How to improve food safety via the supply chain with regulated blockchain

Posted by L3COS Jul 23, 2020

food supply blockchain

From farmers through manufacturers to distributors, food products go through many stages before they get into consumers’ hands. Unfortunately, along the way, the food supply chain can face issues such as diseases, illegal production, waste, unfair trading practices and more.

This may result in foods becoming unsafe to consume, and in businesses losing money. Inefficiencies in the food supply chain pose both financial and health risks.

There is one way to resolve these inefficiencies. With the transparency and traceability provided by blockchain, stakeholders have access to a platform with the potential to solve the biggest food supply chain problems and ensure food safety.

Current problems in the food supply chain

What are some of the problems faced by the stakeholders in the food supply chain?

  • Food fraud: This involves tampering and substituting food products for counterfeit products. NSF International reports that the food industry loses $49 billion annually through food fraud. Apart from financial losses to farmers and manufacturers, consumer health is also impacted by the consumption of inferior food products.
  • Illegal food production: When there’s a popular demand for a particular food product, counterfeiters will likely create substandard versions. With poor food supply transparency, it’s difficult to detect the point at which these products enter into the food supply chain.
  • Poor traceability: Today, when a consumer buys coffee, it’s almost impossible to know the origin of the beans, the production process, or other relevant details. In most cases, a consumer is just buying food and hoping for the best.
  • Foodborne diseases: Crops infected with a disease can make their consumers sick. This is a big problem for consumers around the world. According to the World Health Organization (WHO), an estimated 600 million people fall ill after eating contaminated food and 420 000 people die annually as a result of foodborne diseases. Often, it’s difficult to trace the source of these diseases due to poor tracking from farms to the consumer.
  • Food waste: Due to factors such as accidents, poor distribution, poor handling and more, huge amounts of food go to waste around the world. In fact, the Food and Agriculture Organization of the United Nations estimates that 30% of the food produced for human consumption is wasted along the food supply chain.

food lost statistics

How regulated blockchain can host a food supply chain

In light of the inefficiencies in the food supply chain, regulated blockchain can replace the current system to become the ideal, universal food supply chain.

Stakeholders such as farmers, manufacturers, distributors and consumers will have access to traceability features, which will ensure total transparency. Furthermore, regulated blockchain allows governments and relevant agencies to regulate food quality and control food supply.

A regulated blockchain works on the premise that all stakeholders have access to all relevant data on the blockchain. There is also a consensus mechanism that helps to authenticate information added to the blockchain. Once information is added to a block, it’s impossible for any party to change the information in the previous blocks, making the system immutable.

For instance, a regulated blockchain-based food supply chain starts with the farmers who cultivate crops.

Farmers will enter information about their cultivation process, fertilisers used and other processes relevant to the crop quality. From these pieces of information, manufacturers can decide whether the crops are suitable for processing.

Once a manufacturer decides to buy from the farmer, the payment is sent immediately. With the use of a smart contract (transaction protocol that automatically executes contracts based on its terms) on the blockchain, a manufacturer can set conditions on the quality and quantity of crops or livestock.

When the farmer meets these conditions, their payment is automatically triggered. As a result, foodborne diseases can be reduced in crops and livestock, which are the main source of these diseases.

Once delivered, the crops go through various production processes to become a final product. After production, the manufacturer will enter data about the production process into the blockchain.

At this point, wholesalers can see the information about the crop and manufacturing processes. This will inform the wholesalers’ decision to purchase the product.

If the wholesaler decides to buy the product, it will go through transportation. With IoT-enabled vehicles or trucks, food items can be kept safe under controlled temperature. The vehicle will send the vehicle’s temperature and real-time location to the blockchain. This will also reduce theft or food substitution during transport.

When the wholesalers receive the food products, they can add those items to their catalogue. Since wholesalers can trace the product based on the manufacturer’s or transport company’s data in the blockchain, it’s difficult for illegal food products to get into the food supply chain. A wholesaler can then onsell to both retailers and directly to consumers.

When consumers buy the food products, they can use the product ID to track the products’ journey from the farm to the store. Apart from the consumer, other parties such as the government and manufacturers have better traceability and can promote the security of and easily manage risks in the supply chain.

Since businesses might be reluctant to reveal all the information about their products to all parties on the blockchain, they can choose to reveal only the relevant information, through the product’s public ID. In case of theft or contamination, businesses can create smart contracts that will reveal more details to any subsequent investigation.

By using regulated blockchain for the food supply chain, governments can regulate the food sector more effectively. With full access to all data on the blockchain, governments can ensure that farmers, manufacturers, wholesalers and other stakeholders fully adhere to government-defined food safety rules and guidelines.

Further, farmers can improve their processes, manufacturers can increase revenue, wholesalers can gain consumers’ trust, and consumers can eat better food for better health. Overall, it’s a win for all parties.

Conclusion

The cost of an inefficient food supply chain is high for all stakeholders, including farmers, manufacturers, wholesalers and consumers. With these parties looking for a more efficient food supply chain, regulated blockchain as a platform can bring that to reality.

L3COS, the world’s first regulated blockchain, has all the features (regulation, immutability, smart contracts, public keys, high scalability) that make it extremely effective for hosting an efficient food supply chain.

Contact us today to see how L3COS’ features can host the ideal food supply chain.

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