Blockchain is a buzz-worthy concept in various industries, and companies around the world are investigating how this technology can improve traceability in the agri-food industry. However, there are numerous questions to be answered before the Canadian beef industry can determine if blockchain is feasible for traceability.
A blockchain is a web-based record-keeping system used to share data through a computing network that is either public or private. When information is added to this system, it is encrypted and becomes a new “block” of data added to the “chain” of records. Each partner involved in a blockchain has a copy of this database.
Blockchain was used in 2008 to develop cryptocurrency Bitcoin, a digital monetary system. Traceability in the agri-food industry is another application being explored. Using radio-frequency identification (RFID) tags or quick response (QR) codes, products can be scanned at each point along the supply chain, providing information to a blockchain. If there’s a recall or food safety issue, product can be rapidly traced to its point of origin and each location entered.
Tech giant IBM is working with agri-food companies to adopt blockchain technology in its tracking systems. The company’s IBM Food Trust aims to increase transparency and leverage this information into premiums. Wal-Mart is also developing food traceability systems that use blockchain, and Tyson Foods has partnered with several food companies to create a similar record-keeping system.
Blockchain promoters suggest that it may help bridge the gap between producers and consumers through increased food security and transparency, as well as establish standards to earn premiums for quality. However, many people developing blockchain platforms believe that most industries, including agriculture, will not see this technology used full-scale for several years.
A relatively new technology
Vitalik Buterin, a web developer and co-creator of blockchain platform Ethereum, has suggested in interviews that blockchain is still in its infancy for uses other than cryptocurrency.
“I’m not claiming that this model is going to be viable in every industry,” he told online news outlet Quartz. “That’s clearly something that still needs much more time to be worked out before we can see (whether it) makes sense at scale.”
Other experts indicate that uncertainties around blockchain make it difficult to determine whether or not a company should use it. In a recent Country Guide article, Karen Hand, director of research data strategy at the University of Guelph’s Food from Thought research program, stated that “just implementing a blockchain for the sake of blockchain isn’t an intelligent strategic move. It has to be like any technology where you consider what’s already working, look at the blockchain and see if it would improve efficiencies.”
There are several aspects to consider. While full transparency is promoted as a blockchain benefit, this is only the case for a public blockchain, in which each party can access a copy. In a private blockchain, not all participants will have a copy, and the party that created it will establish the rules.
While some consider blockchains unhackable, Dave Rejeski, director of the Technology, Innovation and the Environment Project at the Environmental Law Institute, has highlighted security as a challenge. The many layers in blockchain systems are, in fact, susceptible to hacking, Rejeski said.
There’s also the question of whether this technology is best suited to the beef industry. In the case of companies developing blockchain platforms for beef traceability, Deborah Wilson, senior vice-president of TrustBIX Inc., raised concerns that they may not be familiar with the scale of beef production. When she spoke with representatives from IBM Food Trust, they were not aware of many factors that would be tracked in a blockchain, such as health and welfare practices and how often an animal is moved during its lifetime.
“They honestly believed that an animal is born on one operation, lives there its whole life eating grass until it goes to become meat,” she recalled.
Questions surrounding beef traceability blockchain startups
In the United States, private startups that use blockchain for beef traceability and verification are receiving attention. One such company is Wyoming-based BeefChain, a partnership of six ranches, traceability experts and technology specialists, including those from IBM Food Trust. BeefChain uses a blockchain, as well as cryptography tools such as digital signatures, to enhance traceability and prove humane handling, according to its website.
“It’s a digital ledger, so essentially what we do is take our data points along the supply chain and hash them into the ledger, and then that creates the immutable trail of data,” said Rob Jennings, CEO of BeefChain. Around 1,600 calves on six participating ranches have been tagged, to be harvested in fall 2019 and marketed as Wyoming Certified Beef.
Producers will scan calves’ RFID tags again at weaning and transport, providing information such as geolocation, ownership and vaccination details to the blockchain. The information is carried through the supply chain, in the hopes that feedlots, processing plants and others will share information up and down the chain, said Jennings.
One goal is to “create efficiencies for the producers so they can spend less time on paperwork and more time on ranching and raising animals and doing what they do best,” he said.
Another major goal is to share data to support claims about beef raised through the program. “We think it’s important, particularly with export markets and increased consumer interest and demand to validate the data points that are behind claims.”
Eventually, BeefChain plans to provide premiums to producers. Jennings said they also want to improve price discovery for producers and create a more direct relationship between consumers and producers. The plan is to allow consumers to scan QR codes on menus to learn where their beef came from.
While such programs are promising, it is only the platform itself — the blockchain — that is new, Wilson pointed out.
“They’re doing exactly what we do in BIXS, which is if they’re treating the animal with a vaccine or an antimicrobial, they’re just putting it into the blockchain,” said Wilson. “Feedlot software has been doing that for years… All of that information, from a Canadian perspective, we’re already capturing.”
