Mhlnews 9880 World Hunger

One Man’s Trash: How Blockchain Can Target Food Waste to Help End World Hunger

May 2, 2018
For organizations that source products from suppliers in remote regions, blockchain can provide clarity in an otherwise murky journey from harvest to retail.

World hunger is a global epidemic. According to the United Nations, one in nine people today—or 815 million globally—lack access to the food necessary to lead a healthy lifestyle. A staggering 98% of these live in developing countries and 75% live in rural areas that depend on agriculture for their livelihood. As population density rises and resources dwindle, the lasting effects of world hunger only seem to be getting worse. Global communities are calling for change, in whatever form, to move the needle in the right direction.

As it turns out, the solution to this growing problem may lie in our own refrigerators. Every year, one third of the food produced in the world for human consumption—or 1.3 billion metric tons—gets lost or wasted. What’s more, net food losses in developed countries (222 million metric tons) equate to nearly all of the food produced in Sub-Saharan Africa yearly (223 million metric tons).

You may be asking, “What can we do?” Much of the food waste produced around the world can be traced back to inconsistencies in the supply chain: inventories aren’t recorded, suppliers aren’t informed, and quality isn’t taken into account. This is all about to change. Through advances in blockchain technology—the mechanism underpinning cryptocurrencies like bitcoin and Ethereum—we have an opportunity to incorporate more accuracy into the system, putting an end to processes that allow viable produce to go to waste.

The Cold Chain Conundrum

Blockchain offers a decentralized and immutable ledger that can be accessed by any party operating in a given supply chain. Whenever a product changes hands, that “transaction” is permanently recorded on a shared database that cannot be edited or deleted. For organizations that source products from suppliers in remote regions, blockchain is an essential tool that can provide clarity in an otherwise murky journey from harvest to retail.

For years, traditional supply chain operations have resulted in miscommunication between vendors, which causes food spoilage. Between 1996 and 1999, nearly 37,000 metric tons of bananas in Australia were lost yearly because banana growers lacked an adequate mechanism to communicate with packing facilities. It was not until extensive research was conducted by a single Australian retailer that the community discovered that bananas were being mishandled in transport. By using blockchain, vendors and suppliers can eliminate user error by exposing vulnerabilities in the system and then implementing targeted protocols to address them.

However, as demand increases, supply chains have also had to increase in size and scale, making it difficult to ensure consistency in product quality. To combat this growing trend, companies are beginning to introduce temperature-controlled supply chains, known as “cold chains,” to ensure that distance traveled doesn’t inadvertently lead to damaged goods. It’s certainly been a breakthrough in the industry, but with one enormous contingency: Each vendor has to have the resources necessary to uphold the cold chain, or they risk temperature fluctuations that result in wasted food and negative consumer impact.

It’s a problem that impacts developing countries the hardest, as local vendors lack the capacity to keep or monitor their perishables at adequate temperatures. Communities in developing countries have, on average, a refrigeration capacity of 19 cubic meters per one thousand inhabitants, while those in developed countries have roughly 200 cubic meters per one thousand inhabitants. To put this in perspective, lack of refrigeration has led to nearly a 28% food loss in developing countries, compared to a 10% loss in developed countries.

Now, through blockchain, we have the power to bring cold chains to the world at large, without the need for costly and centralized processes. Using this technology, vendors can remotely record a wide variety of predetermined measurements, including storage temperature, at each juncture in the supply chain. If temperature at point B varies dramatically from the temperature at point A and C, product managers can extrapolate this data to pinpoint problem areas and allocate resources accordingly.

It’s not just the producer that stands to benefit from these advancements. Consumers, especially those in developing countries, can use blockchain to become better informed about the quality of products they purchase, before they buy them. An individual in a remote village in Thailand, for example, can access up-to-the-minute details on how many times a given product has fallen below acceptable storage temperatures. In addition, blockchain’s internal algorithms can be used to calculate a revised expiration date based on those measurements. In the fight against world hunger, providing developing communities with the ability to make informed decisions will pay in dividends in ensuring the longevity of food storage.

The Call for Asset Sharing

Though it would be shortsighted to assume that this process will happen overnight, resource sharing can ease the transition. Vendors with more advanced storage capabilities can be incentivized to assist their peers in the space. Today’s global economic market rarely encourages collaboration of this magnitude; however, asset sharing can increase efficiency in global commerce by nearly 10% to 20%. Moreover, asset sharing offers tremendous potential in providing support to distributors who might otherwise lose their produce due to lack of sufficient resources.

By 2050, the global population will consist of 9.7 billion people, with much of the growth concentrated in Sub-Saharan Africa and industrialized parts of Asia. As the global population rises, so too does the demand for resources. In the wake of heightened necessity, industry experts say we will need to increase our food availability by 70%. Take a moment to let that sink in.

When we consider our current geopolitical climate, rampant with food shortage and wealth disparity, it would seem easy to give up hope that we will ever end world hunger. However, we have a real opportunity to implement tangible change in our society simply by taking advantage of resources that would otherwise go to waste. Through blockchain, this is a possibility.

With enhanced transparency and accountability, we can finally implement a decentralized supply chain that will strengthen global infrastructure, leading to greater accuracy and fewer missed opportunities. From the wholesale manufacturers in Iowa to the farmers in Bangladesh, change is coming.

Scott Nelson is CEO of Sweetbridge, a global blockchain alliance. He was previously the founder and CEO of Trax Technologies, a global logistics analytics and freight audit & payment firm.

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