FHA 2018 Conference: Blockchain Technology Proposed For Food Supply Chain

Friday, April 27th, 2018

The Food Manufacturing Track: Food Safety & Supply Chain conference at FHA 2018 on 25 April 2018 featured the use of blockchain technology to achieve supply chain transparency and traceability. By Grace Chew.

As the food industry shines its spotlight on food safety and regulation, traceability and transparency have become central to preventing food fraud, as well as ensuring that quality food products last through the supply chain from farm to fork.

Currently, disparate ledgers across the supply chain encourage a lack of transparency that potentially leads to vulnerabilities in terms of accountability among the various parties involved. These include the complex journey from the farm to the processors and distributors, and ultimately to retailers and consumers. Issues that arise along the food supply chain range from a compromise in food quality—especially that of fresh and perishable produce—to contamination by handlers and/or their eventual spoilage.

With blockchain technology proposed as a measure to govern shared and unalterable ledgers for recording the history of transactions, accountability and transparency across the business networks in each segment within the supply chain is encouraged.

“Block technology has an incredible application in helping businesses that want to create better sustainability and to motivate the supply chain. It also has an incredible application to provenance—ensuring that what we see on the label is actually what we are going to be eating or drinking,” says Max Kantelia, co-founder of the blockchain technology platforms, Anquan and Ziliqa.

This introduction of blockchain potentially promotes the visibility of records, creating a consensus among the parties along the supply chain while providing a permanent platform on which immutable data can be shared, replicated, and permissioned.

Along with such benefits, consumer trust increases to boost sustainability of food-producing companies. Less food wastage is suggested as another potential benefit of applying blockchain technology to the supply chain.

In the case of a breach in product quality standards, early detection of unethical industry players prevents an amplification of problems along the supply chain. More effective dispute resolution is enabled through the series of traceability.

From the perspective of end-users, the transparency afforded by blockchain technology not only ensures that fresher, safer food arrive at the table, but also provides cost-efficiency as the effects of fairer, faster payments trickle down from suppliers to consumers.

The Current Reality

While the outlook of applying this new technology to the world’s existing food supply chain appears beneficial, challenges in deploying it include the willingness among every party within the food production ecosystem to participate—a time-consuming process involving the evolution of mindsets among numerous parties.

According to Mr Kantelia, its practical application to the food supply chain lies also in the future development of this technology, where multiple blockchains are expected to exist concurrently. In such a situation, system integration is key, where compatibility among blockchains is required for these multiple platforms to work effectively with each other.

In a supply chain—typically a private or permissioned blockchain—central oversight exists where regulators are able to monitor how technology is used across the whole supply chain, but are unable to participate in it. When a problem occurs, the regulator in food hygiene, for example, is notified, and yet is unable to rectify the issue by themselves.

At the event, the audience also cited concerns regarding which party will bear the liability of such issues should the technology be implemented. Although blockchain application to the food supply chain is still in its early stages of conception, proponents of its use—such as Mr Kantelia—are taking steps forward.

Through enterprises such as Anquan, a distributed ledger platform advancing innovation in hardware-rooted cybersecurity and interoperability to mitigate the limitations inherent in the technology, the prospect for development appears promising.