Fighting Global Hunger with Blockchain Technology
This Sunday, October 16th, marks World Food Day – a day dedicated to bringing awareness to global hunger issues and initiatives. On this day, 150 countries come together and take action to help those who go hungry and ensure that healthy diets are accessible to all.
In this article, Accredify provides an overview of the current state of global hunger and explores how tamper-proof information and blockchain technology can address existing hunger issues.
The state of global hunger in 2022
Up until 2015, reports from The Food and Agriculture Organization of the United Nations (FAO) showed a steady decline in the number of hungry people in the world with numbers dropping from an estimated 1 billion in 1990 to 795 million in 2015.
However, since then, the trend has backpedalled, and global hunger is now worsening once again. The latest numbers report that as many as 828 million went hungry in 2021 – an increase of 46 million from 2020, and 150 million more than in 2019.
3 key factors in the escalating global hunger crisis (FAO):
1. The COVID-19 pandemic
COVID-19 has highlighted the inequalities in our societies and the fragilities in our agrifood systems – escalating global hunger and food insecurity.
FAO defines food insecurity as when people “lack regular access to enough safe and nutritious food for normal growth and development and an active and healthy life”, and has four levels of severity.
There are currently an estimated 2.3 billion (29.3%) people in the world who experience moderate to severe food insecurity. This is a steep increase of 350 million people since before the pandemic (WHO).
2. The ongoing Ukraine war
The war in Ukraine is exacerbating the crisis. Consequences of the war, such as disrupted food supply chains, and the increasing prices of grains, fertiliser and energy have worsened the food insecurity and hunger problem by causing high inflation globally.
ReliefWeb has reported that the ongoing war in Ukraine has sparked the 3rd global food price crisis in 15 years. The effects of this are devastating, as existing food supply challenges in poorer nations have become aggravated to an extent that these nations may now potentially be grappling with a food crisis that can persist for years.
3. Climate change
As we experience more frequent and severe extreme climate events like floods and droughts, food supply chains, especially in low-income countries, are getting increasingly disrupted (FAO).
The effects of climate change also pose a risk to the end consumer. Climate change has resulted in more diseases becoming present in plant and animal produce (National Library of Medicine), which puts end consumers at greater risk of lowered food security and higher degrees of undernourishment.
How is blockchain technology relevant to
Using blockchain for information sharing offers a Single Source of Truth. This is particularly useful for processes involving many parties as it makes previously siloed information easily accessible to all involved. An example of this is using blockchain technology to track food supply chains to gain insights into food handling and provenance information.
Learn more about how blockchain enables the storage of verifiable true-to-source information in our explainer article here!
Studies on the causes of hunger issues show that it is factors like food waste and loss, poverty and inequality, and uneven distribution and resource management that are the biggest culprits – not a lack of food resources. In fact, we actually have enough food in the world to feed 10 billion people.
Considering this, optimising processes, workflows, and resource distribution with blockchain technology can be effective approaches in fighting global hunger issues.
How can blockchain technology provide
solutions for global hunger?
Due to its versatile nature, there are many ways that blockchain technology can be applied to issues affecting global hunger. In this article, we will be exploring two of the key focus areas – transparency in the food supply chain and getting aid straight to recipients with digital wallets.
1. Transparency in the food supply chain
Food supply chains are very fragmented, with many disparate stakeholders fulfilling different roles throughout the supply chain. These stakeholders have their own information processing systems, which often results in in the creation of siloed information that is not portable. This results in a lack of data traceability, as there are data gaps between each stakeholder within the supply chain that cannot be bridged easily, creating issues down the supply chain, such as when stakeholders try to validate provenance information about a specific food item.
Blockchain technology enables unprecedented visibility into food supply chains. With the use of verifiable data in instantly verifiable, portable formats, stored on a public ledger that is accessible by all, issues such as siloed information and data gaps between food supply chain stakeholders, mentioned above, can be effectively addressed.
Learn more about how blockchains can secure provenance information in our article on blockchain applications in the sustainability space here!
For example. by implementing blockchain technology in the management of food supply chains, all provenance information that is recorded from the different players becomes available in one publicly accessible ledger (the blockchain). This application of blockchain technology offers a means to provide a chronological overview of a food product’s entire provenance information, such as its origin, production location, storage conditions and more.
In addition, since information stored on the blockchain is tamper-proof, blockchain applications provide an authentic, true-to-source overview of the food product’s journey through the food supply chain. In essence, verifiable data backed by blockchain technology serves as a Single Source of Truth for the food product. These true-to-source data insights can then inform solutions that alleviate food hunger, for example, those that limit food waste and loss, improve food safety and reduce instances of food fraud.
Some ways that blockchain technology can improve transparency, trust, and security in the food supply chain include:
- Improved product supply chain visibility and traceability
- Digital, verifiable contracts between trading partners
- Improved product data security, and
- Food supply chain disintermediation
“[Blockchain] technology enables systems to be checked for food fraud and product tampering instantaneously, permits the identification and classification of product waste within supply chains, can rapidly identify food contamination issues, aiding in rapid product recalls, and can improve transit security, thereby reducing food spoilage.”– (Michigan State University)
The graphic below shows how information can be recorded on a blockchain ledger in a typical food supply chain:
Sources: CBInsights, Kamilaris, Fonts, Prenafeta-Boldύ
Many food companies have already made the transition to blockchain in order to track particular parts of their supply chains. For example, Unilever and Nestlé have both used blockchain technology to improve ingredient traceability for some of their products, making it easier to ensure that their ingredients come from responsible sources. Walmart has also adopted the technology, using blockchain to improve its food security and enable easy tracing of food contamination sources.
