Blockchain in Food Safety and Quality Assurance - II

Why Blockchain?

The World Health Organization estimates that almost 1 in 10 people become ill every year from eating contaminated food, with 420,000 dying as a result, because the global food supply has grown so complex that it has become almost impossible for food producers and retailers to guarantee the provenance of their products. However in any industry there are opportunities that will inevitably be those who take advantage. Individuals tampering with foods are nothing new, even in the 17th Century fraudsters would water down milk and add chalk to bread in order to squeeze out as much profit as possible. While technology may have improved in the 21st Century, similar methods used in food industry today give the same phrase “you are what you eat” an unsettling connotation. According to Racheal Botsman, it all begins with a progression in our understanding of trust, where consumers are beginning to move from an institutional system of trust to a distributed system, a natural progression in consumer’s eye since institutional trust is not designed for the digital age. One such example of a distributed trust system is the technology underpinning which has huge potential for the food industry, the blockchain.

The blockchain was developed as a decentralized ledger which records transactions and stores this information on a global network in a manner which prevents it being changed at a future point. While initially adopted for it’s financial implications, the blockchains’ decentralized system has huge potential for the traceability of supply chains where blockchain provides a neutral open platform, which needs no third party to authorize transactions, but rather a set of rules all participants, both users and the operators of the system, must abide by. Such a system is invaluable in complex supply chains were trust is low and compliance difficult to assess. Blockchain technology is a way of storing and sharing information across a network of users in an open virtual space, where technology allows for its users to look at all transactions simultaneously and in real-time. For example, a retailer would know with whom his supplier has had dealings regards to a specific food product he sold to any specific consumer and it is fraud free since transactions are not stored in any single location, which is almost impossible to hack the information. Thus, blockchain technology can make a difference for consumer confidence. The technology is so simple that, by reading a simple QR code with a smartphone, data such as an animal’s date of birth, use of antibiotics, vaccinations, and location where the livestock was harvested can easily be conveyed to the consumer.

Food Safety

Blockchain makes a supply chain more transparent at an all-new level, which also empowers the entire chain to be more responsive to any food safety disasters. That is one of the reasons where massive multinational corporations such as Nestlé, Unilever, Walmart, Tesco etc., are considering blockchain technologies for that reason. Walmart, which sells 20 per cent of all food in the U.S., has just completed two blockchain pilot projects. Prior to using blockchain, Walmart conducted a trace back test on mangoes in one of its stores. It took six days, 18 hours, and 26 minutes to trace mangoes back to its original farm, but by using blockchain, Walmart can provide all the information the consumer wants in 2.2 seconds. This is really important because during an outbreak of disease or contamination, six days is an eternity, where company can save thousands of lives by using blockchain technologies. Blockchain also allows specific products to be traced at any given time, which would help to reduce food waste. For instance, contaminated products can be traced easily and quickly, while safe foods would remain on the shelves and not be sent to landfills.

Fraud Prevention

However, the blockchain will work only if the data provided at the source is accurate, as current practices in the industry are much more open to human error, where most of the compliance data is audited by trusted third parties and stored either on paper or in a centralized database. These databases are highly vulnerable to informational inaccuracies, hacking, high operating costs, and intentional errors motivated by corruption and fraudulent behaviour, in which blockchain operates anonymously, so mistakes would be traceable to individual culprits. Considering recent food-fraud scandals in many parts of the world, this feature is not trivial where blockchain technology provides a method with records that are kept permanently which facilitates data-sharing between disparate actors in a food supply chain. In past and present, many retailers have sold fraudulent food products unknowingly, where those days could come to an end with the use of blockchain technology.

On-time Payments

Blockchain will allow everyone to be paid more quickly, from farm to plate, where farmers could sell more quickly, and be properly compensated as market data would be readily available and validated. Blockchain technology could represent a legitimate option for farmers who feel compelled to rely on marketing boards to sell their commodities. The use of blockchain could prevent price coercion and retroactive payments, both of which are obvious across the food supply chain. Blockchain technologies could expedite the agri-food sector by eliminating middlemen and lowering transaction fees, which can lead to fairer pricing and even help smaller scale manufacturers or producers to get more market attention.

Advantages of Blockchains

Smart contract enforces contractual terms and accountability among parties involved.

