Blockchain's Impact on Food and Farming, Explained

There have been several in recent years… how long have you got?

In 2018, a deadly E. coli outbreak was connected to romaine lettuce that was grown in Arizona. The outbreak affected 35 states across the U.S., with five people dying and a total of almost 200 cases reported.

In 2013, a horsemeat scandal gripped Europe — and products advertised as beef were actually found to contain… yep, you guessed it, horse. It made its way into some of the continent’s biggest supermarkets. They blamed their suppliers, who in turn blamed their suppliers. The furore shook confidence and left some people refusing to buy meat all together.

Blockchain could play a big role in clamping down on food fraud because every component in a finished product would become easier to identify — speeding up recalls and also allowing consumers to find information they can trust about an item, seconds after picking it up off the shelf.

Smart agriculture solutions — which boost productivity and address food demand — are thriving, and it is predicted that this industry could be worth up to $26.76 billion by 2020.

Farmers who are already using blockchain describe it as a “game changer, just like the internet.” For example, one meat company says the seemingly insignificant statistics blockchain provides, such as when pigs arrive at a factory, can have a massive effect on the final product they deliver to customers. They show blockchain results in a “detailed passport” where consumers can be assured that the meat they are consuming met strict hygiene and well-being standards — with any issues arising in the production process being identified in as little as 30 seconds.

Meanwhile, the government of Kerala is planning to introduce blockchain in the grocery supply process, with the hope of ensuring that the system will be used whenever food is being delivered to stores across the country. It is hoped this will help deliver products to millions of people on a daily basis more efficiently, as well as provide a form of “crop insurance” to ensure that farmers can be compensated quickly whenever unforeseen circumstances affect their yield.

Certification of fruit and vegetables could also be enhanced through blockchain — ensuring that information isn’t lost and streamlining the manpower needed to confirm a product’s provenance. Every shipment of fruit and vegetables is accompanied by paper certificates showing where the food has come from, validating its quality and declaring it free of disease. In Belgium, work has begun to digitize some of these certificates so they are placed on a blockchain instead.

Blockchain could eliminate paper-based processes and cut costs, with these savings passed on to you.

Getting rid of middlemen would minimize transaction fees, and decentralization would also make it easier for smaller farms to compete with larger corporations.

For example, blockchain concepts such as PavoCoin are entering the fray — giving smaller farmers access to attainable financial services, such as the ability to pre-sell crops via smart contracts, helping them to improve the quality and quantity of their harvests, and providing consumers with greater amounts of information about the food they are buying. The company says, farmers in Stockton and in Dixon, California, have recently started using the system. A third installation is planned in Merced soon.

Optimizing farming would empower farmers of all scales with the information, resources and security they need to have higher yields, more lucrative crops. This would drive prices down for the average consumer and increase accessibility to higher quality goods. Higher yields also pump more money into the agricultural ecosystem, increasing the availability of farmed goods.

On the contrary, smart contracts could ensure they are paid fairly for their hard work without delay — and smaller farms would have a larger market for selling their fresh produce.

Blockchain empowerment has the potential to shift farmers, who do the hardest work, from being price takers to price setters, forcing downstream cost reductions.

Blockchain would also allow premium brands to stand out from the crowd — and justify why their free range or organic produce is worth the extra money. This is because the provenance of their goods can be easily traced, giving consumers confidence that they are getting added value from a high-end product.

The agricultural sector would also find it easier to figure out how much their crops are worth by comparing the money being offered by a distributor to the sums paid to their rivals in earlier purchases, giving all farmers the opportunity to earn the money they deserve.

Inefficiencies in the supply chain can often mean delays before produce is ready for sale, but automated processes through blockchain could speed things along nicely.

There could also be less chance of food going to waste because agricultural businesses and retailers would be able to gauge the demand for certain products and adjust supply accordingly. This spare capacity can then be devoted to other crops — eliminating food waste.

Blockchain’s ability to tackle food waste, and the power that smart contracts can have in ensuring farmers get paid fairly and don’t go out of business, could help the world cater to rising levels of demand — helping eradicate food safety issues, poverty and political instability.