Every year, food fraud leaves to $ 50 billion from the global food industry and threatens public health. After implementing rigorously and realistically, blockchain can prevent this shadowy crime.
Problem? Has a high price. Scalability, cost, interoperability and integration are significant barriers. Not to mention the fears of privacy, regulatory uncertainty and a long path to accept interested parties.
But food fraud is not going anywhere. As noted by David Carvalho, general director of the NAORIS Protocol:
“Most people would be surprised by hearing that food -related fraud is a problem, but this is important, costing a global food industry from 30 to $ 50 billion a year. This is a small percentage of the total value of the sector – over $ 12 trillion – but still equivalent to the GDP of a small country, such as Malta.”
So what should you do? And how can you really achieve blockchain implementation?
Food fraud bites deeper than we realize
Food and Agriculture Organization of the United Nations (FAO) guidelines This food -related fraud deliberately contributes to clients’ quality or the content of the food purchased.
Basically, this is a deliberate substitution, add or removing materials for economic profits.
Typologies of fraud are varied and sophisticated. They include incorrect designation, theft, counterfeiting and dilution.
Lots of real examples. Melamine was added to milk in China to falsify the protein content. Korwia was sold as beef in Europe. Olive oil is often diluted with cheaper vegetable oils.
Economic is stunning. But the actual cost is much higher taking into account reputational damage, regulatory compliance, legal battles and erosion of consumer loyalty.
In some cases, human costs may be much more destructive; The melamine scandal in China in 2008 made over 300,000 infants.
Tenmin Louie, general director of Wanchain, emphasized the wrong cycle created by the fraud related to food:
“The fraud incident leads to health fear that weakens consumer trust. This reduced trust can translate into reduced sales for a involved brand and a wider product category, thus economically harming legal enterprises.”
Damage is not calculated as the sum of individual losses. It should be calculated as a systemic weakening of the food industry foundation.
Cracks in the supply chain Let me fool the fool
The complexity and coverage of global supply chains create fertile soil for fraud. The frosty chain is particularly sensitive.
Failures of the logistics logistics of the refrigeration chain can lead to spoiling. These failures allow fraudsters to mislead storage conditions or sell threatened goods as fresh.
Fraud is not restricted to deafening boxes or luxury goods. Dairy, spices, seafood, ecological products, honey and fruit juices are common goals.
Carvalho added that fragmentary data systems are the main heel of Achilles:
“Many companies maintain their own internal tracking systems, but they often do not have interoperability with their suppliers or clients. This causes” information islands “to prevent comprehensive, comprehensive view of the supply chain.”
Fraudulent products enter and pass through a system not detected without shared, reliable data.
Blockchain plays
Blockchain technology can be used as an antidote for this growing crisis. However, Louie warned that accounting attempts based on blockchain had their participation in challenges.
“In more than 10 years of the premiere of Ethereum, we have not yet witnessed real disturbances,” Louie warned. “One of the reasons why the promise of block chains in supply chains was largely unfulfilled, is that early adopt were guilty of excessive simplification of the problem.”
The basic principles of blockchain technology can create a more lucid and trustworthy system. Decentralization ensures that no unit controls data. And the invariability guarantees that after registration of the data it cannot be changed or deleted.
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The benefits do not end. Selective transparency allows you to provide relevant information with authorized stakeholders without disclosing confidential commercial data. Meanwhile, clever contracts can automate processes and enforce contracts.
Ultimately, cryptography ensures the integrity and security of the book. And to work even further, the integration of internet sensors from blockchain creates an unchanging trace of environmental audit, crucial for the integrity of the refrigeration chain.
Real implementation begins to bring fruit. In cooperation with IBM, Walmart uses hyperledger fabric to track pork in China and Mango in the USA, shortening the trail time from days to seconds. Te-food and origin offer identification solutions based on blockchains that improve food safety and transparency. Main food companies, such as Nestlé and Carrefour and platforms such as Souq, study blockchain to augment the transparency of the supply chain.
Louie emphasized the change of paradigm:
“Traditional food supply chains operated on a model of intermediaries, consisting of paper documents, certificates of other companies and words of various entities along the chain. Blockchain goes towards a system based on verifiable data.”
Carvalho explained the deterrent effect:
“A well -implemented blockchain system can act as a powerful deterrent, because increased visibility and control ability make fraudulent actions more risky and more likely that they are exposed.”
Decentralized contract
Despite the promise of blockchain, he is not a panacea. Scalability, cost, interoperability and integration with older systems are significant barriers in the party.
The problem of “garbage, rubbish” remains a basic limitation. Blockchain can only ensure data integrity after their entrances – but it cannot be responsible for the accuracy of the data entering the chain.
Oracles and IoT devices that supply external data on blockchain are susceptible to manipulation and technical failure. Manual data entry is also susceptible to errors or manipulations. An excellent identification record does not prevent the impaired oracle feeding of false data or the collusion of false details at the point of origin.
Privacy concerns, regulatory uncertainty and adopting interested parties are additional obstacles. Food supply chains include sensitive data that companies are reluctant to expose.
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Block permits and selective transparency offer solutions. However, they require careful management and clear data access protocols. The regulatory frames are evolving, and the wide participation of stakeholders is necessary for success.
Louie is in favor of a pragmatic approach. “Start with clearly defined use cases in which blockchain can provide a value that can be demonstrated, not try a wide, indefinite implementation,” Louie suggested. “Solid management models, especially in the case of consortium blocks, are crucial.”
Carvalho emphasized the need for standards in the industry, training and cooperation:
“The technology itself is insufficient. Success is based on redesigning the underlying business processes, investing in training and managing changes, and supporting the culture of cooperation and data sharing.”
The established future of food integrity
Blockchain convergence with IoT, AI and other innovations offers a promising path. IoT sensors provide real -time data on product travel, creating a record resistant to manipulation.
AI algorithms analyze immense data sets to detect anomalies and optimize logistics. Quick testing methods, clever packaging, robotics and digital certificates further augment food integrity.
Infrastructure built to combat fraud brings wider benefits. They include better operational efficiency, reduced food waste and justified claims regarding sustainable development.
Blockchain and his complementary technologies have become attractive even for companies less directly affected by fraud. Pilot projects give valuable lessons. Industry consortia form and begin to appear standards.
Potential awards go beyond reducing fraud in order to cover better food safety, reduce waste, augment consumers and a more balanced, fair and resistant global food system.
The concealed bite of food -related fraud may be ubiquitous, but it is not invincible. If it is implemented and integrated, blockchain can be a layer of trust, which ultimately fixes the problem of fraud with a value of $ 50 billion.
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