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Blockchain in agriculture and food supply chain

Agriculture

While the blockchain technology gains success and proves its functionality in many cryptocurrencies, various organizations and other entities aim at harnessing its transparency and fault tolerance in order to solve problems in scenarios where numerous untrusted actors get involved in the distribution of some resource. Two important, highly relevant areas are agriculture and food supply chain. Agriculture and food supply chains are well interlinked, since the products of agriculture almost always are used as inputs in some multi-actor distributed supply chain, where the consumer is usually the final client. There is evidence that blockchain applications started to become used in the supply chain management soon after the technology appeared. Blockchain in supply chain management is expected to grow at an annual growth rate of 87% and increase from $45 million in 2018 to $3314.6 million by 2023.

As a successful example, in December 2016, the company AgriDigital executed the world’s first settlement of the sale of 23.46 tons of grain on a blockchain. Since then, over 1300 users and more than 1.6 million tons of grain has been transacted over the cloud-based system, involving $360 million in grower payments. The success of AgriDigital served as an inspiration for the potential use of this technology in the agricultural supply chain. AgriDigital is now aiming to build trusted and efficient agricultural supply chains by means of blockchain technology. As another recent example, Louis Dreyfus Co (LDC), one of the world’s biggest foodstuffs traders, teamed up with Dutch and French banks for the first agricultural commodity trade (i.e. a cargo of soybeans from the US to China) based on blockchain. According to LDC, by automatically matching data in real time, avoiding duplication and manual checks, document processing was reduced to a fifth of the time.

A simplified example of the digitization of the food supply chain, supported by blockchain technology. The Internet/Web serves as the connecting infrastructure. Every action performed along the food chain, empowered by the use of the aforementioned digital technologies, is recorded to the blockchain which serves as the immutable means to store information that is accepted by all participating parties. The information captured during each transaction is validated by the business partners of the food supply network, forming a consensus between all participants. After each block becomes validated, it is added to the chain of transactions becoming a permanent record of the entire process. At every stage of the trajectory of food different technologies are involved and different information is written to the blockchain, as described below for each of these stages:

1. Provider: Information about the crops, pesticide and fertilizers used, machinery involved etc. The transactions with the producer/farmer are recorded.
2. Producer: Information about the farm and the farming practices employed. Additional info about the crop cultivation process, weather conditions, or animals and their welfare is also possible to be added.
3. Processing: Information about the factory and its equipment, the processing methods used, batch numbers etc. The financial transactions that take place with the producers and also with the distributors are recorded too.
4. Distribution: Shipping details, trajectories followed, storage conditions (e.g. temperature, humidity), time in transit at every transport method etc. All transactions between the distributors and also with the final recipients (i.e. retailers) are written on the blockchain.
5. Retailer: Detailed information about each food item, its current quality and quantity, expiration dates, storage conditions and time spent on the shelf are listed on the chain.
6. Consumer: At the final stage, the consumer can use a mobile phone connected to the Internet/Web or a web application in order to scan a QR code associated with some food item, and see in detail all information associated with the product, from the producer and provider till the retail store.

Food security

The Food and Agriculture Organization (FAO) defines food security as the situation when “all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life”. Achieving this objective has proven to be extremely challenging under humanitarian crises related to environmental disasters, violent political and ethnic conflicts, etc. Blockchain is regarded as an opportunity for the transparent delivery of international aid, for disintermediating the process of delivery, for making records and assets verifiable and accessible and, ultimately, to respond more rapidly and efficiently in the wake of humanitarian emergencies. Examples include digital food coupons having been distributed to Palestinian refugees in the Jordan’s Azraq camp, via an Ethereum-based blockchain, where the coupons could be redeemed via biometric data. At the moment, the project is helping 100,000 refugees.

