Source-linked AI summary
The Rise of Blockchain Technology in Agriculture and Food Supply Chains
Andreas Kamilaris, Agusti Fonts, Francesc X. Prenafeta-Boldu
TL;DR
The current food supply chain is inefficient and unreliable, with processes that are not sufficiently transparent. This article examines blockchain projects and initiatives in food supply chains and concludes that blockchain supports transparency and sustainability, while barriers constrain wider adoption.
Problem
The current food supply chain is inefficient and unreliable, with processes that are not sufficiently transparent.
Method
The article examines blockchain projects and initiatives intended to establish a proven and trusted environment for transparent food supply chains.
Results
Blockchain is a promising technology for transparent food supply chains and can support more sustainable food production and distribution.
Takeaways & Limitations
Blockchain offers a secure, reliable and transparent way to support food safety and integrity.
Takeaways & Limitations
Many barriers and challenges, including privacy concerns, hinder wider adoption among farmers and systems.
Abstract
from arXiv · showhide
Blockchain is an emerging digital technology allowing ubiquitous financial transactions among distributed untrusted parties, without the need of intermediaries such as banks. This article examines the impact of blockchain technology in agriculture and food supply chain, presents existing ongoing projects and initiatives, and discusses overall implications, challenges and potential, with a critical view over the maturity of these projects. Our findings indicate that blockchain is a promising technology towards a transparent supply chain of food, with many ongoing initiatives in various food products and food-related issues, but many barriers and challenges still exist, which hinder its wider popularity among farmers and systems. These challenges involve technical aspects, education, policies and regulatory frameworks.
1 GIRO Program, IRTA Torre Marimon, E-08140 Caldes de Montbui, Barcelona, Spain
The section identifies the Research Centre on Interactive Media, Smart Systems and Emerging Technologies and lists the paper’s central keywords.
- The Research Centre on Interactive Media, Smart Systems and Emerging Technologies (RISE) is located in Nicosia, Cyprus.
- The paper focuses on blockchain technology, digital agriculture, food supply chains, and adoption barriers.
1. Introduction
Blockchain is presented as a distributed transaction system that maintains agreement among participants without relying on a trusted central authority. Its applications extend beyond cryptocurrency, although consensus mechanisms can impose energy, cost, centralization, and environmental challenges.
- A blockchain links successive blocks through hashes, so manipulating one block produces mismatches in later blocks.
- Transactions are disseminated across network nodes and validated to maintain a consistent view among participants, including potentially dishonest parties.
- Proof of Work validates transactions through computational puzzles, but competition increases hardware and energy costs and risks centralization and environmental damage.
- Proof of Stake assigns validation according to coin holdings and achieves distributed consensus without large computing-power and energy expenditures.
- Blockchain applications now include smart contracts, ownership tracking, health records, voting, product distribution, and supply-chain tracking beyond financial transactions.
- Blockchain-based applications may make third-party tampering or censorship virtually impossible while introducing challenges that require anticipation.
2. Food Supply Chain
Food supply chains involve many distributed actors and stages, from production and processing through distribution, retail, and consumption. Existing processes are inefficient, paper-heavy, opaque, fraud-vulnerable, and costly, while consumers seek origin and quality information.
- A generic agri-food chain comprises production, processing, distribution, retailing, and consumption stages.
- Consumers demand traceable information about food quality standards, country of origin, production, and related characteristics.
- The current food supply system is inefficient and unreliable, with complex paper-heavy settlements and limited transparency among participants.
- Fraud risks bring intermediaries into transactions, increasing transfer costs; operating supply chains are estimated to account for two thirds of final goods costs.
- Consumers may lack information about product origins and the environmental footprint of locally purchased goods.
3. Blockchain in Agriculture and Food Supply Chain
The paper reviews blockchain initiatives and applications across agricultural and food supply chains, examining their practical uses, benefits, and adoption barriers. It finds evidence of traceability, efficiency, food-safety, farmer-support, and environmental applications, while emphasizing that wider adoption remains constrained.
- AgriDigital processed more than 1.6 million tons of grain through over 1,300 users, involving $360 million in grower payments.
- Blockchain reduced Louis Dreyfus Co.’s document-processing time to a fifth by matching data in real time and avoiding duplication and manual checks.
- Blockchain records supply-chain actions through digital technologies and stores validated information as a permanent record accepted by participating business partners.
- The review identified 49 blockchain initiatives and classified them into six categories spanning food security, safety, integrity, farmer support, waste reduction, and supply-chain management.
- Food integrity was the largest category, comprising 24 initiatives or 49.5% of the identified initiatives.
- Blockchain applications support food safety by enabling early identification of contaminated products, fraud, and risks, with real-time problem identification and notification.
- The paper presents blockchain as useful for improving trust in transactions involving small farmers and cooperatives and for increasing environmental awareness.
4. Analysis of the Findings
The survey identifies blockchain initiatives across diverse agricultural and food products, but most remain experimental, with limited integration into normal operations. Ethereum and Hyperledger Fabric are the most frequently reported platforms, while project maturity and continued activity remain uncertain.
