Food fraud costs the global industry around $50 billion annually and poses a threat to consumer health. Blockchain promises to be an effective means of addressing this issue but faces significant challenges.
Dangers of Food Fraud
According to the Food and Agriculture Organization (FAO), food fraud involves intentionally misleading consumers about the quality or content of products. Types of fraud include substitution, addition, or removal of materials for economic gain. Examples include adding melamine to milk in China and selling horse meat as beef in Europe. David Carvalho, CEO of Naoris Protocol, highlights the importance of this issue:
> “Most people would be surprised to hear that food fraud is a major issue, costing the global food industry between $30 billion and $50 billion every year.”
Vulnerabilities in Supply Chain
The complexity and opacity of global supply chains create fertile ground for fraud. Products like dairy and seafood are common targets. Carvalho points out the fragmentation of data tracking systems:
> “Many companies maintain their own internal tracking systems, but these often lack interoperability with their suppliers or customers.”
Blockchain's Potential as a Solution
Blockchain can serve as a powerful tool to combat food fraud by ensuring transparency and reliability of data. It allows for a decentralized record-keeping system where data cannot be altered. A successful example is Walmart's collaboration with IBM, which reduced product trace time from days to seconds. However, Louie cautions:
> “In the 10+ years since Ethereum launched, we’ve yet to witness any true disruption.”
Despite existing challenges, the integration of blockchain and other technologies could significantly enhance food safety and reduce fraud levels in the industry.