Food safety

Food safety is the condition of processing, managing and storing food in hygienic ways, in order to prevent illnesses from occurring to human population. Food safety and quality assurance have become increasingly difficult in times of growing global flows of goods. The Center for Disease Control and Prevention (CDC) claims that contamination because of food causes 48M Americans to become ill and 3000 to die every year. In 2016, Oceana performed a research on seafood fraud, showing that 20% of seafood is labeled incorrectly. Blockchain could provide an efficient solution in the urgent need for an improved traceability of food regarding its safety and transparency. Recording information about food products at every stage of the supply chain allows to ensure good hygienic conditions,identifying contaminated products, frauds and risks as early as possible. Walmart and Kroger are among the first companies to embrace blockchain and include the technology into their supply chains, working initially on case studies that focus on Chinese pork and Mexican mangoes. Early results from the studies showed that, when tracking a package of mangoes from the supermarket to the farm where they were grown, it took 6.5 days to identify the origin and the path the fruit followed with traditional methods, whereas with blockchain this information was available in just a few seconds. The integration of blockchain with Internet of Things (IoT) for real time monitoring of physical data and tracing based on the hazard analysis and critical control points system (HACCP) has recently been proposed. This is particularly critical for the maintenance of the cold-chain in the distribution logistics of spoilable food products. As an example, ZetoChain performs environmental monitoring at every link of the cold chain, based on IoT devices. Problems are identified in real-time and the parties involved are notified immediately for fast action taking. Smart contracts are harnessed to increase the safety of sales and deliveries of goods. Mobile apps can be used by consumers to scan Zeto labels on products in order to locate the product’s history.

Food integrity

Food integrity is about reliable exchange of food in the supply chain. Each actor should deliver complete details about the origin of the goods. This issue is of great concern in China, where the extremely fast growth has created serious transparency problems. Food safety and integrity can be enhanced through higher traceability. By means of blockchain, food companies can mitigate food fraud by quickly identifying and linking outbreaks back to their specific sources.

The agricultural conglomerate Cargill Inc. aims to harness blockchain to let shoppers trace their turkeys from the store to the farm that raised them. Turkeys and animal welfare are considered at a recent pilot involving blockchain. The European grocer Carrefour is using blockchain to verify standards and trace food origins in various categories, covering meat, fish, fruits, vegetables and dairy products. Downstream beer is the first company in the beer sector to use blockchain technology, revealing everything one wants to know about beer, i.e. its ingredients and brewing methods. Every aspect of this craft beer is being recorded and written to the blockchain as a guarantee of transparency and authenticity. Consumers can use their smart phones to scan the QR code on the front of the bottle and they are then taken to a website where they can find relevant information, from raw ingredients to the bottling. Concerning meat production, “Paddock to plate” is a research project aiming to track beef along the chain of production-consumption, increasing the reputation of Australia for high quality. The project uses BeefLedger as its technology platform. As another example, the e-commerce platform JD.com monitors the beef produced in inner Mongolia, distributed to different provinces of China. By scanning QR codes, one can see details about the animals involved,their nutrition, slaughtering and meat packaging dates, as well as the results of food safety tests. To guarantee to customers that its chickens are actually free-range, the Gogochicken company uses an ankle bracelet to monitor the chickens’ movements and behavior via GPS tracking, and this information is then available through the web. The aim of the company is to build trust by documenting the origins of the food. Right now, 100,000 birds have been outfitted with GPS bracelets, but the Shanghai-based company plans to incorporate about 23 million birds into project over the next three years. The Grass Roots Farmers Cooperative sells a meat subscription box, which uses blockchain technology to inform consumers in a reliable way about the raising conditions of their animals.

