Enabling Consumer Food Safety: Blockchain & Traceability ToolsA look at the problem of global supply chains, consumer food safety & use of blockchain to improve traceability
From fruits and vegetables to meat and poultry, consumers today have an enhanced awareness of and desire for increased food safety and food security. Concerns about the global food supply due to poor safety practices, lack of enforcement, counterfeit, adulterated or diluted goods have increased in the past few years.
New Trade Deal with China Raises Concerns about Food Safety for American Consumers
In mid-2017, a trade arrangement was made with China. This allowed export of $2.5 billion in US beef to China and enabled the Chinese to export cooked poultry to the United States. The United States is the largest poultry producer in the world and exports more poultry than any other country except Brazil. The People’s Republic of China (PRC) had only been permitted to export processed poultry products to the United States if the poultry was raised and slaughtered in the United States or other eligible countries.
Country of Origin
Country of Origin (COO) is a term used internationally to refer to the location of where a product is manufactured, produced, processed or grown, or to be simplistic, originated. When food products are shipped for import or export, a Country of Origin Certificate is required. Here are a few reasons why this is needed:
- Duty is determined based on COO
- Some goods cannot legally be imported or exported from specific countries
- The import and export of goods is controlled in some cases and quotas or embargoes may be in place
- Business owners may be entitled to a preferential duty program through trade agreements or under U.S. Customs law.
- Helps to streamline the process of clearing customs smoothly
The USDA Country of Origin Labeling law (COOL) mandates that retailers including most grocery stores and supermarkets identify the country of origin on specific foods:
Muscle cuts and ground lamb, chicken, goat, wild and farm-raised fish and shellfish, perishable agricultural commodities peanuts, pecans, ginseng and macadamia nuts.
Although the COOL regulation does not stipulate the exact size or placement of COOL declarations, the rule specifies that the statements must be “legible and placed in a conspicuous location where they are likely to be read and understood by a customer.” The COOL declarations can be on a placard, sign, label, twisty tie, pin tag, band or other format.
This was primarily due to concerns over avian influenza transmission from raw poultry. Avian influenza can infect humans: 1557 human cases of AH7N9 flu and 370 deaths have been confirmed by China.
Because of the change in country of origin labeling, commonly referred to as COOL, consumers will no longer know if all the poultry they purchase for their consumption came from China. Food safety awareness is a critical issue for consumers. COOL took effect in 2013 and mandated that packaging state the country or countries in which animals were born, raised and slaughtered. Industry surveys indicate that approximately 90% of American consumers want meat labeled with country of origin information.
Although the USDA stopped enforcing COOL requirements for beef and pork in 2015, chicken remains on the list of food items covered by COOL, however this is not true of all types of poultry. Whether you consider this issue to be food politics or food defense, the bottom line is advancing food safety for all consumers.
A new regulation proposed by the USDA Food Safety and Inspection Services amends the inspection regulations to make the PRC eligible. Not yet passed, this lifts the requirement that poultry processed and exported to the U.S. must be raised and slaughtered in the U.S. or an approved country. This would mean that poultry raised and harvested in China could be used. This has been opposed by the Consumers Union in the United States, the policy and mobilization arm of Consumer Reports as well as other consumer groups and former food safety officials. Arguments have been made that China has made minor changes in improving food safety but lacks the consistent oversight and enforcement of its regulations.
In response to numerous scandals, China passed its most comprehensive food safety regulation to date and it took effect on October 1, 2015.
The USDA released a clean audit report for the PRC a month after the comment period was finalized on the proposed rule that would enable China to export poultry raised in the PRC. The report is based on inspection by FSIS auditors of four Chinese poultry facilities and two microbiology laboratories. In opposition to the new rule that would open the $30 billion American poultry market to China, The Center for Foodborne Illness Research and Prevention (CFI) noted that inspecting such a small number of facilities was insufficient to provide adequate data and make such a consequential decision that would impact American consumers.
Their dissent to the favorable decision also included questions as to whether the USDA has the required resources to conduct audits “at the frequency needed to ensure the safety of Chinese products”.