Potential application 1: Limiting food waste and food loss with supply chain transparency
According to estimations by WWF and Tesco, around 2.5 billion tonnes of food goes uneaten yearly – 42% of which is fruits and vegetables. Tragically, reports show that all of the hungry people in the world could have been fed with less than a quarter of the food wasted in the US and Europe.
Food waste and food loss can happen for numerous reasons and at all points in the food supply chain, e.g. freshness degradation during storage and transportation. Case in point: research has shown that India wastes a staggering 21 million tonnes of wheat every year due to inadequate storage and distribution – equivalent to Australia’s entire production.
To improve this, adapting blockchain technology to track food supply chains will provide food companies with visibility on when and where the food is wasted in the supply chain, enabling targeted process optimisation to reduce future food waste.
For example, with true-to-source, portable information enabled by blockchain technology, stakeholders across supply chains would be able to better foster coordination and facilitation so that transport, storage, and distribution processes line up. This can create greater efficiency in food transport and reduces food lost to process inefficiencies. With tamper-proof information from the supply chain stored on the blockchain ledger, food companies also save time on manual document handling, improving supply chain inefficiencies that can lead to excessive food waste.
Potential application 2: Improving food safety with supply chain transparency
By recording information onto the blockchain, retailers and end consumers can access true-to-source provenance information on a food product. This way, they can verify that the food product is safe to eat, and food companies can easily trace any food contamination back to the source – saving resources for companies and improving food safety for end consumers.
For retailers, information like storage temperature during transportation adds valuable insights for the detection of whether the food they receive from their suppliers is safe to eat, or if there is a high risk of contamination due to food being exposed to too high or low temperatures during transportation.
Implementing blockchain technology in food supply chains can also enable a stronger sense of accountability for the different parties in the supply chain, reducing the risk of food fraud as the information transparency makes it easier for regulators to spot and fine parties that do not adhere to laws and regulations.
2. Getting aid straight to the recipients with digital wallets
Food vouchers and cash transfers are both important parts of international aid. As such, another way to use blockchain to fight global hunger issues is through Cash Based Transfers (CBT) and vouchers administered through digital wallets.
The UN World Food Program’s (WFP) Building Blocks pilot did just this to make cash transfers more efficient, secure and transparent, by using blockchain instead of banks to transfer funds to their CBT recipients.
As explained by Robert Opp, ex-Director of Innovation and Change Management Division at WFP, this is what the process of getting aid to recipients typically looks like:
1. Organisations collate a list of all eligible aid recipients
2. The list gets shared with a local bank
3. The organisation pays the bank a big sum for the recipients’ transactions upfront
4. The bank creates wallets for all recipients at the retailers
5. The recipients use their received funds or vouchers
6. The organisation gets a report from the bank at the end of the month
By replacing this process with a blockchain, organisations no longer need to use the banks as a middleman. Instead, the new process looks like this:
1. Organisations register their eligible aid recipients directly on the blockchain
2. The organisation creates virtual wallets for all aid recipients
3. The recipients use their received funds or vouchers at the retailers
4. All transactions are recorded onto the blockchain, giving organisations direct insights to monitor the data
5. The organisations settle payments with the retailers at the end of the month
Using blockchain technology for CBT aid helps organisations reduce transaction costs, and enable more secure transactions and inter-agency operability without the need to share beneficiaries’ data (WFP). This process is efficient for resource management and enables people in need of aid to afford food where they are – contributing to the overall goal of decreasing global hunger and food insecurity.
Conclusion and resources
With 828 million hungry people in the world and 2.5 billion tonnes of food wasted or lost yearly, optimising processes in the food supply chain can have a significant impact on specific issues escalating the hunger crisis that are within control. Blockchain technology can offer trust, efficiency, security, and insights to these processes in a way that other systems typically cannot deliver, by enabling the transparent sharing of true-to-source information.
While the hunger crisis calls for policy changes and better regulations to help with the biggest structural issues, applying blockchain solutions to food supply chains and resource distribution processes can play a key role in boosting distribution efficiency, improving resource management, and preventing excessive food waste.
With greater information transparency and traceability enabled by blockchain technology, governments and corporations will be better empowered to manage food supply chains. By being able to accurately and effortlessly identify players that do not adhere to regulations and/or best practices, as well as for providing misinformation typical of food fraud, what was once difficult to do – holding various food supply chain players accountable – has now become much easier.
Many companies have already made the change over to blockchain, with many more expected to follow. This is just the first step to prevent further escalation of the hunger crisis, but an important one to ensure safe and efficient distribution of food and aid, from farm to fork.
Now is the time to take action and make real changes that create an impact.
Sources to learn more about the global hunger crisis and how blockchain technology can help:
- Glossary and latest numbers on global hunger
- WFP Live Hunger Map
- FAO: Moving forward on food loss and waste reduction
- FAO: Repurposing food and policies to make healthy diets more affordable
- Blockchain technology in the food industry
- ‘What is ‘blockchain’ and how is it connected to fighting hunger?’
- ‘How blockchain can be used to address food security in India’
- How WFP uses blockchain to deliver cash transfers directly to Syrian refugees
- Using blockchain to build trust in food supply chains