In the pilot performed, cases of chicken distributed in San Francisco are labeled with QR codes that link to the story of the meat they contain. Moreover, in April 2017, Intel demonstrated how Hyperledger Sawtooth, a platform for creating and managing blockchains, could facilitate traceability at the seafood supply chain. The study used sensory equipment to record information about fish location and storing conditions. Hyperledger is one of the most important initiatives, based on completeness and quality of services and tools, as well as the size of the supporting community and the significance of the members that support the overall project. Hyperledger
aims to offer complete solutions towards the business use of the blockchain, and it has been proposed in recent research efforts such as AgriBlockIoT. Hyperledger focuses to the creation of open source frameworks based on the DLT, suitable for enterprise solutions. Two of the most mature Hyperledger frameworks are named Fabric (for permissioned blockchain networks) and Sawtooth (for both permissioned and permissionless blockchain networks). These two frameworks constitute generic enterprise-grade software, offering support for various smart contract languages and they are used by a wide community of companies, developers and users. In particular, Hyperledger Fabric is backed by IBM. While Hyperledger Fabric is the most well-known and widespread, Sawtooth is the most advanced and heavyduty, allowing adequate integration with other blockchain frameworks.

In January 2018, the World Wildlife Foundation (WWF) announced the Blockchain Supply Chain Traceability Project, to eliminate illegal tuna fishing by means of blockchain. Through the project, fishermen can register their catch on the blockchain through RFID e-tagging and scanning fish. Traceability of tuna is also the focus of Balfegό. Furthermore, ripe.io has created the Blockchain of Food , which constitutes a food quality network that maps the food’s journey from production to our plate. Via the services provided by the OriginTrail company, consumers can see from which orchard the ingredients they cook have grown, the origin and growing conditions of poultry etc. Also, the project “blockchain for agri-food” developed a proof-of-concept blockchain-based application about table grapes from South Africa. A framework for greenhouse farming with enhanced security, based on blockchain technology, is proposed in. Nestle has recently entered the IBM Food Trust partnership towards food traceability, with a pilot based on canned pumpkin and mango. Some research initiatives proposed the combination of blockchain with other technologies (i.e. IoT, RFID, NFC), in order to increase food traceability. A system based on combining RFID and blockchain technologies is discussed in while a system based on IoT devices and smart contracts is proposed in. Finally, the blockchain technology is also being assessed to trace the production of non-edible crops that are also very sensitive to integrity issues because of regulation and legal aspects. Experiment with an implementation of blockchain for the electronic traceability of wood from standing tree to final user, based on RFID sensors and open source technology. Canada is currently developing a permissioned blockchain network for the tracking of the cannabis supply chain. By tracking the cannabis chain, Health Canada aims to enforce regulations more easily.

Small farmers support

Small cooperatives of farmers is a way to raise competitiveness in developing countries. Via cooperatives, individual farmers are able to win a bigger share of the value of the crops they are cultivating. FarmShare aims to create new forms of ownership of property, cooperation of communities and self sufficient local economies. It constitutes an evolution of the community-supported agriculture model, taking advantage of the blockchain’s potential for distributed consensus, token-based equity shares and automated governance in order to foster greater community engagement while removing some of the managerial burdens. AgriLedger uses distributed crypto-ledger to increase trust among small cooperatives in Africa. OlivaCoin is a B2B platform for trade of olive oil, supporting the olive oil market, in order to reduce overall financial costs, increase transparency and gain easier access to global markets. Further, some startups support small farmers by offering tools that increase the traceability of goods, such as Provenance, Arc-Net, Bart. Digital and Bext360. As a recent example, the Soil Association Certification has teamed up with Provenance to pilot technology which tracks the journey of organic food.

We note here that even medium-size farmers could benefit from blockchain and the aforementioned initiatives, as they form a clearly different category than the large corporations. Cooperatives, on the other hand, might be formed by either small or medium-size farmers, and can become quite large entities representing tens or hundreds of farmers. Blockchain could be very useful for such cooperatives, because the transparency of information involved could help to solve disputes and conflicts among the farmers in a fairer way for everyone. An example of how blockchain technology could be used for an automatic transaction between a cooperative of farmers (i.e. producers) and a distributor/retailer, via the use of smart contracts. Blockchain could also facilitate insurance programs for securing farmers (i.e. members of the cooperatives) against unpredicted weather conditions that affect their crops or other risks such as natural disasters. The idea behind the ARBOL project is via customized agreements, farmers can receive payments for droughts, floods, or other adverse weather outcomes that negatively affect their crop.

