Blockchain: what does it mean for agrifood supply chains?

The benefits of blockchain

Blockchain is a distributed database that has a number of integrated features to ensure the immutability of records. Advocates claim that the application of blockchain technology will have a disruptive impact on our supply chains.

Given the importance of properly functioning food supply chains, any proposed solution for information sharing and utilisation needs to be taken seriously, meaning a new technology like blockchain must be assessed critically. Wageningen UR already has ample experience and expertise analysing and advising agrifood supply chains, combined with extensive knowledge of relevant information technology. In this project we have gained insight into what blockchains can mean for agrifood supply chains and how they fit in the overall picture.

Our approach

Blockchain has been promoted on many occasions as a promising solution for supply chain transparency, which has triggered several blockchain initiatives in the agrifood domain. Digital information exchange is an important driver for such innovation. In addition to applying new standards, smart sensors (IoT) and intelligent algorithms, blockchain can also be part of the solution. However, we need to go beyond the hype and understand the real potential of this technology (end elements thereof) for the sector. In order to gain this insight, we have formulated a number of questions. Some of the main points are:

• What do different experts mean by ‘blockchain’? It appears that considerable variation exists between different types of blockchain, each solving some issues that were already solved before by other technologies. However, even more confusion arises from the fact that the notion of blockchain has gradually obtained a much broader connotation, in the sense that the entire IT infrastructure of a supply chain is sometimes labelled as ‘blockchain’ these days.
• We have analysed different incarnations of blockchain. Each type of blockchain must be conceived as a specific combination of existing IT-mechanisms, including distributed databases, cryptographic hash, public-private keys, etc. It depends on the use case which combination, if any, fits best.
• It is crucial to have meaningful data in the blockchain. Therefore, an application of blockchain cannot be realised without considering the semantics of the data and the use of proper standards. How can this be done effectively?
• The blockchain is part of the entire IT architecture for a supply chain. How can one integrate this technology into existing systems that are already in use?

(Expected) impact of the approach

This project concludes that the interest in blockchains can generally be described as an interest in supply chain transparency. This is a promising development when we aim to create sustainable and trustworthy supply chains. Innovations in information technology can assist in taking the next steps, even if the original ideas behind blockchain may not appear to be part of the solution. A central question is how we wish to deal with trust. Other important issues are data ownership, availability and use of data standards and data quality improvement.

Next steps

A number of public-private projects will be developed to advance supply chain transparency. Some start from the assumption that blockchain is part of the solution, others start from the functional side.

Tools used

• Multichain
• BigchainDB
• OriginTrail

Cooperation with partners

• VAA
• Bionext