Legal: Blockchain: the saviour of the food supply chain?

Legal: Blockchain: the saviour of the food supply chain?

Many industries have attempted to retrofit blockchain as a solution to an existing process or problem. This is a logical move – making the most of a new technological solution can help improve efficiencies and reduce costs. It is common for a new technology created in one industry to spread across other industries as organisations seek to maximise the benefit to them.

However, some organisations have tried to apply a blockchain solution to problems that can be solved by existing software solutions. Others have even tried to find new problems that did not exist before, purely to sell their niche blockchain solution.

At a very basic level, blockchain is a means of storing data. A blockchain utilises distributed ledger technology (‘DLT’) to record the transfer of data between users within a peer-to-peer network (so there is no need for a third party intermediary to keep the records). Each blockchain will be subject to the rules stipulated by its developer; for example, the blockchain could be subject to permissions on who can access and edit it. Every member of the network keeps a copy of the data ledger. It is prized for its immutability as, once data has been added to a blockchain, it cannot easily be altered or removed. A common misconception is that data added to a blockchain is permanent and cannot be altered or removed, although this can be very difficult in large public blockchains.

What does this mean for food supply chains? Each member of a given supply chain could be a participant in a blockchain network through which they could share important information about the products within that supply chain. Taking the example of a crate of fruit, the information recorded could demonstrate where that fruit was grown and the precise date and time at which it passes from each member of the chain.

The accuracy and immutability of blockchain should allow suppliers, and therefore retailers, to more easily audit and more confidently guarantee their supply chain. This can be done for purposes such as regulatory compliance, as well as demonstrating freshness or even their commitment to sustainability, ethical farming and environmental protection.

The maintenance of accurate and immutable data sets allows each party to be certain who was in control of a product at any given time. This enables quicker resolution of investigations into reported issues (for example, where produce falls below expected standards) and the swift apportionment of liability between the offending parties.

A potential hurdle is the issue of cost: at its heart blockchain is a software solution, and software development can require significant investment (of both financial resources and management time). Getting buy-in for projects of such scale and significance can prove difficult.

The key advantages of blockchain technology – immutability, accuracy and data sharing – make it ideal for solving some of a food supply chain’s biggest challenges. Nestlé is piloting a blockchain platform to track sustainability and supply chain data – evidence that the big players are looking at blockchain in detail. However, blockchain continues to be a poorly understood concept and the benefit of using it rather than existing software solutions is not always clear or well-articulated.

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