Blockchain for Short Food Supply Chain

Goal

Short Food Supply Chains (SFSC) are chains in which goods/food involved are identified by, and traceable to a farmer and for which the number of intermediaries between farmer and consumer should be minimal or ideally nil. Several types of SFSCs can be identified, for example (1) CSAs (Community-Supported Agriculture), (2) on-farm sales, (3) off-farm schemes (farmers markets, delivery schemes), (4) collective sales in particular towards public institutions, being mostly local / proximity sales and in some cases (5) distance sales. Such type of food chain has specific social impacts, economic impacts at regional and farm level, as well as environmental impacts translating themselves into a clear interest to consumers. SFSCs are present throughout the EU, although there are some differences country by county, in terms of dominating types of SFSCs. In general, SFSCs are dominantly small or micro-enterprises, composed of small-scale producers, often coupled to organic farming practices. Social values (quality products to consumers and direct contact with the producer) are the values usually highlighted by SFSCs before environmental or economic values.

Current food supply systems are coping with increasing challenge of food fraud and consumer trust. Food fraud poses serious risks to public health as well as damaging European food industry at a range of 10-15 billions of Euros annually. Food fraud occurs when food or drink is sold in a way that deliberately misleads or deceives consumers or customers for financial gain. While food fraud is not new, the motivation to adulterate or counterfeit food for financial gain is growing and a new solution is needed. Current food safety management systems are not always designed for fraud detection or mitigation, but new food safety guidelines from Global Food Safety Initiative (GSFI) require it.

On the other hand, consumers are more and more conscious and informative about food they eat. They are interested to know everything about food origin, food nutrition, food certificates and other relevant information.

S2CP SFSC image1

This way we can summarize the main challenges in Short Food Supply Chains (SFSCs):

  • Food fraud prevention in the sense of making sure that the source of products is local
  • Lack of transparency through the entire SFSC
  • Lack of product / producer information accessible to the customer
  • Accessibility of food certification information (integrated, ecological, protected geographical identity)
  • Lack of knowledge and resources to equip SFSCs with IT systems

Method

In order to ensure transparency, traceability and trust of the local food production, blockchain technology (BC) presents the natural technology fit in the so-called SFSC. Each SFSC stakeholder (except the consumer) is going to be equipped with a BC-related digital identity, whereby every SFSC stop will handle a BC transaction, digitally signed by a registered and verified SFSC stakeholder (e.g. producer, delivery service etc.). Each BC transaction will handle basic BC-related information (i.e., timestamp, digital identity, signature), as well as specific food (i.e., type, harvest region, harvest datetime, etc.) and logistic related information (i.e., LOT number, type, etc.). The proposed end-system will also enable the storage of digital proofs (i.e., harvest or delivery photos etc.), which can be stored on a related IPFS or Swarm network. The BC network consist of a Hyperledger Besu (Ethereum) Consortium Type BC network

Results

Green point (Zelena točka) is a Short Food Suppy Chain, which is based on (1) helping farmers to produce local products, (2) connecting them into a cooperative and educating them on branding, (3) collecting their local products, (4) distributing products through Green Point Trans to the customer and (5) selling products through the Green Point. The Green point is founding member of Digital Innovation Hub AGRIFOOD (DIH AGRIFOOD), helping its target groups and members in digital transformation of their businesses.
Since Green Point acts as a distribution center, organizing a SFSC in the North-Eastern part of Slovenia (Pomurje region), it is also a priority to start solving the problem of food fraud, by preventing counterfeiting of local food origin and making sure that final customers have origin guarantee. There are namely a lot of cases where local producers claim to sell third party (imported) products as their own products.
We intend to solve above mentioned challenges by introducing blockchain technology at all the levels of the supply chain, starting with the farmers who are producing local food, continuing with logistics / storage operations and finishing with all sales channels in the SFSC (physical stores, web-stores, gross sales), while making sure that current software solutions is integrated with the blockchain technology.
Following steps have been introduced:

  1. Local producer receives digital identity and enters the data about his production (selected product) to the application; he also prepares the delivery docs (digital),
  2. Local producer delivers product directly to the store,
  3. The store accepts the product from producer by scanning QR code from his mobile phone; data directly transferred to store business management system
  4. Declaration for the product is prepared by the store and placed to packaging so customers can track the origin by scanning QR code