agri-sec­tor.

“Most peo­ple as­so­ciate blockchain with dig­i­tal cur­ren­cies, but if we ap­ply it to the agri-food chain, the im­pact could be in­cred­i­ble,” Mr Moedas said.

“In the event of an out­break of any dis­ease in the food sup­ply chain, a tech­nol­ogy like blockchain could help us pin­point in min­utes, not days, with ab­so­lute cer­tainty where the risk is com­ing from.

“We can go on the jour­ney of the food and limit any ma­jor spread be­fore it even be­gins.

“We could in­no­vate our way to­wards to­tal trust in our agri­food chain.”

IN­NO­VA­TION

Fin­is­tere Ven­tures, a com­pany that in­vests in agtech start-ups, has seen an in­creas­ing num­ber of start-ups con­sider the po- ten­tial of blockchain and its applications.

“It’s very trendy. It’s a def­i­nite buzz­word,” said Kieran Fur­long, who heads Fin­is­tere’s Dublin of­fice. “Trace­abil­ity and prove­nance are the applications [of blockchain] that peo­ple are talk­ing about the most.

“Trace­abil­ity is pos­si­ble with­out blockchain, so it’s im­por­tant to re­mem­ber that the process isn’t some­thing new.

“Peo­ple have used pa­per ERP [en­ter­prise re­source plan­ning] sys­tems. So you don’t need blockchain to do it, but it po­ten­tially makes it eas­ier.”

Mr Fur­long pointed to a re­cent shift that is likely to drive blockchain’s adop­tion among re­tail­ers and food sup­pli­ers.

“Con­sumers are more in­ter­ested in where their food comes from.

“If you look at a piece of steak in a supermarket, it has come from one an­i­mal, and so should be easy to trace,” he said, ex­plain­ing that a DNA code or other unique iden­ti­fier serves as a unique ref­er­ence in a blockchain-based trace­abil­ity sys­tem.

How­ever, Mr Fur­long said such a sys­tem could still be hit by hu­man er­ror.

“The first step re­quires a hu­man gen­er­ally, to get the in­for­ma­tion, the unique iden­ti­fier, into the sys­tem,” he said.

IM­PACT

Pro­fes­sional ser­vices firm Deloitte re­cently pub­lished a re­port look­ing at how blockchain can trans­form the beef in­dus­try.

“Farmers will in­ter­act with the tech­nol­ogy with­out re­al­is­ing,” the re­port noted.

“Blockchain is the un­der­lined tech­nol­ogy that the ecosys­tem will ex­ist on, sim­i­lar to the way the Google search en­gine op­er­ates on the in­ter­net.”

Deloitte’s re­port sug­gested a num­ber of ways that blockchain could shake up the beef in­dus­try.

For ex­am­ple, it said the tech­nol­ogy could be used to prove “to mar­ket reg­u­la­tors, re­tail­ers and con­sumers that Ir­ish cat­tle are pre­dom­i­nantly grass-fed and graze on open pas­tures for the ma­jor­ity of the year”.

Cil­lian Leonow­icz, head of busi­ness de­vel­op­ment at Deloitte’s EMEA Blockchain Lab in Dublin, said that blockchain tech­nol­ogy makes it eas­ier to trace food prod­ucts, not just from farm to fork but from “con­cep­tion to con­sump­tion, soil to sewer”.

Mr Leonow­icz said that this end-to-end trace­abil­ity en­ables the source of a dis­ease out­break to be “pin­pointed straight away”, and can link to re­tail­ers’ sys­tems and alert re­tail­ers and con­sumers that a prod­uct is not safe to eat.

RE­TAIL

Al­ready a num­ber of ma­jor re­tail­ers around the world are us­ing blockchain tech­nol­ogy.

For ex­am­ple, re­tail giant Wal­mart has part­nered with IBM to in­tro­duce blockchain tech­nol­ogy in its sup­ply chain.

“Thou­sands of in­di­vid­u­als work to pro­duce a va­ri­ety of fresh foods for our cus­tomers, from farmers and ranch­ers to food pro­cess­ing fa­cil­i­ties, trans­porters, and dis­tri­bu­tion cen­ters,” a Wal­mart state­ment said.

“Blockchain sim­pli­fies the process for ev­ery­one in this sup­ply chain by al­low­ing each of us to track food from the farm to our store shelves. This trans­parency helps en­sure food is fresh and safe when our cus­tomers buy it.”

In 2017, Wal­mart ran a num­ber of pi­lots to track man­gos and pork us­ing blockchain tech­nol­ogy, and is now ex­pand­ing the tech­nol­ogy to other food prod­ucts.

In Septem­ber, the re­tailer wrote to its sup­pli­ers of leafy greens ask­ing them to trace their prod­ucts us­ing blockchain tech­nol­ogy. Sup­pli­ers are ex­pected to have the re­quired sys­tems in place be­fore the end of next year.

French re­tailer Car­refour has also in­tro­duced blockchain tech­nol­ogy to trace some of its prod­ucts, such as free-range chicken.

Each chicken’s la­bel fea­tures a QR code which con­sumers can scan us­ing their smart­phones. Con­sumers can find out where each an­i­mal was reared, the name of the farmer, what feed was used, what treat­ments were used, where the an­i­mal was slaugh­tered and so on.

Bord Bia ex­pects other re­tail­ers to fol­low in the foot­steps of Car­refour and Wal­mart.

“As re­tail­ers look for new ways of en­gag­ing with their cus­tomers and im­prov­ing the shop­ping ex­pe­ri­ence, it is likely that they will con­sider the blockchain tech­nol­ogy as part of their over­all strat­egy, es­pe­cially when in­ves­ti­gat­ing ways of pro­vid­ing greater trace­abil­ity and trans­parency,” a spokes­woman for Bord Bia said.

“At this stage it is dif­fi­cult to know what to ex­pect from the re­tail­ers in this space but pre­sum­ably they are all look­ing se­ri­ously at how they can use the tech­nol­ogy to help meet their own busi­ness and con­sumer de­mands.”

Mr Leonow­icz be­lieves that blockchain can help boost con­sumer en­gage­ment and change the shop­ping ex­pe­ri­ence for con­sumers by al­low­ing re­tail­ers to pro­vide ex­tra in­for­ma­tion about prod­ucts and ad­di­tional ser­vices, such as in­for­ma­tion on how to cook a piece of meat, for ex­am­ple.

“It’s a ques­tion of de­cid­ing how much in­for­ma­tion to give the con­sumer and how to present it,” he said.

Another key ques­tion is who will bear the cost of blockchain be­com­ing more wide­spread.

“Food sup­pli­ers are con­cerned about the cost and hav­ing to im­ple­ment it,” said All­tech’s Ai­dan Con­nolly. “There’s no ques­tion at this stage that it will be forced through in larger com­pa­nies at all lev­els in the sup­ply chain. It be­comes a cost of do­ing busi­ness.”

BE­YOND TRACE­ABIL­ITY

While the agri-in­dus­try has so far fo­cused mainly on trace­abil­ity as a use case for blockchain, Mr Con­nolly be­lieves it also of­fers other op­por­tu­ni­ties within the sec­tor.

“The great­est po­ten­tial prob­a­bly is in fi­nance, such as around pay­ment sys­tems,” he said. “Blockchain pro­vides op­por­tu­nity for a ro­bust sys­tem with less op­por­tu­nity to be cheated. For ex­am­ple, for small pro­duc­ers send­ing prod­ucts and be­ing paid.”

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