Food fraud ends up to $ 50 billion and public health every year from the global food industry. When rigid and really deployed, the blockchain can prevent this shady crime.
Problem? It comes with a high value tag. Scalability, cost, interoperability and integrations reduce significant obstacles. Not mentioning long routes to adopt privacy concerns, regulator uncertainty and stakeholder.
But food fraud is not going anywhere. As David Karwalho, CEO of Naoris Protocol, Viewed:
“Most people will be surprised to hear that food fraud is an issue, but it is a prominent, which is the cost of a global food industry between $ 30 billion and $ 50 billion every year. It is a small percentage of the total value of the region – more than $ 12 trillion – but still equal to a small country’s GDP.”
So, what to do? And how can blockchain implementation actually be achieved?
Food bites deeper than fraud
United Nations Food and Agriculture Organization (FAO) framework The fraud of the food involves the purposefully cheating about the quality of the food or material they buy.
Essentially, it is intentionally replacement, to remove or remove materials for economic benefits.
The typology of fraud is varied and sophisticated. These include misunderstandings, theft, forgery and weakening.
Examples of the real world are ignorant. Melamine has been added to milk in China to prove protein content wrong. Horsamet has been sold as beef in Europe. Olive oil is often diluted with cheap vegetable oils.
The economic toll is shaking. But the actual cost is higher when accounting for iconic damage, regulatory compliance, legal battle and consumer loyal erosion.
In some cases, human costs can be far more disastrous; The 2008 melamine scam in China damaged more than 300,000 infants.
Wanchin CEO Temujin Louis highlighted the vicious cycle made by food fraud:
“An event of fraud leads to a health intimidation, which destroys the consumer trust. This less trust can translate into low sales for trapped brands and comprehensive product category, causing damage to economically valid businesses.”
Damage is not calculated as the sum of personal damage. It should be calculated as a systemic weakness of the foundation of the food industry.
Cracks in the supply chain leave food fraud
The complexity and ambiguity of the global supply chains make fertile ground for fraud. The cold chain is particularly weak.
Failures in cold chain logistics may deteriorate. These failures allow the fraudsters to incorrectly present the storage state or to refresh the compromised goods.
The fraud is not limited to high-profile cases or luxury goods. Dairy, spices, seafood, biological product, Honey And fruit juices are often targets.
Carvalho said that fragmented data systems are the heel of a major achilles:
“Many companies maintain their own internal tracking systems, but they often lack interoperability with their suppliers or customers. This resulted in preventing the overall, end-to-end view of the supply chain in ‘Information Islands’.
Fraud products shared and move forward through unspecified systems without reliable data.
Blockchain cuts back
Blockchain technology can serve as a deadly for this growing crisis. Nevertheless, Louis warned that there was part of the challenges in the efforts in the blockchain-based accountancy.
“After the launch of the Etherium in 10+ years, we have seen any true disruption so far,” Louis warned. “One of the reasons that the promise of blockchain in supply chains was largely incomplete that the early adoption was guilty of watching the problem.”
The main principles of blockchain technology can create a more transparent and reliable system. Decentralization ensures that no single unit controls data. And the irreversibility guarantees that once the data is recorded, it cannot be converted or removed.
Connected: South Africa’s Garden Route A Bitciner Guide
The profit does not end there. The selective transparency enables sharing relevant information with authorized stakeholders without highlighting sensitive commercial data. Meanwhile, smart contracts can automate processes and implement agreements.
Ultimately, the cryptography account ensures the integrity and safety of the account. And to take it even further, integrating the internet-off-Things sensors with blockchain, forms an irreversible audit trail of important environmental conditions for cold chain integrity.
The implementation of the real world has started tolerating the fruit. In collaboration with IBM, Walmart uses Hyperlerger fabric to detect pork in China and Mangos in the US, which reduces trace time from days to seconds. Te-food and Provence offer blockchain-based traceability solutions that improve food security and transparency. Major food companies such as Nestle and Carfor and platform supply chain such as Cafood Souk are searching for blockchain to increase transparency.
Lui insisted on paradigm change:
“Traditional food supply chains have worked on a model of relying intermediaries, relying on the words of various actors with paper documents, third-party certificates and chains. Blockchain, contrast, moves towards a system based on verification data.”
Carvalho explained the preventive effect:
“A well -applied blockchain system can serve as a powerful preventive, as increased visibility and auditability makes fraud activities risky and is more likely to be exposed.”
Decentralized deal
Despite its promise, blockchain is not a panacea. Scalability, cost, interoperability and integration with legacy systems create significant obstacles for adoption.
“Garbage, garbage out” problem remains a fundamental range. Blockchain can only ensure the integrity of data once, but it may not be responsible for the accuracy of data entering the chain.
Oracles and IOT devices that feed external data on blockchain are unsafe for tampering and technical failure. Manual data entry is also susceptible to error or manipulation. An ideal traceability record does not prevent a compromised Oracle from feeding false data or a marshy party from entering the fraud details at the point of origin.
Concern of privacy, regulator uncertainty and adoption of stakeholders are additional obstacles. Food supply chains include sensitive data that are reluctant to highlight businesses.
Connected: AI agent is ready to be Crypto’s next major vulnerability
The permitted provides blockchain and selective transparency solutions. However, these careful governance and clear data access protocols are required. Regulatory structures are developing, and extensive stake partnership is necessary for success.
Lui advocates a practical approach. “Start with cases of clearly defined use where blockchain can provide demonstrative value rather than attempting to try a broad, unfocasured implementation,” Louis suggested. “Strong governance models, especially for consortium blockchain, are important.”
Carvalho emphasized the need for industry-wide standards, training and cooperation:
“Technology alone is inadequate. Success hinges on re -designing, investing in training and change management and promoting the culture of cooperation and data sharing.”
A synthesized future for food integrity
The convergence of blockchain with IOT, AI and other innovations provides a promising passage. IOT sensors provide real-time data on a product trip, creating a tampering-proof record.
AI analyzes large data sets to detect algorithm discrepancies and optimize logistics. Rapid testing methods, smart packaging, robotics and digital certificates further increase food integrity.
The infrastructure created to fight fraud gives wide benefits. These include claims of better operating efficiency, low food waste and certified stability.
Blockchain and its complementary technologies have also become attractive to fraud -affected companies. Pilot projects are receiving valuable lessons. Industries are becoming consortia, and standards are beginning to emerge.
Potential awards are beyond reducing fraud to include better food security, low waste, increased consumer trust and more durable, equitable and flexible global food systems.
The ignoring of food fraud can be widespread, but it is not invincible. If thoughtfully deployed and integrated, the blockchain trust may be layer that finally fixes $ 50 billion food fraud problem.
magazine: Crypto wanted to overthrow banks, now it is making them in Stabecoin fight
