Efficiencies and empowerment
China is a leading importer of pork, but it also produces about half of the world’s pork, according to the Economic Research Service (ERS) of the US Dept. of Agriculture (USDA). In a report titled, “China’s Pork Imports Rise Along with Production Costs,” ERS noted that small-scale “backyard” pork producers quickly are being replaced by larger, industrialized pork production systems similar to those used in the United States. In line with this trend, government officials in China are calling for the country’s pork industry to modernize the production system from farm to fork.
“The mere fact that we’re working on this breakthrough pilot using a company like IBM, technology like blockchain technology and Wal-Mart and that this idea originated with our work in China, I think, is pretty powerful,” Yiannis notes. “The fact that government regulators there are requiring traceability, and companies are all working toward traceability, I think, is reflective that the culture there is really advancing a food safety culture that requires greater traceability.”
It also demands greater efficiencies. In addition to bringing safety, traceability and accountability to China’s pork production industry, Yiannis says Wal-Mart aspires to add value to the global food system by leveraging greater insights from data and analytics so that the food system becomes more efficient.
Chang agrees: “The real advantage of blockchain technology can be showcased when the supply chain is rather lengthy,” he says. “If you can imagine mangoes being grown in South America, being able to track that to the aggregator then to the exporter, the shipping company, the importer and then US Customs to the US wholesaler, distributor…I think that’s where we’re going to see the efficiency gain – not just the ability to track the movement of goods for safety purposes – but really gain efficiency by being able to perhaps cut out some middlemen who really don’t add much value other than being there as a trusted source for different parties to interact with.”
Chang says that blockchain also is a game-changer when it comes to participation by all stakeholders within the chain. “I think that’s where blockchain is really changing the game because it is a simple and elegant solution that is hosted [and] that many of the participants could just access using mobile devices,” he says. That really changes the game in terms of how smaller farmers who are starting the chain and need easy access to the system can provide the necessary information for their downstream customers.
Blockchain, Chang says, “has been the missing piece that’s required for everyone within the supply chain to be able to participate.”