Relevance of blockchain technology for agrifood

Published on
December 20, 2017

An increasing demand in society for greater information about food reflects the need for more transparency and the lack of trust. At the same time, more and more food products and beverages are branded and accompanied by a variety of certification schemes, with an increasing risk of fraud (selling unqualified product with high-quality labels or claims) and adulteration.

Current transparency and trust systems have not been able to solve or at times even have exacerbated the problems of low transparency and trust in agrifood chains, and pose a severe threat to food safety, food quality, and sustainability. In particular, food integrity has become a major concern. Food integrity refers to the fairness and authenticity of food in food value chains both at the physical layer and the digital layer, where the digital layer should provide reliable and trustworthy information on the origin and provenance of food products in the physical layer. Blockchain technology provides a means to ensure permanence of records and potentially to facilitate the sharing of data between disparate actors in a food value chain. This potential may lead to an exciting paradigm shift facilitating transparency and trust in food chains that ensures food integrity.

The public private partnership (PPP) project ‘Blockchain for Agrifood’ aims to contribute to a better understanding of the blockchain technology (BCT) and its implications for agrifood, especially how it can impact specific aspects of supply chains and what is needed to apply BCT in agrifood chains. A second aim of this project is to conceptualise and develop a proof of concept in an application based on a use case concerning table grapes from South Africa where BCT could be applied.

The project took an agile multi-actor approach i.e. with lean and active stakeholder participation. The main focus was on obtaining hands-on experience with the development of blockchain applications in agrifood and insight into perspectives of key stakeholders.

Future research and policy recommendations

Given the rapidly increasing level of digitalisation and demand for data and product integrity, the agrifood sector is in a unique position to explore the potential of BCT. BCT can for example help value chain partners in improving transparency and efficiency of business transactions, compliance processes and tracking and tracing of food products. BCT can also help NGOs and impact investors in supporting inclusive business models. Although the application of BCT in agrifood is currently still in its infancy, it can be expected that more initiatives will be taken by various organisations. Left uncoordinated, this can result in the waste of resources and missed opportunities for businesses and society as a whole.

From a policy perspective, the following recommendations can be made:

  • Facilitate and encourage the growth of the ecosystem of blockchain-minded parties in agrifood chains;
  • Support and stimulate blockchain as part of the digitalisation strategy to improve transparency, efficiency, competitiveness and sustainability of the agrifood sector;
  • Design a clear regulatory framework for blockchain implementations;
  • Provide government investment in research and innovation so as to develop the evidence for the added value of the technology.

With special attention to:

  • Development of guidelines for proof of concept (PoC) projects and large-scale implementation;
  • Development of standards and knowledge base regarding BCT implementation;
  • Awareness raising of new governance and organisational modes implied by BCT and its implications for business and policy through knowledge dissemination;
  • Investment in ecosystem development for blockchain implementation around themes such as transparency, food integrity, and traceability in agrifood chains.