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Blockchain in the Food Industry- Opportunities For Startup

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Blockchain Intervention in the Food Industry and its Opportunities for Agriculture Sector

An agriculture supply chain system comprises organizations/cooperatives responsible for

producing and distributing Vegetables/Fruits/Cereals/Pulses or animal-based products.

Supply chains are, in essence, dictated predominantly by two factors – perishability and

transparency. Start-ups are improving supply chain management in all the stages of the

supply by adopting global best practices in storage, packaging, handling, transportation,

value-added service etc. There should be disintermediation and participation of organized

players, i.e. modern supply chain, to benefit farmers and ultimate consumers. Effective

climate strategies must also include meaningful and regular engagement with supply chains

to build capacity, mitigate such risks and improve procurement strategies.

Around 30-40% get wasted at various supply chain levels, which amounts to a loss of INR 2

Lakh Crores/Year in India, according to ResearchGate. Apart from the loss of revenue to the

farmers, it also increases additional costs in the supply chain, which inevitably burdens the

consumers and retailers. Therefore, transparency and traceability play a vital role in the

supply chain. Emerging technology, such as Blockchain and IoT, play an essential role. The

goal should be to make the solution open and affordable.

Transparency and traceability are currently the most important trend driving the change in

the food and agriculture industry. In the 21st century, with many progressions, humankind

developed sensibilities towards what they consume and buy. Hence, consumers want to

know and comprehend what components are in their products, which is why we see so

many innovative products with shorter, pronounceable ingredient lists. Customers wish for

convenience as well as higher-quality items. Previously, it was unusual to read the back of a

product on the shelf before placing it in the cart. More than ever before, consumers are

reading the back of the packaging. Consumers want brands that are transparent about their

products and mirror their personal beliefs. Consumers seek a company's founding story,

sustainability initiatives, social conscience, and corporate transparency because the brands

they eat, drink, and wear have become a reflection of whom they aim to be. Clean labelling

with high ethical standards is more crucial than ever, especially for a rising proportion of

customers with unique dietary needs. 

India is the world's third largest cereal producer, after China and the United States. India is

the world's leading milk producer, the second-largest producer of inland fisheries and the

third-greatest fish producer. The fisheries sector also employs around 11 million individuals

wholly or partially involved in fishing and related activities. India ranks first in the world in

cattle and buffalos, second in goats, third in sheep and seventh in the poultry population.

The demand for food in India is driven by the country's large and growing population, which

is projected to exceed 1.4 billion by 2024. India is the world's second most populous country

and is home to about 18% of the global population. With such a large population, there is a

constant demand for food in India. India is one of the world's leading producers of rice,

wheat, sugarcane, and various other crops. However, despite being a major agricultural

producer, India still needs help meeting its population's food needs. India is ranked 107th

out of 121 countries on the Global Hunger Index (GHI) for 2022, which means it has a severe

level of malnutrition. India's high ranking on the GHI is partly because a significant portion of

the population is undernourished and suffers from malnutrition. As mentioned above,

innovation in the food industry is only representative of some sections of society. Most of

the invention is seen at the urban level and vaguely at the rural level. Technologies like

Blockchain can penetrate rural depths with a commendable solution. 

A blockchain is an up-and-coming tool for food transparency, safety, and security, as it has

multidimensional benefits for the industry. With secondary tools such as IoT sensors,

blockchain technology can establish a rapidly engaged and transparent food supply chain

that enhances consumer trust and safety. Numerous organizations have explored this

modern technology with various outcomes and improved possibilities. The next stage will be

to make blockchain technology more commercially viable and get broad acceptance from

top food leaders, supply chain players, processors, and the government. All stakeholders in

the sector must collaborate to implement a comprehensive plan for a transparent and

traceable industry. 

There is an incredible opportunity to enhance traceability in the agricultural sector by using

blockchain technology. This process commences at the seed level and goes up to the final

stage, right through the entire supply chain. An advanced form of traceability of this nature

can enhance transparency in the industry. Consumers can benefit by knowing about the

quality of seeds, the handling of food products, production processes and whether or not

the produce is genuinely organic.

Blockchain technology has manifold advantages. Since all the data gets recorded on a

distributed ledger system, it becomes tamperproof. The immutability of the data creates

absolute transparency and accountability. Verification becomes easy at every level – for

regulators, quality certification agencies, manufacturers, wholesalers, retailers and

consumers. It's not just about validation. These initiatives can build brand value for organic

food companies. It is a significant shot in the arm of the trust economy, where agricultural

companies can convincingly prove their products' health and nutrition benefits. The good

news is that blockchain technology is already starting to empower the agricultural sector in

India. Many manufacturers are fast moving towards adopting this technology throughout

their processes.

TRST01 (Trust- O- One), an emerging blockchain start-up, developed a multi-chain

blockchain Platform focused on agriculture, climate, and food technology. Its disruptive

innovation, a robust platform, is establishing trust, transparency, and traceability in the

ecosystem. TRST01 Blockchain platform maps the complete value chain from the food and

Agriprenuers. The various use cases developed by TRST01 are the best examples of

blockchain intervention in the food and agriculture industry. Blockchain-enabled traceability

system for Tandur GI Tur Dal is a noteworthy achievement of TRST01. Professor Jayashankar

Telangana State Agriculture University used TRST01's blockchain technology to trace Tandur

-Tur Dal. 

India's Public Distribution System (PDS) forms the core of survival for many families. The

manual ration distribution mechanism had flaws that didn't guarantee ration access to

beneficiaries. TRST01 Blockchain traceability solution used by an eastern state in India

gathers verified data from procurement to the distribution chain to allow officials to trace in

details of the procurement process until the recipient. Blockchain Technology to attain the

two critical goals of the public distribution system: food security and Nutrition Safety. 

Greentatwa agritech, Hyderabad Samasta Food, Jaipur Rajasthan, and Ovo Eggs Odihsa

adopted the TRST01 Blockchain-enabled traceability solution for their pesticide-free,

Orgianic food Product range. 

Blockchain technology also has the potential to contribute to the achievement of

Sustainable Development Goal 2, i.e., "end hunger, achieve food security and improved

nutrition, and promote sustainable agriculture" goal by improving the transparency,

traceability, and sustainability of the food system. Blockchain contributes to SDG 2 by

improving food safety. Blockchain makes it possible to quickly identify and recall any

potentially unsafe products, reducing the risk of foodborne illness. In addition, Blockchain is

used to improve access to financial services for smallholder farmers, which could, in turn,

help to increase their productivity and incomes. This could help to reduce hunger and

malnutrition in developing countries, which are often disproportionately affected by these

issues.

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