Blockchain can end the food fraud crisis, but it’s expensive.
Food fraud is a risk of $ 50 billion in the global food industry every year and is in danger of public health. Strictly and realistically deployed, the blockchain can prevent this shadow crime.
problem? It comes with a high price tag. Expansion, costs, interoperability and integration provide significant barriers. Not to mention the privacy problem, regulatory uncertainty, and the long way of adopting stakeholders.
But food fraud does not go anywhere. David Carvalho, CEO of the NAORIS protocol, observed:
“Most people will be surprised to hear that food fraud is a problem. But every year, the world’s food industry has a lot of expenses between $ 30 billion and $ 50 billion every year. It is the same as GDP in small countries such as Malta.”
So, what should I do? And how can block chain implementation be truly achieved?
Food fraud is deeper than we know
Food and Agiculture Organization (FAO) briefly explains that it includes intentionally deceiving customers about the quality or content of food purchased by food fraud.
In essence, it is the intentional replacement, addition or removal of materials for economic benefits.
The types of morale are diverse and sophisticated. This includes misunderstandings, theft, forgery and dilution.
There are many real cases. Melamine has been added to China’s milk to counterfeit protein content. Horsemeat was sold as beef in Europe. Olive oil is often diluted with cheap vegetable oils.
Economic tolls are huge. However, the actual cost is much higher when describing reputation damage, regulatory compliance, legal battle and consumer loyalty erosion.
In some cases, human costs can be much more deadly. China’s 2008 Melamine Scandal has more than 300,000 infants.
Temujin Louie, CEO of Wanchain, emphasized a vicious cycle made of food fraud.
“The fraudulent incident causes health to erose consumer trust. This decrease in trust can be harmful to legitimate businesses due to a decrease in sales of related brands and wider product categories.”
Damage is not calculated by the sum of individual losses. It must be calculated by the systematic weakening of the Food Industry Foundation.
The cracks of the supply chain will be sprayed with food fraud.
The complexity and opacity of the global supply chain creates fertile evidence for fraud. Cold chain is particularly vulnerable.
Corruption can occur due to the failure of cold chain logistics. Because of this failure, a con artist can false storage conditions or sell damaged products freshly.
Fraud is not limited to famous events or luxury products. Dairy, spices, seafood, organic products, honey and fruit juice are frequent.
Carvalho added that the fragmented data system is the heel of the main Achilles.
“Many companies maintain their own internal tracking systems, but they lack interoperability with suppliers and customers. This makes the information system from the overall loan of the supply chain and prevent the end -to -end perspective.”
Fraudulent products go by entering and entering an unknowing system without sharing and reliable data.
Blockchain is bite
Blockchain technology can act as a demonstration of this growth crisis. But Louie warned that attempts on blockchain -based accounting had challenges.
“After more than 10 years since Ether Lee began, we haven’t seen true confusion yet.” One of the reasons why the promise of the blockchain is not greatly met in the supply chain is that early adopters were guilty of excessively simplifying the problem. “
The key principles of blockchain technology can create a more transparent and reliable system. Deviling prevents a single entity from controlling the data. An immutability ensures that once the data is recorded, it cannot be changed or deleted.
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The benefits do not end there. Selective transparency allows you to share related information with certified stakeholders without exposing sensitive commercial data. Meanwhile, smart contracts can automate processes and implement contracts.
Ultimately, encryption guarantees the integrity and security of the ledger. Moreover, in order to take this more, if the Internet sensor is integrated with the blockchain, an immutable audit trail for important environmental conditions for cold chain integrity is created.
The actual implementation began to bear fruit. Walmart works with IBM to track Chinese pork and American mangoes using the Hyperledger Fabric to reduce the trace time in a few days. Te-Food and Provenance provides blockchain-based tracking solutions that improve food safety and transparency. Major food companies such as Nestlé and Carrefour and platforms such as Seafood Souq are exploring blockchains to improve supply chain transparency.
Louie emphasized a paradigm shift.
“The traditional food supply chain worked on a model that trusts intermediaries that depend on the words of various actors along paper documents, third -party certifications and chains. It moves to the system based on the contrasting data that is contrasted.”
Carvalho explained the inhibitory effect.
“The well -implemented blockchain system can play a strong suppression role as the increase in visibility and audit becomes more dangerous and more likely to be exposed.”
Distributed transactions
Despite the promise, the blockchain is not a panacea. Expansion, cost, interoperability and integration with the legacy system provides a big barrier for adoption.
The “garbage, garbage” problem is still a basic limit. Blockchains can only guarantee the integrity of the data, but they are not responsible for the accuracy of the data in the chain.
Oracles and IoT devices that supply external data to the blockchain are vulnerable to modulation and technical failures. Manual data input is also vulnerable to errors or operation. The perfect tracking record does not prevent the compromised Oracle from supplying false data, or the crashing party does not prevent the input of fraudulent details from the country of origin.
Privacy issues, regulatory uncertainty and stakeholders adopt additional obstacles. Food supply chains include sensitive data that companies are reluctant to expose.
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Licensed blockchains and optional transparency provide solutions. But they require careful governance and clear data access protocols. Regulatory frameworks are developing, and extensive stakeholders are essential for success.
Louie advocates practical approaches. Louie said, “The blockchain starts with a clearly defined use of use rather than a wide range of and unpoped implementation.” Especially the powerful governance model of the consortium blockchain is important. “
Carvalho emphasized the necessity of the industry’s overall standards, education and collaboration.
“Technology alone is insufficient. Success depends on re -designing the basic business process, investing in education and change management, and promoting collaboration and data sharing culture.”
Synthesized future for food integrity
The convergence of the blockchain with IoT, AI and other innovation provides promising paths. The IoT sensor provides real -time data on the journey of the product, creating a modulation record.
The AI algorithm analyzes large data sets to detect abnormalities and optimize logistics. Fast testing, smart packaging, robotics and digital certificates further improve food integrity.
The infrastructure built to fight fraud benefits more benefits. This includes improved operating efficiency, food waste reduction and real sustainability claims.
Blockchain and complementary technology have become attractive to companies that are directly affected by fraud. Pilot projects have valuable lessons. Industrial consortiums are being formed and standards have begun to appear.
Potential rewards are extended to reduce fraud to include food safety, waste reduction, consumer confidence and more sustainable, fair and flexible global food systems.
Invisible food fraud can spread widely, but not invincible. In case of carefully deployment and integration, the blockchain can be a trust class to solve the $ 5 billion food fraud problem.
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