The food supply chain is broken, and the World Economic Forum aims to solve it with Blockchain.
Could your next meal 🍜 be delivered on the chain ⛓?
The food Supply chain is complicated and vulnerable to Acts of God, especially non-FMCG, perishable goods. A very simple Food Chain schematic would focus on Producer, Distributor, and Consumer — but like everything 21st Century, Food Supply Chains are incredibly complex, and our current food supply chains are broken. Today we are going to talk about the World Economic Forum’s (WEF) way to streamline a chain using the Blockchain Toolkit.
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Earlier, this year, a ton of distributors and farms were heavily hit by the pandemic and the stay-at-home orders. And it is essential that these producers and distributors stay open so that the famine doesn’t occur.
“One of our beef plants feeds 22 million people per day, so it’s vital that these plants stay open”
— Dave MacLennan, CEO of Cargill Inc.
Most food supply chain looks pretty simple. It starts off with a Supplier delivering Raw Materials to the Manufacturer, who supplies the goods to Distribution centers, from where it is sold to customers via retailers.
But these supply chains are not very accountable. About 18% of the produce from India is wasted, which might not seem like a lot, but consider that India exports only 1–2%. India lost a close to 5 Million USD purely due to wasted produce. There is a hierarchical approach to minimizing food waste.
While wastage is one problem, the other is efficiency or lack thereof. Food Industry largely still relies on paper for accounting. There have been attempts to digitalize, but countries with low internet penetration or populations that struggle with the User Interface are left behind. A ton of organizations uses a centralized approach to something that is inherently decentralized in the sense that there are no central bodies governing a certain chain of supply. Sure, you have ministries that look to form a framework that optimizes profits for everyone involved, but these organizations turn out to be prone to human errors, are fed incorrect data, have wrong estimates, make inaccurate assumptions, or are simply corrupt. Decentralization has always been a way to ensure trust in two parties. From a distance, it seems that WEF aims to solve 3 important problems with the Blockchain Toolkit:
- Traceability with privacy
- Streamlining the Global Supply-Chain and Automation
- Making finances simpler
Blockchains are the kings of traceability. If you pay a vendor using Bitcoins for a bag of crack, you know that information is on the chain forever. Blockchains by nature are tamper-proof — This is especially important in the Food industry where trust is scarce.
The Blockchain Toolkit stepped in a time that shook the Food Supply Chain from the roots. From Raw Material suppliers to Retailers, everyone is shaken. SARS-COV-2 became the biggest headlines. The government had to issue requests to limit purchases, to not panic buy. This was after 50% of the consumers: Eateries, Hotels et al. had died as businesses. There should have been a surplus. Distributors went out of business, despite the surplus of harvest waiting to be delivered. There’s a difference between MVPs and Undercooked products, The Blockchain Toolkit is neither. It is (almost) ready to be deployed, and it should be out there supplementing the industry.
But is it viable?
Blockchain-based applications are treated with hostility by the governments, I mean look at the new Digital Yuan, despite being a Cryptocurrency, it is centralized. The distrust in decentralization is evident. Authorities want to control, and decentralization is essentially anti-authority. I have little hope for this to be deployed as a government force, however, there is a chance that private firms indulge in supplementing their chains with the Blockchain Toolkit or something of the sort. At a meetup @ Vellore, one of the founders of Cosmos India, Diptanshu, said something very interesting. Blockchain projects aim to “disrupt” existing tech. But change to that degree is usually not welcome. Instead, devs and marketers should focus on presenting solutions as a supplement, an enhancement to the present technology.
Blockchain products aim to establish a certain trust between the users of the network, and that is exactly where the toolkit enters. It will be very exciting to see the long-term implementation of the toolkit, given that some of the industry’s top players are backing it.
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