As part of my series “Real World Applications of Cryptocurrencies”, and follow-up from my previous post on Cloud Computing & Golem, which you can find here, I will be discussing how the Food Traceability industry will be disrupted by the emergence of the blockchain and cryptocurrencies.
Coincidentally, after I had started writing this post, I attended a steak course, where the Chef was criticizing how hard it is to find out exactly where beef has come from, how it’s butchered, whether it’s organic etc. — a perfect example for the need of food traceability.
Food Traceability— TE-FOOD (TFOOD)
Food traceability is probably something you never thought of before but something extremely important for your health. Regardless, there are a number of issues in this sector and especially in emerging markets, which are also major exporters of food. Some of these issues include:
Food Safety — I cannot stress enough, how severe the social and economic impact is, from lack of food safety. Foodborne diseases are accountable for the hospitalization of 700 million people and 400,000 deaths worldwide annually. Additionally, according to a study by the Ohio State University, the average cost of foodborne illness was estimated at $55.5 billion, in the USA alone.
Antibiotics — Using antibiotics in agriculture has many benefits; they promote growth and are essential for treating infections in animals. However, antibiotics are being overused and in many cases, used as part of intensive farming to prevent infections and speed up growth. This has given rise to antibiotic resistance, leading to new “superbugs” which are ingested by humans during food consumption. These “superbugs” can cause infections in humans that can lead to adverse health consequences. Researchers worldwide have been warning farmers to dramatically reduce the amount of antibiotics used in agriculture, in order to avoid a crisis. You can find a brilliant post by the UK’s National Health Service article explaining the problem here.
Mistrust & Fraud—Food supply chain companies, authorities and consumers have no way of confirming how each operate. There isn’t truly a way to prove this, which could lead to mistrust and deceit. Additionally, food fraud has a significant global economic cost to the food industry. According to PwC the economic impact is estimated to be in the region of ~$40 billion annually.
Economic Inequality — According to a report from public policy group Demos, the food industry is one of the most unequal sectors within the USA economy, and this is echoed globally. Just to give you an example, CEO’s of fast food chains can earn 1,000 times more than their average worker. This not only hurts the under-paid workers, but also shareholders.
TE-FOOD is a successful farm-to-table livestock and fresh food traceability solution, focusing on emerging markets. Since 2016, TE-FOOD has been implemented in Vietnam. As a farm-to-table solution, TE-FOOD tracks the items through the whole supply chain (farm, slaughterhouse, wholesaler, retailer) and provides tools to both consumers and authorities to gain food history and food quality insights.
TE-FOOD is an existing company that has been established in Vietnam since 2016. It currently serves over 6000 business customers, tracking 12,000 pigs, 200,000 chickens, and 2.5 million eggs daily.
TE-FOOD has created a centralized ecosystem in which each step in the food supply chain can be tracked.
However, according to their whitepaper“even data coming from a third party like existing traceability system seems suspicious to the participant”. The solution to this, is introducing the blockchain. By moving the TE-FOOD ecosystem on the blockchain, TE-FOOD will be able to provide a completely transparent, unmodifiable environment (and tools) for food supply chain companies, authorities and consumers.
The diagram above is just a general representation of the food supply chain. Within the TE-FOOD ecosystem, this can be further customized for specific uses cases.
TE-FOOD focuses on solving the issues discussed in the previous section, in the following ways:
Transparency & Immutability—By moving the TE-FOOD ecosystem on the blockchain, it brings complete transparency and trust between all “stakeholders” of the food supply chain. For example, authorities can track & confirm whether farms are following correct practices. Consumers can immediately find out how their product was sourced, transported, slaughtered and much more. Farmers can avoid double vaccinations and overuse of antibiotics. The advantages of a transparent food supply chain are endless.
Controls —Authorities have the ability to introduce & enforce control points in the food supply chain. This means a product needs to have fulfilled certain criteria before moving onto the next part of the chain.
Forecasts and Analysis — Sophisticated algorithms will analyze data and alarm relevant authorities if there are signs of an epidemic outbreak. Since the data is transparent and valid, it will be easier to track the root cause and prevent it from spreading faster than the current means.
Fair Trade — Governments and institutions providing grants and tax-relief will have an easier and more accurate way of determining who are entitled to these. Additionally, conscious consumers will have the ability to “support” developing countries easier.
Supply Chain Rating—Participants in the food supply chain will be able to view & rate other counter-parties. This will promote good practices and deter bad actors.
How are the TFOOD Tokens used?
The TFOOD Token has a multitude of applications; it is used in the TE-FOOD ecosystem in the following ways:
Execute traceability transactions by paying with TFOOD.
Used to exchange “paid” information (i.e. the type of antibiotics) between supply chain companies.
Get rewarded with TFOOD by using the TE-FOOD consumer mobile application in retail.
Purchase food quality analysis services.
Rate supply chain companies that they have “interacted” with.
I would also like to point out that TE-FOOD has a number of competitors in the supply chain area. Similar projects include Ambrosus (AMB), Modum (MOD), Provenance, WaBi (WABI) and Walton (WTC). If you would like to see a post comparing and contrasting these projects, feel free to drop me a comment below or a tweet.
TE-FOOD has not launched their token yet. You can only purchase TFOOD Tokens during their Initial Coin Offering (ICO) which is dated for the 22nd of February. You can sign-up for their ICO here.
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