Wilson raised concerns that state-specific startups using blockchain for traceability may be overlooking aspects related to food safety and animal disease outbreaks.
“It’s for the benefit of their business only,” she said. “They want to garner new markets by using traceability, but they aren’t delivering on what is really required, and that is animal health traceability, disease traceability, how (you) keep your borders open in the event of an animal health event.”
Wilson compared this to the Canadian Livestock Tracking System (CLTS), which has to share information with the Canadian Food Inspection Agency (CFIA) in the event of such an issue. She predicts communication issues between different blockchain platforms used by startups.
“They’re going to realize they have as much interstate movement of cattle down there as we have inter-provincial movement of cattle here in Canada,” she said.
“There is a lot of different languages you can build technology in,” said Wilson. “There’s a lot of different platforms you can use for blockchain, too. So if there is no way for them to share information and there’s no central hub that allows all of these different platforms to talk together, I don’t know what they’re going to do.”
When asked about these concerns, Jennings stated that while BeefChain is currently working at the producer level, he wants the program to be part of the solution surrounding recalls and disease tracking.
“These are problems in the industry, and from our perspective we don’t have the answer to everything and blockchain’s not the answer to everything. It’s not a one-size-fits-all, but it is a good aggregator of how can we collect these data points and make them in a public, sort of transparent way along the supply chain, and then how can we start to try and solve some of these problems. And that’s really the conversation that we’re in,” he said.
“I think the rancher ultimately benefits the faster we can quarantine and cut off a disease outbreak,” Jennings added. “Then there’s less likelihood that markets can fall and entire herds have to be killed, and that’s really what we’re aiming for on that front.”
Can startups deliver the verification of beef production practices that they promise? Jennings sees the use of blockchain as an advantage compared to other verification systems. BeefChain is currently in the process of becoming certified as a USDA Process Verified Program (PVP).
“The difference between what us and the other companies are currently doing is that we’re validating on blockchain, so we’re actually putting our data forward and hashing it and creating that immutable chain,” he said. “What we hope to do by digitizing all of this and then using geolocation and date stamps and digital signatures for verification purposes is to create a better audit system that is based on real data points, not paperwork filled out.”
On the other hand, critics state that the use of blockchain alone will not provide actual verification of these practices.
“To me, verification is a third-party process,” said Wilson. Whether it’s traced with BIXS or CCIA or a blockchain, it’s not a verification process unless it’s audited by a third party, she said.
But Jennings sees this technology as a chance for BeefChain to act as a third-party auditor for other programs. In addition to using its USDA PVP certification to audit and verify beef that qualifies for standards such as Wyoming Plus, all-natural or AngusSource, BeefChain will be able to verify ranches for programs that require specific management practices.
“In some of those instances they’re verifying the ranch, but what they’re not doing is verifying the cattle on the ranch,” he said. “What we think we can do in helping with that is not only creating a digital trail of the data points that would complete a protocol for their ranch certification, but we can also then AngusSource the cattle on that ranch. So if you want to sell your beef as being bird-friendly or carbon neutral or whatever it may be, your ranch would be certified for those things and then we would come in on top of that and AngusSource the cattle as being from that ranch… We can help be a validator of that information and the first place to start is tagging animals in with an RFID tag and then collecting their data points from there forward.”
The Canadian beef industry can expect blockchain technology in traceability programs in the future, as existing organizations are exploring these possibilities. Wilson reported that BIXS has spent considerable time researching the platforms, models and languages of blockchains to learn how the technology could be used in their system.
“We do have a couple of proof-of-concept blockchains developed; we just need to find the right situation to deploy them,” she said. “They’ll be private blockchains for specific purposes.”
In the case of BIXS, questions remain as to whether blockchain will be viable for its purpose.
“Right now, we’re not 100 per cent convinced that a blockchain can store the huge amount of data that BIXS is currently capable of storing,” said Wilson, citing concerns about the sustainability of a large, complex blockchain that requires a huge amount of computing power. For example, it is estimated that Bitcoin consumes the same amount of energy each year as all of Ireland.
While Wilson predicts the Canadian agri-food industry will adopt this technology, how this may look for the Canadian beef industry is still up in the air.
“I don’t ever think it’s going to be a fully transparent public blockchain. I think it will be a number of private blockchains developed for specific use or specific case purposes,” she said.
It may also be an opportunity to strengthen the Canadian brand on a global scale.
“The demands coming from Europe and the Pacific Rim countries is for traceability, full traceability, and for additional information about how that animal was raised…There’s going to be a global expectation that we understand where these animals have been or where we sourced the food products to make a wine, a juice, a package of mixed vegetables in the freezer at the grocery store,” said Wilson. “All of that’s going to have to be tracked ultimately.”