Blockchain in the Agrifood Sector:

Opportunities and Challenges

Dr Seamus O’Reilly

Department of Food Business & Development

Cork University Business School

UCC

s.oreilly@ucc.ie

Overview

1. Intro to Blockchain

2. Food Supply Chains – challenges where Blockchain might help

3. Examples of early application

4. Key questions

Blockchain

• is a distributed (shared) ledger

• used to track transactions (or file digital records)

• every time a transaction is completed (and verified) it is added as a block to the chain

• each block has specific information (hash) that identifies it and links it to the previous one

• once verified cannot be change (immutable).

Origins and applications

• Origins in Computer Science in domains of cryptography and data structures - Ralph Merkle in 1979

• Application for crypto currencies – e.g. Bitcoin (Satoshi Nakamoto in 2008)

– Open Blockchain with ‘proof of work’ miners verifying transactions

– Main elements: Distributed ledger, Immutability, protocol

• Applications expanded to a variety of transactions

– ‘Permissioned’ Blockchains – for enterprise level applications

– How is verification done

– How scalable is it?

Traceable

Shared Transparent

Is it all hype?

Gartner’s

positioning on their

Hype Cycle

What are the opportunities to enhance

supply chain management?

Digitizing Global Trade with Maersk and IBM

https://www.ibm.com/blogs/blockchain/2018/01/digitizing-global-trade-maersk-ibm/

The cost of global trade is estimated at $1.8

trillion annually with potential savings from

more efficient process of ~10 percent. The

cost and size of the world’s trading

ecosystems continues to grow in complexity. January 2018, Maersk and IBM announced the intention to establish a new blockchain

Since the collaboration started in June 2016, multiple parties have piloted the platform including DuPont, Dow Chemical, Tetra Pak, Port Houston, Rotterdam

Port Community System Portbase, the Customs Administration of the Netherlands, U.S. Customs and

Border Protection..

Applications in logistics

• Emphasis on Transparency

• Decline in consumer & citizen trust in food systems

• Complexity of food supply chain

- Transparency can be difficult to achieve

- Traceability can be complicated

- Scale and bureaucracy adds cost

• Blockchain as a Consumer Centric

- economic agency ‘back’ in the hands of consumers

• Blockchain as a Distributed Ledger

– Opportunity to increase access to data and decrease costs

So what can it do for us?

So what can it do for us?

“provides a unique opportunity to bring greater efficiency, transparency and traceability to the exchange of value and information in the agriculture sector”. (August 2018)

IBM Food Trust™

“A group of leading companies across the global food supply chain today announced a major blockchain collaboration with IBM intended to further strengthen consumer confidence in the global food system.” “It can take weeks to identify the precise point of contamination, causing further illness, lost revenue and wasted product.” http://www.supplychain247.com/article/major_blockchain_collaboration_to_address_food_safety_worldwide

Applications in food supply chains

Carrefour rolls out blockchain

across supply chains posted by Alex Daniel, in Supply chain Technology (CIPS)

10 October 2018

… planning to apply the shared ledger to its premium ‘Quality Line’ range, which includes French and

Norwegian chicken, salmon, eggs, milk, tomatoes and cheese, by the end of the year.

The French company will use IBM’s blockchain platform, Food Trust, to track the products, following

the lead of Walmart, Unilever and Nestlé who are also trialling the technology.

Walmart tells leafy greens suppliers

to use blockchain posted by Francis Churchill, in Supply chain, Technology (CIPS)

3 October 2018

Walmart has told all its suppliers of leafy greens to sign up to its blockchain solution by this time

next year.

In an open letter, the retailer said it expected all suppliers of fresh leafy greens to Walmart stores

and Sam’s Club wholesalers to have end-to-end traceability through blockchain by the end of

September 2019.

Ripe.io And Its 'Blockchain Of Food' Secures $2.4 Million In Funding

Forbes Sep 11, 2018, https://www.forbes.com/sites/jennysplitter/2018/09/11/ripe-io-and-its-blockchain-of-food-

secures-2-4-million-in-funding/#7169850e4435

A sensor stands in a tomato field at Wards Berry Farm in Sharon, Massachusetts, U.S., on Tuesday, Oct. 24, 2017. An ex-banker at Wells Fargo & Co. and a former executive at Nasdaq Inc. decided to leave finance to start Ripe.io, which uses blockchain in agriculture, and has big aspirations to weave it through the food supply chain

Blockchain technology could potentially be used to create a whole new level of transparency in the food system. “The data [that’s now] stuck in all the different silos throughout the [food] supply chain [can be brought] together into this magical object that we’ve designed called a food bundle,”

Arc-net and Scottish distillery in blockchain link-up with Belfast-based company achieves world first with Adelphi Ardnamurchan Distillery Thu, Oct 5, 2017, 05:21 https://www.irishtimes.com/business/technology/arc-net-and-scottish-distillery-in-blockchain-link-up-1.3244056

Ben & Jerry’s launched a blockchain initiative to let customers offset their carbon footprint at a London ice cream shop opened this summer. While Ben & Jerry’s have pledged to purchase carbon credits to offset the negative impact of each scoop, customers are also invited to offset their purchase as well by donating an additional penny. By the end of the one-month pilot, Londoners had helped save 1,000 trees, covering the equivalent of 77 tennis courts.

info.trendwatching.com

Questions/Discussion Points Arising?

Opportunities/Benefits

• Potential role in address need for transparency (societal & consumer issues).

• What are the opportunities to enhance supply chain management?

• What type of Blockchain is appropriate Including do I need it?!

– Permissioning (Private and Consortium types)

– How scalable is it (in-chain or off-chain)?

Decisions/challenges?

• How is data verified?

• Data security

– “If I share my data how do I know it won’t be used for other purposes?”

Authenticity Brand

Integrity Access