Efficiencies resulting from distributed leger technology (DLT) can add up to some serious cost savings, because DLT systems make it possible for businesses and banks to streamline internal operations, dramatically reducing the expense, mistakes, and delays caused by traditional methods for reconciliation of records. 
The widespread adoption of DLT will bring enormous cost savings in three areas. Electronic ledgers are much cheaper to maintain than traditional accounting systems, because the employee headcount in back offices can be greatly reduced. Nearly fully automated DLT systems result in far fewer errors and the elimination of repetitive confirmation steps. Minimizing the processing delay also means less capital being held against the risks of pending transactions.

In addition, some smaller number of millions will be saved by shrinking the amount of capital that broker/dealers are required to put up to back unsettled, outstanding trades. Greater transparency and ease of auditing should lead to savings in anti-money laundering regulatory compliance costs, too.

Blockchain's removal of almost all human involvement in processing is particularly beneficial in cross-border trades, which usually take much longer because of time-zone issues and the fact that all parties must confirm payment processing.

Blockchain systems can set up smart contracts or payments triggered when certain conditions are met.

Creates an audit trail of transactions from farmers and food processing firms to consumers.

Provide transparency and visibility in the farming, handling and distribution process.

Collect previously untapped data to carry out analytics to improve farming methods.

Barriers to Blockchain

The roadblocks to DLT today are not just technical, since real challenge is politics, regulatory approval, and the many thousands of hours of custom software design and front and back-end programming still required to link up the new blockchain ledgers to current business networks.

Nonetheless, DLT must interface with other parts of the operational processes seamlessly.

Blockchain should enable more rapid setup, training, and reduce problem resolution time, while achieving efficiency gains which must be easy enough/cheap enough for all parties involved to grasp and leverage.

Security is still remains as concern, since several central banks, including the Federal Reserve, the Bank of Canada and the Bank of England, have launched investigations into digital currencies to find the ability to control its currency and secure the system against systemic attack.

Banks are not interested in an open-source model for identity. Both banks and regulators want to maintain close control. The development of a single digital identity passport authorizer is a critical next step.

Regulation is also critical in creating an open digital environment for commerce and financial transactions. Current physical certificates must be digitized to gain the full benefits of a fully electronic system.

Like any other transformative technology, there are barriers to overcome, where blockchain to be effective, it needs to be accessible to all the players in the food supply chain from beginning to end. 

The cost of data entry needs to be low to make the use of blockchain accessible for all food workers, even in disadvantaged areas.

The farm workers will need to routinely use smart phones/tablets and access the internet to be able to input the data, where these practices are familiar to farmers who use precision agriculture, but all the famers including rural farmers worldwide would need to adopt the use of technology for blockchain to be successful. 

Blockchain in Food Safety and Quality Assurance

Food Safety and Blockchain

The globalization of food production and trade has opened up access to food and increased consumer options, while making the food supply chain longer and more complex. The consumers’ dream of tracking the journey from farm to fork in the perspective of quality and food safety have become less transparent. Even through growers, suppliers and retailers are fully committed to implementing strong food safety measures, increasing lack of transparency can make it difficult to quickly diagnose and address issues, including initiating recalls if they are needed. Nonetheless, it can be difficult to locate the cause of a problem because participants in the food supply chain usually keep their own records (some in more detail than others) and are only required as to the legislations at most to share “one step up, one step down” where these records are frequently paper-based and vulnerable to inaccurate updating. Thus, in an occurrence of an issue, inadequate track and trace capabilities may cause investigation delays that can be costly of deadly. If an origination point can’t be identified, a particular type of food could be completely banned from store shelves when only a single batch was affected and needed to be pulled. Regulators, growers, processors, distributors, suppliers, retailers and consumers would all benefit if delay and waste could be reduced.

Solving the challenges in the food industry will require participants in the food supply chain to work together. If farm origination details, batch numbers, processing data, expiration dates and shipping details can be digitally recorded on blockchain, it may become possible to verify the history, location and status of a food product. This end-to-end traceability would improve transparency and efficiency throughout the food supply chain. Fortunately the blockchain is already beginning to improve the amount of collaboration, trust and transparency across the food industry as a solution to such issues, and it is believed that over time it will increase the traceability and safety of food products. Food is a huge, multi-trillion-dollar industry, where implementing a blockchain-based food safety system across the industry will not happen in a single day, but it may change the food industry faster than you might expect. Hence, focusing on shared value and leveraging insight from collaborators to address different types of needs among various constituents, we can drive adoption to reach critical mass.

What is Blockchain?

Blockchain is a shared immutable ledger for recording the history of transactions which is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a cryptographic hash of the previous block a timestamp and transaction data. By design, a blockchain is inherently resistant to modification of the data. It is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way". For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.

Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been achieved with a blockchain. This makes blockchains potentially suitable for the recording of events, medical records and other records management activities, such as identity management, transaction processing, documenting provenance, food traceability or voting. Blockchain was invented by Satoshi Nakamoto in 2008 for use in the crypto currency bitcoin, as its public transaction ledger. The invention of the blockchain for bitcoin made it the first digital currency to solve the double spending problem without the need of a trusted authority or central server. The bitcoin design has been the inspiration for other applications.

Blockchain Mechanism

To start, here’s the simplest explanation with no metaphors or hyperbole. In the language of cryptocurrency, a block is a record of new transactions which means the location of cryptocurrency, or medical data, or even voting records. Once each block is completed it’s added to the chain, creating a chain of blocks: a blockchain because cryptocurrencies are encrypted, processing any transactions means solving complicated math problems whereas these problems become more difficult over time as the blockchain grows. Hence, people who solve these equations are rewarded with cryptocurrency in a process called “mining.”

As to the technical explanations, the blockchain technology, private key cryptography provides a powerful ownership tool that fulfills authentication requirements where possession of a private key is ownership. It also spares a person from having to share more personal information than they would need to for an exchange, leaving them exposed to hackers. Authentication is not enough. Authorization needs a distributed, peer-to-peer network as a starting point where a distributed network reduces the risk of centralized corruption or failure and such distributed network must also be committed to the transaction network's recordkeeping and security. Authorizing transactions is a result of the entire network applying the rules upon which it was designed.

Authentication and authorization supplied in this way allow for interactions in the digital world without relying on (expensive) trust. Today, entrepreneurs in industries around the world have woken up to the implications of this development, because with blockchain unimagined, new and powerful digital relationships are possible. Due to these reasons the blockchain technology is often described as the backbone for a transaction layer for the Internet, the foundation of the Internet of Value. In fact, the idea that cryptographic keys and shared ledgers can incentivize users to secure and more formalize digital relationships that has imaginations running wild where everyone from governments to IT firms to banks is seeking to build this transaction layer.

Blockchain in Food Supply Chain

In the food supply chain, numerous types of food (i.e. imported foodstuffs) can exchange hands 10 times or more between the food’s place of origin and the end point. Current food regulations requires each step in the supply chain to have a record of the data for one step forward and one step back in the supply chain, which are useful  information but it can often make it difficult to ensure accurate and reliable records throughout the entire chain because it doesn’t capture the entire process. Whereas food blockchains actually applying cryptographic technology that can be used to monitor and track various foods in the supply chain. It includes gathering data from “farm to fork” or “gate to plate” where, all the steps necessary to produce and sell all the foods we enjoy. This new technology can help in food recalls, identifying potential introduction of foodborne illness-causing bacteria, viruses or chemicals, and it can also help the battle against food waste. Blockchain technology digitizes food data and allows the information to be held by more than one person or party, where no more paper logs or hand-written records. With the implementation of blockchain, all the data is put into electronic form and is accessible by computers, smartphones and tablets.

Furthermore, blockchain may be able to effectively trace and destroy the contaminated foods that often lead to food borne illness outbreaks, whereas the current practices lead to excess food waste. Currently in the case of an outbreak, we try to isolate the exact field and lot number that might be causing illness. Additionally, all the food that might be contaminated has to be pulled from shelves or recalled. For example, a retailer becomes aware of an issue with some of the vegetables on its shelves. If the condition of that vegetable was digitally recorded on the blockchain during its journey from farm to fork, network participants could view the entire history of that vegetable to quickly triangulate on the root of the problem. If necessary, a selective recall of that vegetable from that specific batch could then be executed in an efficient manner. In fact, when a farmer grow cucumbers and if they end up as an ingredient in a deli salad, all the information on where or how this cucumber was grown, who transported it, and how it ended up at your favorite deli all will be stored and quickly accessible. The cucumber data will be held in a permanent ledger that cannot be altered, making it extremely secure. In many current food production information systems, data is shared with a centralized source, and that one source owns all the data, where blockchain can be used to distributes data to many sources, allowing ownership of the information to spread wider. Hence, data builds up like stacking building blocks each time a “block of information” is added to the information record about the specific food item, the chain grows, and the blockchain will contain all the previous data along with the new information. Consequently, blockchain technology can aid in tracking food sources in cases of foodborne illnesses, detecting food fraud and limiting food waste. But another “blockbuster” ability for blockchain is how much it will support food supply transparency for consumers, where future of blockchain includes making the digital data on foods accessible to consumers. With this type of information at consumers’ fingertips, they could know everything about a grocery store apple from orchard to shopping cart.