Food Fraud; a Rising Concern
Recently, Tesco has been under fire for granting fictional farm names to a new line of products, in order to attract demand and reassure buyers. On the other end of the spectrum, the 2013 horsemeat scandal is still prominent in the minds of many. According to the World Health Organisation, 1 in 10 people become ill every year from eating contaminated food, with 420,000 dying as a result. From fake eggs to plastic rice, to labels providing the wrong country of origin or falsifying its ethicality, food fraud is still very much a daily problem. So how can one possibly tackle this issue, without a lab at hand? The answer is simple — blockchain.
Fairtrade
The Fairtrade Foundation is a UK-based charity that works to empower disadvantaged producers in developing countries. It provides certification of the trade chain for products by having companies pay premiums for produce, rather than the minimum price. However, even with certification premiums, farmers are caught in a poverty trap — in the cocoa industry, they can only produce 30–40% of what they could otherwise, due to a lack of knowledge and equipment. This leads to 2.3 million children working on cocoa farms in Ghana and Ivory Coast, with about 90% of them working under illegal and dangerous conditions. In addition, a 2015 study by the MIT Press concluded that producer benefits were close to zero because of an oversupply of certification. The fair trade standards are not always enforced, with producers, cooperatives, importers, and packers evading them and profiting. This occurs as, according to Christian Jacquiau in his novel ‘Les Coulisses du Commerce Équitable’, there are only 54 inspectors around the world, working on a part-time basis. In sharp contrast, there are more than a million producers. To make matters worse, these checks take place in offices, hotel rooms, or by fax — allowing a large amount of room for evaders to take advantage of. Furthermore, the Fair Trade marketing system allows for corruption, such as the false labelling of coffee as Fairtrade by retailers or importers paying exporters less than the Fairtrade price. Farmers often do not get their deserved pay and fraudsters profit from higher prices that Fair Trade goods can demand.
A Solution?
Tony’s Chocolonely, a popular Dutch chocolate brand, has made it its mission to have 100% slave-free chocolate. To do so, it utilised technology to create a platform to allow for traceability in their cocoa supply chain. In 2015, it established Beantracker, a platform that utilised different technology, that allowed partners to monitor the flow of beans from Africa to Europe and provided access to such information. In 2017, it incorporated blockchain technology by creating a pilot with Accenture, where they registered 3 flows on the blockchain:
- A cooperative collecting beans and entering their data.
- A local trader buying cocoa beans and transporting them to port.
- An international trader buying those beans and exporting them to Europe.
The pilot began on the 4th of January 2018 and ended on the 15th of February. 400 transactions were recorded, with 900k beans registered. While generally successful, some minor glitches were encountered. A huge challenge was to move the data from the physical world onto the digital platform, especially as blockchain was originally created for bitcoins. Nonetheless, the successful use of such technology proves that blockchain can be utilised to monitor the fairness of the supply chain, and ensure that farmers receive their promised price while avoiding potential corruption. Furthermore, as consumers now have access to the origin and other details of the chocolate, they can be reassured that their Fairtrade chocolate is truly Fairtrade.
In addition, Fairtrade cooperatives obtain loans, called Agriculture/Trade Finance, to cover their costs, which they pay back after selling their produce. However, interest rates are often steep — which can sometimes result in cooperatives not paying back the loan. This issue could be tackled by setting up ‘smart contracts,’ where payments automatically occur when the product is shipped — allowing for more trust and loans to be accessed with more ease, hence improving supply and the livelihoods of farmers.
Authentic Beef
Global demand for beef is ever increasing; global production reached 63m tonnes in 2018, which amounted to 25% of global land use. Beef accounted for a fifth of Ireland’s €12.6bn food and drinks exports in 2017, with the UK being its primary destination. By utilising blockchain, one can track the origin of meat and ensure its authenticity. Using such technology would allow partners, retailers, and consumers to obtain information on the animal’s breed, sire, gender, weight, details on its vaccinations, whether it was given growth hormones, and its rate of growth over time. Information on its feed, the location of the farms, previous owners, and the date it was slaughtered and processed could also be obtained. This would allow the retailer and consumer to determine whether their beef is ethical, in regards to its bringing up and the land it was raised on, preventing one from buying from farmers who illegally raise cattle on deforested rainforest land. Furthermore, it would prevent the addition of meat from other animals, such as horses, as each stage of production would be recorded. Customers could access this information using QR codes on the packaging, further solidifying public trust. This would also allow for easier customer feedback, where reviews can be added to the blockchain without being altered, ensuring businesses can stay competitive and improve. These points are further emphasised in Deloitte’s new report; Beefing up Blockchain.
“The Restaurant Association of Ireland believe blockchain traceability is the way of the future. It gives assurance to the customer and the business owner. You can trace the ingredients of the dish right back to the animal in the field, farm to fork.” — Adrian Cummins, CEO of the Restaurants Association of Ireland
Beefchain is a US-based start-up that aims to create a “rancher-centric” supply chain to benefit ranchers, who are currently price-takers and often struggle to make a profit. By utilising blockchain, it aims to enhance traceability and prove human handling. Currently, it has hashed more than 1,600 calves using the Ethereum blockchain, from six ranches in Wyoming. This allows for lower supply chain costs, as the cumbersome paper trail will be removed, and allows for a transparent process which enhances customer trust and experience, whilst negating any future meat scandals!
The Possibilities are Endless
Blockchain can be applied to more sectors of the food and drink industry than imagined, allowing for accurate and trustworthy information to be obtained and understood by retailers and consumers. Any attempts to tamper with an item as it moves through the supply chain can be easily identified and prevented. In addition, if a potentially hazardous food item does make it to the retailer, the dangerous items can be identified and removed, preventing expensive batch recalls, such as the 2005 food dye scare. By utilising blockchain, food trust can be regained and consumer confidence ensured.
