The agriculture industry has been facing challenges in providing enough food for the world population while enhancing food safety, lack of transparency, and control over the supply chain and trust of the consumers. Blockchain-based traceability can solve these challenges by making all the information transparent to control better the supply chain, encourage responsibility of all stakeholders, and increase the trust of consumers.
Agriculture industry confronts headache challenges
Agriculture spearheads the economic sector of the Vietnam economy, which accounts for 14.6% in the GDP, equal to 40 billion USD in 2018 and expected to grow to 51 billion USD by 2020. The proportion of fruit in Vietnamese agriculture is 9.5%, equivalent to the value of 3.8 billion USD. Every year, Vietnam produces more than 4 million tons of fruit for export and domestic consumption. Vietnam, in particular, and Asia, in general, are the primary supply regions of the world food and agriculture productions, which accounts for a third of the global food supplies. According to FAO, by 2050, the world will need more 2.1 billion tons of food, and most of them will be produced in Asia. Asia is also the fastest developing regions in terms of economic and population, which causes a burden on the agriculture industry of Asia in general and Vietnam, in particular, to produce more food for food security and ensure the sustainability of development.
Overview of Vietnam’s agricultural market
However, the increase in demand also brings more opportunities, along with challenges to all stakeholders in the supply chain. With the pressure of delivering more food which can be stored in a long time for traveling long distances, the value chain is becoming more complex. The agricultural producers have applied technologies in their production to harvest more products in the same areas of land and caused the problems of food safety and transparency in the value chain of agriculture. Farmers now are familiar with using plant protection chemicals and growth stimulants on their products to trigger their plants and livestock unnaturally. The contained chemicals in food exist for a long time after harvesting is one of the main reasons for food jeopardization.
Moreover, transport and store food in improper ways or use food preservative is also decreased the food quality and damage agricultural products. For instance, some agricultural products such as fruit, meat, and frozen fish require to be stored at an adequate temperature steadily during transportation and warehousing processes. If the temperature is changed or can not be kept regularly, the quality of food will be affected.
Food sanitation is also a challenge for the agriculture supply chain. After harvesting, the products will go through processes of sorting and processing, manufacturing, packaging, delivering and storing, then selling to the consumers. Therefore, maintaining product quality and sanitation throughout the supply chain is not an easy job because it’s challenging to get all the stakeholders followed strictly to the sanitation standards. From the consumers’ side, they need to know exactly the origins of their food, the product journeys that the products go through, and trustworthy information about if the products are certified and tested before selling to the markets. Many EU and American countries require businesses to provide traceability information about importing agricultural products, but the information is only submitted for custom clearance processes.
Lack of transparency hinders the development of the agriculture supply chain. All the information about the product journey needed to be updated continuously, it helps to control the flow of products and to maintain the quality of the goods. Besides, the information has to be transparent, trustworthy, and trackable because this data is a valuable source for controlling all activities and analyzing to improve supply chain efficiency. Seamless traceability is also worthwhile to consumers. As CFG x Futerra Expert Survey, 70% of consumers are most interested in product transparency, 55% of them demand more information on social, health, environment, and safety issues about consumable products. Also, in this research, 73% of consumers will be loyal and buy more products from the brand that is transparent about their products. It shows that transparent traceability incontrovertibly is the success factor in the cultivation supply chain.
How Blockchain solve these challenges?
Blockchain technology can make all the data transparent because all the updated information is immutable and can not be changed or deleted. With Blockchain, all the transactions are recorded and can be retrieved easily with unchanged proof. That encourages all supply chain stakeholders to take full responsibility in ensuring the products meet the sanitation and quality standard due to undeniable evidence on Blockchain. Applying Blockchain to traceability helps the supply chain managers to have end-to-end visibility and control better over the supply chain based on seamless, transparent information flow. If all the trustworthy information is available to everyone in the supply chain to access, everyone can make better decisions promptly when an issue may happen. On the other hand, the retrieved information from Blockchain gives the decision-makers a trustful source of reference to predict potential risks, estimate the demands for planning more correctly, and provide valuable data for analyzing and improving supply chain activities. Therefore, Blockchain increases trusts of all parties joining in the supply chain and consumers, prevents frauds, eliminate losses, and ensure the product quality.
On the value side, Blockchain improves the agriculture value chain by providing transparency and traceability. When all the transparent information is available, the supply chain participants can take prompt actions if there is a problem happens; trace back to know the root causes of an issue; or use it for analyzing, estimating and reducing wastes, thereby, improving the efficiency of the supply chain. For consumers, transparent traceability makes them more confident in choosing food for their family; then, they will become loyal fans to the brand that provides transparency.
Blockchain will help ensure the transparency of traceability information.
Blockchain technology is also an exciting topic at the International Symposium on Tropical Fruits, taken place in Ho Chi Minh City, as the promising technology that changes the agriculture industry in the future. WOWTRACE, a startup specializing in providing Blockchain-based traceability solution to businesses, has introduced their successful case study to the event and attracted the attention of the guests and other speakers. The difference between WOWTRACE and other traceability solution is the technology behind. Using Blockchain for recording all transactions, the input data from all supply chain stakeholders are transparent, immutable, and undeniable. WOWTRACE identifies the products to the item level, that means, each item has a unique ID presented by a unique QR code. When an item is transferred through a step in the supply chain, the related information will be recorded on Blockchain.
Dr. Manoj Nardeosingh (second from the left) – Secretary-General of African-ASIA Rural Development Organization (AARDO) expressed his interest in the application of Blockchain traceability technology to Indian agriculture.
Consequently, there is no circumstance that two items have the same traceability information. This solution prevents frauds, counterfeit products, and make information trustworthy. Consumers can use their smartphone to scan the QR stuck on every product to retrieve all information of the product and its journey.
Mr. Nguyen Duc Phuong Nam – Managing Director of WOWTRACE spoke at ISTF2019
“WOWTRACE solves the problems of the agriculture supply chain such as food safety, transparency, and trust between supply chain stakeholders and consumers. WOWTRACE has successfully implemented the Blockchain traceability solution on Vietnamese Mango, Chocolate, and Organic vegetables with positive feedback. We are developing our solution to help businesses control their supply chains better with end-to-end visibility, optimized management tool, and comprehensive user experience. We also expand the solution to other industry besides agriculture like pharmaceutical, FMCG, high-value products.” – says, Mr. Nguyen Duc Phuong Nam, Managing Director of WOWTRACE.
With proven records of the application of Blockchain in traceability from WOWTRACE, Blockchain technology promises to transform the agriculture industry shortly. The transparent and immutable characteristics of information recorded on Blockchain is the key to solve the problems of product quality and trust in the agriculture supply chain. All supply chain stakeholders including the farmers and producers, distributors, retailers, logistics services providers, consumers or even the governments will save a lot of time and money thanks to the integrity of data on Blockchain.
WOWTRACE is a completed ABCD (AI, Blockchain, Cloud, Data) Traceability Solution that brings sustainable growth and transparency to the supply chain across Asian countries. Thereby, all stakeholders achieve end-to-end visibility and control over their operations on the supply chain.
Learn more about WOWTRACE at: https://www.wowtrace.io/
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