Here are some of the food safety issues identified with the PRC:
Chinese Government Does Not Adequately Oversee and Enforce Food Safety Protection Laws
Dealing with international organizations and countries can be tricky. Often enforcement efforts do not match those required in regulations intended to prevent foodborne pathogens and unsafe foods. Food protection safety practices may not receive the proper diligence and oversight. Food safety practices differ from country to country, often due to culture. FSIS, the USDA Food Safety and Inspection Service involved with ensuring food safety, noted on at least six separate occasions in 2004, 2005, 2010 and 2013 that the PRC system has serious deficiencies in the poultry slaughter/food safety system. The deficiencies were found to be in six areas, two of which were corrected in 2015. Although the 2015 China Food Safety Law was passed and represents
Heavy Metals and Toxic Residue from Antibiotics Found in Poultry
When raised, if birds are treated with antibiotics inappropriately, there may be contaminants including heavy metals and antibiotic residue in poultry meat. The toxic residue can build up in tissues and persist in muscle, organs
Because of the lack of environmental regulations and respective oversight, water and soil
According to a 2016 media release with data attributed to the PRC Ministry of Water Resources, 70% of the Chinese population drinks water from underground sources, and 80.2% of this is unfit to drink. The underground wells supply water to farms, factories
While cooking poultry eradicates most bacteria and viruses including avian flu, in cases of cross-contamination with raw poultry or feathers or lack of proper cooking, these substances can cross the species barrier and potentially make humans ill.
What Does This Mean for the Food Supply Chain?
With 120 million hectares of farmland, China produces food for nearly 20% of the world’s population. Although the country itself is huge, the amount of arable land, land that can be ploughed and used to grow crops, is small. Only approximately 15% of the total land area can be cultivated. The amount of land that can be cultivated to grow food and the increasing Chinese population and dietary preferences are two of the forces driving change. Today the PRC is using land and agricultural reforms, technology to increase food production in small spaces, market controls and vast amounts of pesticides and fertilizer to boost food production and address supply shortages. Urban farm vertical agriculture “plant factories” have sprung up in an effort to use new techniques to grow higher quality foods in abundance.
The Chinese economy is undergoing rapid transformation. As it transitions from a manufacturing and construction led economy to a
With an expanding middle class and
Chinese consumers’ taste and food preferences are changing. As the economy has improved and the number of consumers and size of the middle class has increased, so has the appetite for fresh and imported foods. Food scares were covered by local TV stations and social media spread
Today’s Chinese consumer is more aware of food safety problems and is hesitant to trust the government about its reassurances. In the past few years, the Chinese government has executed a campaign to encourage its citizens to reduce intake of meat and unhealthy foods and eat more fruit and vegetables for better health. Within the middle class, it is a matter of status and wealth to adopt a Westernized diet. It is easy to see that the food supply chain in China has many challenges to overcome. Of these, the problem of food decay, the number one reason for food safety risks and
Cold Chain Logistics in China
As China continues to develop, its need for cold storage facilities and logistics will also increase. Today, cold chain logistics in China is still in the early stages of development. The Chinese government is motivated to invest heavily in food safety and health care programs and is advancing
Current estimates place the amount of perishable goods that are transported within China in refrigerated conditions at only 20%. The rate of spoilage for perishable goods is 20-30%. One of the primary reasons for food quality decline is temperature fluctuation during transport and storage. At this point, although there has been investment in cold chain logistics in China, it has failed to keep pace with demand. This is also complicated by the lack of supporting infrastructure. For example, major international air cargo gateways often lack cold chain facilities on site and airports that do have coolers are at or exceeding capacity. Cold chain logistics do not extend far beyond airport gateways.
Because of the shortage of cold chain capabilities, there are limitations on the volume of fresh food that can be shipped to China. Perishables that are shipped to China must be sold and consumed quickly to avoid spoilage and waste. Although the cold storage construction doubled in China each year from 2008 to 2012, considerable shortage of facilities remains. Cold storage warehouses tend to be concentrated more along coastal areas. 46% of the total storage capacity is situated in East China. The mid-west is the origin of the wholesale fresh produce market. Unfortunately, there is a shortage of refrigerated warehouses in this geographic area.
According to a survey conducted by the China Cold Chain Alliance, 58% of the cold storage warehouses were owned by
For perishable food produced in China, the lack of cold chain facilities has resulted in considerable loss of quality and quantity before the goods reach consumers. According to a report authored by Wang Wei, a Professor & Director of Meet Proceeding Key Lab. Of Sichuan Province and Faculty of Bio-industry of Chengdu University, 90% of meat products, 80% of aquatic products and most dairy and bean products are transported and sold without cold-chain assurance. The lack of cold chain facilities and logistics is one of the primary reasons for “food incidents” that occur periodically in China. According to this report, the cold chain adoption rate in China is approximately 15% with a post-production loss rate of 25-30%.
