I'm an accredited journalist working at the intersections of science, food and public health, and a certified nutritional practitioner.
Blockchain and Organic Food Traceability
Global food policymakers are on a mission to protect the value of the organic label in the eyes of consumers. Could augmented blockchain traceability help?
Companies following organic standards come under increasing pressure as a result of partnering with others in a supply chain that is ever more complex.
As the industry has grown, producers have increased in scale, and large companies focusing on the sale of processed organic products have emerged. This new supply chain complexity makes it more difficult to monitor quality control and best practices among suppliers.
There is also a deepening divide that exists between a culturally based organic movement with a long history and a newer corporate industry that is eager for growth.
In the U.S., consumer demand for organic products has grown by double digits in almost every year since the 1990s and went from about $15 billion annually in the early 2000s to around $60 billion dollars today.
Globally, the organic food market has increased by 9.7%, from $201.77 billion pre-pandemic to $221.37 billion in 2021, and there is an especially steep rise in the U.K.’s consumption of organic food.
The segment is now expected to reach $380.84 billion in 2025, at an annual rate of 14.5%. This next level of growth is creating a crisis of fraud in organic certification at different steps of the supply chain.
How does fraud present in the industry?
Fraud presents itself in a few different ways.
First, it can take the form of a misrepresentation of the product or crop itself. For example, passing off conventionally grown or non-GMO foodstuff as organic.
It can also mean maintaining control of some fields certified as organic, while selling non-organic crops obtained elsewhere, as if they had also grown in those fields.
Yet another type of fraud consists in selling a product that would otherwise qualify as organic, except that a supply chain partner—a grower, trans-loader, shipper, processor, seller or last-mile distributor—failed to take appropriate measures to maintain the integrity of the product or their organic status.
When do suppliers have incentive to commit fraud?
The timeframe required to transition land subjected to non-organic treatments to organic production takes three years. Given how fast the organic market is expanding, some producers are opting for alternative means to get into the market, including buying grain from other organic farmers and then selling it on.
Then there is the question of conflicts of interest between a certifier and producers. Some feel that the certifier that is being paid by the farmer may not always want to blow the whistle on a fraud.
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Finally, the quality of inspections depends on inspectors understanding the intricacies of a region’s agricultural industry.
The issue of variability in the descriptive markings of certifications has also been raised. Some certifiers choose to put the acreage on the certification, but others don’t, which means farmers can agree to sell more than their realistic organic crop yield.
What needs to change to minimize fraud?
It will be up to food manufacturers and the organic industry to work with global regulators as they start to look at implementing new organic legislation to make sure things develop as best as they can.
The National Organic Program (NOP), a USDA program, certifies almost 45,000 organic operations throughout the country and the world, with both announced and unannounced annual inspections.
But it is important to confirm not only certification but also standard operating procedures (SOPs), which often go above and beyond current NOP standards from the USDA program, before partnering with any supplier.
In 2019, the Organic Fraud Prevention Solutions (OFPS) program was launched to help producers and processors assess their vulnerability to fraud, in addition to the support of certifiers. The OFPS requires participants to undergo training, undertake an assessment of their vulnerability, and develop a prevention plan.
A new organic regulation is on the horizon, which should bring about and incorporate many changes related to the enforcement of organic quality control checks into existing USDA measures. The amendment will apply to processes across the production, handling and sale of organic products.
Specific processes subject to change include but are not limited to import certificates, supply chain traceability, certifications of operation, site inspections, multi-ingredient product labeling and auditor training.
Some aspects of the upcoming regulation remain unknown, such as a definitive implementation timeframe as well as the expected costs and the effects on both certifying entities and businesses.
The entire process of implementing best practices to prevent and detect the introduction of non-organic products into the supply chain needs to be traced to ensure quality. While several solutions have been proposed, they all pale in comparison to the efficiency that blockchain traceability programs have introduced.
How does augmented blockchain traceability help?
Blockchain food traceability is not a new concept in the global agricultural sector. It is well established among food producers who rely on the technology to build resilient supply chains and more accurately track the provenance of food.
This technology tackles one of the most severe violations in organic certification fraud: using fraudulent documents to market, label, or sell non-organic agricultural products as organic. The use of public, private and hybrid blockchain could facilitate accountability in the movement of products and the phases of business transactions.
To determine what is covered by a company’s organic certification demands a constant monitoring of transaction certificates, which indicate a load’s date and place of origin. Through blockchain, transaction data is continuously authenticated with each new transaction. No document can be tampered with through the network without recording a trail of the change and the perpetrator.
The era of the inscrutability of a crop’s organic status and disguise by paperwork ends with blockchain, as the combination of IoT sensors could help in monitoring the crop field(s) in real time. Blockchain can save time during auditing processes and help inspectors to take a holistic view of information, with the ability to share a company’s entire data footprint in seconds.
On the consumer side, blockchain would allow the traceability of products through a QR code. It is very important to restore consumer trust in the labels of brands they consume.
The global use of blockchain in food supply chain management is projected to keep rising and reach $948 million by 2025. The technology is being refined over time, especially when it comes to its applications and analytics thanks to augmented intelligence.
Beyond simply offering networks and smart contracts for the storage of data, it is now improving the way it delivers end-to-end visibility—for example, when monitoring supply chain events and processes, to assess pain points and identify problems.
The combination of blockchain technology with augmented reality (AR) lets stakeholders visualize product knowledge in an entirely new dimension that can be further personalized infinitely. The aggregation aspect of blockchain is important for our brains to more easily process information.
The information on material, supply chain and fabrication needed for constant real-time checks on quality control could be easily accessible in AR through even more playful, interactive timelines, along with additional detailed breakdowns of different supply chain components.
Since 2013, the European Commission has been funding projects through the EU’s FP7 and Horizon 2020 research programs for the development of blockchain platforms and smart contracts. And it launched the EU Blockchain Observatory and Forum in February 2018.
Blockchain technologies will be rolled out across many industries susceptible to fraud within the U.S. and Europe in the next decade, though not without some limitations.
These limitations include performance, scalability, and confidentiality. And, because it is now a combination of many technologies, blockchain standards for interoperability will also have to be defined so that these elements can work together.
For blockchain to be effective in agri-food traceability adoption, there must be participation from all parties and points of contact involved. This should not be too difficult for most industry players, given the overwhelmingly convincing evidence of the value it can provide.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2022 Camille Bienvenu