Waste reduction and environmental awareness

Various waste management initiatives have incorporated blockchain technology. Worth mentioning is the Plastic Bank, a global recycling venture founded in Canada to reduce plastic waste in developing countries – so far Haiti, Peru and Colombia, with plans to extend this year to Indonesia and Philippines. The initiative rewards people who bring plastic rubbish to bank recycling centres, and this reward is provided via blockchain-secured digital tokens. With these tokens, people can purchase things like food or phone-charging units in any store, using the Plastic Bank app. The Plastic Bank initiative seems to be successful till date, with more than one million participants, more than 2000 collector units and three million kilograms of plastic collected in Haiti since 2014. A company with a mission similar to Plastic Bank is the Agora Tech Lab, aiming to promote circular economy initiatives by rewarding responsible behavior. Another example of the use of blockchain technology is emerging in railway stations. Waste management in French stations has traditionally been chaotic, with hundreds of tones of waste produced each year.

A system developed by SNCF subsidiary Arep uses blockchain to allow detailed information to be collected, using Bluetooth to continually update on quantities of each type of waste, which waste managers collected it and how it is being moved around. Blockchain is used to record any actions taken and the overall collection process. Other commercial solutions using blockchain to improve recycling and sorting of waste produced along the food chain include Recereum. Finally, blockchain can help to raise awareness about the environmental characteristics of the food produced. A crucial problem here is the degradation of land, soil and water where food is being produced. In particular, the quality of soil is important towards the realization of the United Nations Sustainable Development Goals(SDG). In this context, the sustainable development, proper management and rational use of agricultural fields, water resources and soils is of utmost importance. Tracing this information via the supply chain, making it visible to the public, is essential for putting public pressure to producers and policy-makers on the aspect of how the food is produced in a sustainable manner.

Supervision and management

Blockchain technology can also be harnessed as a credit evaluation system to strengthen the effectiveness of supervision and management in the food supply chain. It can also be used to improve the monitoring of international agreements relevant to agriculture, such as World Trade Organization agreements and the Paris Agreement on Climate Change. The authors in have developed a system, based on the Hyperledger blockchain, which gathers credit evaluation text from traders by smart contracts on the blockchain. Traders’ credit can then be used as a reference for regulators, to assess their credibility. By applying blockchain, traders can be held accountable for their actions in the process of transaction and credit evaluation by the regulators. As another example, AgriBlockIoT is a fully decentralized, blockchain-based solution for agri-food supply chain management , able to seamless integrate IoT devices producing and consuming digital data along the chain. A similar research effort, combining IoT sensors and cloud technologies was proposed in, targeting the management of a grape farm near the City of Skopje, North Macedonia. Blockchain-based contracts can also mitigate the exploitation of labour in agriculture, protecting workers with temporary agreements and employment relationships in the agricultural sector. When labour agreements become part of the blockchain, it is easier for the authorities to control fairness in payments and also taxation. Coca-Cola has attempted to employ blockchain to sniff out forced labor in the sugarcane sector.

Quality measurement and monitoring are also relative aspects, where quality assurance is defined as the avoidance of failures such as delays to final destinations, poor monitoring, and frauds, as well as the assurance that the quality of the products (e.g. crops, meat, dairy) is maintained good along the transfer through the food chain, i.e. good storing conditions, no contamination or impurities etc. Several properties defining a good quality of grains are listed in. The preliminary results in support a potential demand for a blockchain based certification, which would lead to an added valuation of its selling price around 15% for genetically modified (GM)-free soy in the scope of a business network for grain exports in Brazil. This added valuation would be the outcome of more reliable and efficient quality assurance process on the grains, facilitated by blockchain. Blockchain was also used to record events taking place in the rice value chain, ensuring the security and quality of rice in the transportation process. Finally, blockchain could be used to manage common resources such as energy and water, prevent speculation in the trading of these resources.

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