Agricultural companies find themselves in a polarizing time to be doing business.
Consumer’s demands are greater than ever before to know more about the origins of their food; it’s no longer a luxury, but becoming the standard.
Inhumanely treated livestock, inorganic grown vegetables and/or unsanitary working conditions for plant workers. Take your pick of the three; these are all major concerns for consumers and agricultural organizations alike. And, this is just the tipping point.
Forbes magazine published an article last week, raising the question, could Blockchain provide a solution to remedy the lack of supply chain transparency?
It’s important that we give these agricultural organizations the benefit of the doubt. They are just as susceptible to defective suppliers as we are as consumers. But, the agricultural industry doesn’t just receive ‘get out of jail free cards’ because it’s difficult to gain supply chain transparency into their lower supplier-tiers. Empathy aside, responsibility still lies with the end-buyer organization to mitigate risks in the supply chain, and ensure that an end consumer will receive a product that’s quality lives up to promises.
Supply chain management has moved into an era where the application of technology is a must. Blockchain technology offers new capabilities for creating “permanent, immutable record of contracts, transactions, documents, supply chain movement and more” (Forbes 2018).
A consensus has formed amongst technologists that blockchain technology doesn’t yet have enough research, or practical application, within supply chain management solutions to say certainly that it will have impact within any specific timeframe. But, the hypotheses for application that have circulated the global supply chain management community have incited enough interest to make blockchain all the hype.
A Dutch Government funded study, delved into the potential application of blockchain technology for the agricultural industry. They drew several conclusions, coming to the hypothesis that blockchain could result in greater consumer trust and lowered price points.
- “Consumers would know exactly how a food product was grown/raised – what soil, fertilizers, etc. were used for plant products or how animals were raised, what they were fed, etc.
- Consumers would know all of the stop points in the supply chain, who has handled the food products, what was done to food products and how those handlers were certified.
- Removal of at least some intermediaries could lower ultimate consumer food costs.
- Greater trust in global food growers and suppliers would be established, because fraudulent certifications and labeling could be eliminated” (Arnold 2018).
Trust and transparency can be offered with the application of blockchain networks, but when will it become a reality for businesses at scale?