Food Supply Chain Traceability and Visibility Across the Globe Benefits Consumers
Food safety scares in the U.S., Europe
Food safety recalls are a matter of special focus for consumers and time is of the essence in getting products off the shelves before they affect human or pet health. Pair this concern with advances in technology and Smartphone use and there is both challenge and opportunity. Across the globe, there are Smartphone apps such as HarvestMark that enable consumers to have visibility into the origin and transport history of individual food purchases as well as of specific food items. The technology exists that can provide
Traceability and Food Safety Helped by Blockchain in China
In addition to the issue of food safety, food fraud has a significant impact on human and pet health. Some food products are especially at risk
Walmart China learned the lesson about the lack of accurate traceability in 2011 when the
Blockchain: The Basics
Blockchain is a technology that acts as a public electronic ledger. Broken down, a block is an unchangeable, time-stamped record of new transactions. Each time a block is completed, it is added to the chain. This creates a chain of blocks=a blockchain. While information on the blockchain is publicly available, it does not rely on a single computer or server to function, making transactions transparent. Every block either allows either an open or controlled set of users to participate in the specific ledger. A specific participant is linked to each block. When new data is entered, it can never be erased and blockchain can only be updated with the consensus of the participants in the blockchain system. The system is valuable because it provides an accurate, verifiable record of every transaction ever made in the system.
In blockchain, a peer-to-peer network, the blockchain users are the administrator and blockchain databases are managed autonomously for the interchange of information between various parties. “Smart contracts” can be created using blockchain networks.
Walmart has demonstrated their interest in blockchain by participating in trials and pilot studies. In 2016, IBM and Walmart collaborated on a blockchain trial to digitally track the movement of Chinese pork in the supply chain. Following the successful trial, Walmart indicated interest in accelerating the use of blockchain in China and promised to invest $25 million US by 2020 to encourage more technological innovation in Chinese food safety. The Chinese government is interested in improving traceability and food safety and with the tech-savvy Chinese consumers, blockchain seems to have potential to win over skeptical shoppers worried about the quality of domestically produced food products.
Following the successful trial with blockchain in tracing Chinese pork, the Walmart Vice President of Food Safety had his team trace a package of sliced mangoes back to its point of origin. This effort took 6 days, 18 hours and 26 minutes. Walmart wanted to compare this traditional method of traceability with blockchain. Walmart engaged with IBM, developer of a blockchain solution. Using its solution, IBM was able to trace the mango package in only 2.2 seconds.
In August 2017, a consortium of industry power players agreed to apply Blockchain technology to the challenge of enabling food traceability in China and improve food safety for consumers. IBM, Walmart, and Chinese retailer JD.com along with Tsinghua University National Engineering Laboratory for E-Commerce Technologies have formed a Blockchain Food Safety Alliance to improve the ability
In another pilot study, IBM and ten retailers including Dole, Nestle, Unilever, Driscoll’s, Golden State Foods, Kroger, McCormick and Company, McLane Company, Tyson Foods and Walmart.
Each participating company would be able to see where food products originated, handled, stored, inspected and every step in-transit to the store using distributed ledger technology (DLT). The companies were attracted to the concept of blockchain for its ability to maintain unchangeable, secure digital records and ability to improve the traceability of food products. An array of critical information can be stored on the blockchain including but not limited to: farm origins, factory data, expiration dates, storage temperatures, shipment and delivery date information, safety certifications of facilities and more. This project is also ongoing.
IBM blockchain uses Hyperledger Fabric, a Linux-based business blockchain framework with
Food safety awareness is central to consumers, supply chain companies
Different countries have different laws and regulatory systems. The U.S. federal government agencies work with other countries and monitor food products inbound to the United States. According to the FDA, although 2% of all imported food products are tested in a laboratory, other methods are used to identify potential risks. The FDA uses a risk-based screening tool named PREDICT to identify high-risk food items then decide if further action is needed. The FDA inspects facilities in foreign countries, however in limited numbers. According to the Government Accountability Office (GAO), the number of inspections were less than .5% of the 285,977 foreign food and feed facilities that are registered with the FDA. A 2015 GAO report on food safety found that the FDA has not been keeping pace with the number of inspections mandated, largely due to funding.
Consumers expect their food supply to be safe and healthy. Studies show that consumers want
New and emerging technologies including blockchain can play a vital role in enabling the flow of
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