Benefits of blockchain technology in food production

Adapting new data technologies may lead to fairer food prices for consumers and producers, by increasing transparency. Using the blockchain platform for future transactions could reduce prices for consumers and provide fairer returns for farmers. Blockchain systems could ensure transparency of interactions, gathering accurate data and eliminating the need for intermediaries.

Associate Professor Michaela Balzarova of Te Rāngai Umanga me te Ture, College of Business and Law, is conducting theoretical research into different applications of blockchain technology to address sustainability challenges arising from production and consumption of goods and services. Balzarova is also researching eco-labelling schemes and voluntary environmental systems that businesses adopt to mitigate their environmental and social impacts.

Prior to the advent of blockchain, Fair Trade labels were developed to improve the livelihoods of farmers in developing countries, but this approach was problematic when it came to coffee. Products could pass through over 20 intermediaries that add little value to the product or service, with consumers unaware if what they are paying is fair, as the transactions are not transparent or direct.

Eco-labels address the consumer demand for environmentally sound and ethical production processes, allowing them to make environmentally friendly purchases. However, the social, economic and environmental efficacy of Eco-labels is unclear. Research indicates that Eco-labels are facing challenges in terms of measurability, thereby promoting unsustainable trends in the production of goods.

Blockchain technology records data and peer-to-peer trading transactions, monitoring digital asset transactions in a decentralised manner. The technology uses mathematical algorithms and financial incentives to ensure accuracy of data.

Balzarova is researching the benefits of blockchain technology in sustainable food production, by comparing what blockchain offers to labelling schemes that try to mitigate adverse production impacts.

“We need to focus models on how we can feed everyone on a fair basis, improving comfort and standard of living for everyone on this planet. It’s not just an issue of getting rid of intermediaries. We need to encourage users to take ownership of data stored on their behalf and blockchain enables this,” Balzarova said.

Balzarova first discovered blockchain during a trip to Vienna in 2017. A team of scientists from the University of Natural Resources and Life Sciences (BOKU), and Balzarova, will be returning to Venice in 2019 to establish a system for monitoring and improving the labour conditions of suppliers. The outcomes of Balzarova’s conceptual study will be presented at an international conference of the European Academy of Management (EURAM) in Portugal later this year. 

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