- Initiatives and applications: Blockchain initiatives span grains, olive oil, meat, seafood, beverages, organic food, food waste, and other agricultural products, serving financial, traceability, supervision, management, and farmer-support objectives.Table 1 links projects to both product categories and intended uses.
- Project maturity: 20% of projects were at the conceptual stage, 26.5% in implementation, and 28.5% in small proof-of-concept pilots.Only 4 projects or initiatives (8%) had reached full integration into normal operations.
- Project maturity: All 8 large-scale case studies (16%) were supported and run by big companies, whereas research-oriented projects generally reached only conceptual, implementation, or small-pilot stages.Large-scale studies involved hundreds of products, thousands of consumers, or tens to hundreds of intermediate supply-chain actors.
- Project continuity: Blockchain is therefore still treated mainly as an experimental emerging technology, with some companies potentially pursuing pilots for marketing or future competitive advantage.The survey notes that only four initiatives had reached complete integration into normal operations.
- Project continuity: The authors suspect that 7 of 29 commercial initiatives (24%) may have become inactive, but recent project launches make their economic viability difficult to assess.Most initiatives began recently, so their short lifetimes leave their continuation and outcomes uncertain.
5. Potential Benefits
Blockchain is presented as a way to improve transparency, traceability, financing, and coordination across agricultural and food supply chains. Potential benefits extend from faster product tracing to stronger support for small farmers, consumers, and sustainable practices.
- Supply-chain transparency: A decentralized ledger can connect distant inputs, suppliers, producers, buyers, and regulators operating under different programs, rules, or applications.Smart contracts may also support scalable and flexible business processes at lower cost.
- Supply-chain transparency: Blockchain could improve provenance, monitor social and environmental responsibility, support real-time transaction management, and trace contaminated products more quickly during disease outbreaks.The proposed benefits combine supply-chain visibility with secure transaction records.
- Finance and inclusion: Blockchain may facilitate mobile payments, credit, insurance, and financing for small farmers and enterprises that lack traceable cash transactions or conventional support services.A shared ledger can reduce uncertainty and disintermediate value exchange with reduced, if any, transaction costs.
- Fairness and coordination: In developed-world settings, blockchain could support fairer pricing across the value chain and reputation-based trading systems that improve participating parties’ reliability and responsibility.These possibilities address unfair pricing, concentrated corporate influence, and coordination among many supply-chain actors.
- Consumer empowerment: Greater consumer awareness enabled by blockchain could encourage more transparent, sustainable, safe, and fair food-production practices and influence purchasing decisions.The paper links this potential to consumer difficulty interpreting numerous and complex certification labels.
- Economic potential: The paper reports that blockchain implementation costs can be sustainable when compared with the resulting benefits, although this conclusion comes from a specific case study.The cited case study concerns the cost-benefit sustainability of blockchain implementation.
6. Challenges and Open Issues
Wider adoption is constrained by technical, organizational, governance, regulatory, and skills-related barriers. The paper also emphasizes unresolved questions about scalability, data quality, privacy, market access, and the limited maturity of existing projects.
- Access and skills: Small and medium-sized enterprises may lack the size, scale, or know-how to invest in blockchain independently, while training platforms and general awareness remain limited.The paper identifies accessibility, education, and stakeholder capacitation as adoption challenges.
- Data and trust: Accurate blockchain records depend on external oracles such as sensors, web datasets, or manual records, so third-party inputs may compromise decentralized trust.The paper notes ongoing research into decentralized, consensus-based, and authenticated oracle solutions.
- Access and skills: Blockchain systems can become technical barriers to trade when the information infrastructure required to operate them prevents new users or food suppliers from accessing markets.The resulting effect may reduce market competition and access.
- Governance and regulation: Blockchain adoption faces unresolved governance and regulatory issues, including unclear policy understanding, privacy concerns, possible oligopolistic practices, and the absence of common rules.Permissioned or private systems may strengthen centralized control, while permanent visibility can create privacy and surveillance concerns.
- Data and trust: Food-quality and environmental parameters are not all easy to measure, include, or audit, limiting the completeness of transparent product information.Some quality parameters can be monitored objectively, but environmental parameters are especially difficult to assess and audit.
- Technical challenges: Existing protocols face scalability and flexibility problems because transaction processing is limited by block size and interval, while permissionless transactions may take minutes or hours to finalize.Under some circumstances, these design constraints can make blockchain less efficient than conventional centralized approaches.
7. Conclusion
Blockchain is already being used in numerous agri-food initiatives and is promising for more transparent, sustainable, safe, and reliable food supply chains. Wider adoption remains constrained by unresolved technical, educational, policy, regulatory, and economic-sustainability challenges.
- Blockchain is already used by many projects and initiatives targeting transparent food supply chains.
- Blockchain could support more sustainable food production and distribution by integrating key stakeholders into the supply chain.
- Governments can reduce adoption barriers through public-sector digitalization, research and innovation investment, education, and training.
- Policy measures include supporting blockchain-oriented agri-food ecosystems and establishing a clear regulatory framework.
- Many challenges still hinder wider popularity, while the economic sustainability of existing initiatives remains to be assessed.
- Combining blockchain with big data, robotics, IoT, RFID, NFC, and hyperspectral imaging could increase automation, transparency, and traceability.