(Estimated reading time: 3 Minutes)
The 2013 European horse meat scandal sent shockwaves radiating across the global food industry. A food safety executive’s worst nightmare, contaminated frozen meat infiltrated 13 different countries and over 25 companies.
With a globalized supply chain and access to limitless information through the internet, it wouldn’t be unreasonable to assume that those responsible were quickly implicated. Not so; four years later, in July of 2017, 65 people were arrested in connection with the scandal. Rather than increasing transparency and efficiency, some globalized supply chains induce entirely the opposite – corruption, competition, and complexity.
As the quest for traceability, transparency, and trust persists along the food value chain (see picture below), a new technology making headlines almost every day stands as the industry’s best chance yet: blockchain.
2017’s most beloved buzzword, blockchain, has wrestled itself firmly into business vernacular through the meteoric rise of its most popular application: Bitcoin, an electronic currency that, just last week, topped a value of $11,800 per coin. Without diving deeply into the technicalities behind blockchain (watch explainer video here), we want to instead provide an overview of the technology’s business case for agriculture.
Blockchain creates a decentralized ledger available to every actor within a supply chain. Transactions, stored on “blocks,” make up the ledger, giving rise to a comprehensive data set of each asset that swaps hands. In effect, blockchain serves to make bookkeeping paperless, permanent, and powerful.
William Mougayar, a venture advisor, provides the best analogy we’ve seen: “The traditional way of sharing documents with collaboration is to send a Microsoft Word document to another recipient, and ask them to make revisions to it. With Google Docs, both parties have access to the same document at the same time, and the single version of that document is always visible to both of them. It is like a shared ledger, but it is a shared document.” The picture below shows how that system works with the blocks in the blockchain.
Source: Thomson Reuters: https://annual-report.thomsonreuters.com/blockchain-gets-real.html
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