Author – TraceX
Food production and processing are evolving rapidly along with the rise in the capital-to-output ratio. India has positioned itself as the leading country in net cropped area and in global agriculture exports just behind the US and China. Today, India is one of the largest agricultural product exporters in the world that sent $49.6 billion worth of total agriculture exports to around 120 countries during FY2021-22.
With such a huge agro-food processing industry comes various managerial challenges. The product is not reaching the consumer in a proper way due to supply chain inefficiencies. Up to 45% of farm produce is getting spoilt and only 7% of perishable items are processed. According to Assocham, post-harvest losses cost the nation roughly $14 billion annually. A proper supply chain and its effective management are necessary for such a massive industry to function in tandem.
Challenges in the food supply chain
- Fragmented market due to lack of communication:- Farmers in remote villages are not updated with market information due to poor or no communication network. This is causing a major impact on the supply chain efficiencies, excessive waste and inadequate management.
- Lack of transparency and traceability:- There is mistrust in the supply chain since players aren’t aware of what, when and how their peers are performing. Certain food chains are still in the dark about the traceability of agro-food products in various stages of the supply chain. Transparency enhances food safety and acts as a provenance.
- Lack of quality and safety:- With rising demands come the obligation to produce more and supply more, the supply chains are vulnerable to fraud and counterfeit and food contamination. The climate crisis further drives food insecurity.
- Lack of visibility:- Post-harvest loss ranges from 35-40%, which is due to inadequate storage facilities, improver handling, bad logistics and packing. Insufficient collaboration among stakeholders and lack of visibility lead to massive wastage in the food supply chain.
- Lack of compliance:- Government needs to take steps in providing a regulatory authority along with predefined standards, technical knowledge, financial support, etc. to help better the supply chain as a whole. Food systems need to adhere to quality standards and ensure a safe product.
Need for traceability in agro-food supply chain
Both the consumer and the manufacturer today want the utmost quality in their agro-food products. Consumers want to know where their products came from, what raw materials were used during production, etc. So manufacturers seek to win customer trust by supplying reliable data certificates for their goods. Such requirements are met on both ends by traceability.
Traceability is the process of locating a product in real-time at any point in the supply chain based on a system that tracks and connects the entire production, processing, and distribution process. Let us see a few examples of how companies are benefiting from solutions of traceability in agro-food supply chain:
- Ferrero brand voluntarily recalled its two different Kinder chocolates in April 2022 due to risks of salmonella contamination. Although no illness was reported, sweets distributed across several stores were recalled since they were made in the same production facility linked to at least 142 salmonella cases in Europe.
- The 2013 horse meat scandal was another food crisis in parts of Europe where foods advertised as containing spicy beef were found to contain undeclared horse meat. This came to light when horse DNA was discovered in the frozen beefburgers sold in various British and Irish supermarkets.
- In 2020, an Ecoli outbreak was reported across 19 states in the US with 20 people being hospitalized was traced back to leafy greens. Walmart had used IBM’s blockchain technology to digitize its supply chain and reduce the time to track the source of food contamination, thereby aiding in product recall and saving lives.
Such incidents create panic among consumers and brands end up incurring heavy losses and harming their brand reputation.
Blockchain technology has provided a significant improvement in terms of transparency and the agro-food supply chain has been using it for a while now. Blockchain helps in decentralizing data collection so that it is available to all the stakeholders on a common shared platform. Further, it prevents the alteration of data that is stored in digital ledgers, which ensures the security of transactions and builds trust among the players.
Every stage of agricultural production, from the seed source to the producers and farther along the supply chain, is monitored using blockchain technology. Agricultural operations have multiplied thanks to real-time computerized data sharing and recording. Farmers and decision-makers can use data on the type of seed used, water usage, weather conditions, product demand, inputs used, and many other factors to adapt and generate the most productive and regenerative operation possible. QR codes that are generated carry the entire story of the product from the farm to the plate which creates transparency and wins consumer loyalty.
Here are a few companies that offer Blockchain Traceability Solutions
- IBM’s Food Trust is a blockchain platform that engages food and agriculture players on its system, including Dole, Nestle, Walmart, Driscoll, Tyson Foods and many more.
- TraceX is a blockchain-powered traceability platform that helps to build transparent, sustainable and climate-resilient agriculture supply chains
- FoodLogiQ offers blockchain-based solutions to address the global supply chain issues and regulations that face all food companies.
- Provenance is a SaaS platform that enables brands to track and display their supply chain information using blockchain.
- BlockVerify uses ‘Track and Trace’ technology to authenticate food, pharmaceuticals, diamonds and electronic goods.