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Blockchain technology: eHarvestHub plans to make traceability more lucrative for farmers
27 Apr 2018 --- IT start-up eHarvestHub, backed by well-known American venture capital investor billionaire businessman Tim Draper, is introducing game-changing blockchain technology that could potentially disrupt the food chain, giving much more power to farmers by helping them to leverage lucrative returns from complying with traceability requirements. For many small farmers, adhering to traceability specifications can be difficult, time-consuming and not very lucrative. Complying with traceability requirements is often just another chore – and one that does not increase their profits or lower costs – according to eHarvestHub.
The California-based start-up is stepping into this space on a mission to disrupt the food chain. eHarvestHub is introducing a revolutionary new food distribution system based on blockchain technology. The company wants to make it easier and more lucrative for farmers to get their food to market, while at the same time easing farmers’ traceability compliance burden and making food origins much more transparent. How does it work? The blockchain technology underpinning eHarvestHub allows farmers, grocers and truck drivers to connect directly, cutting out the middleman, driving down costs and cutting waste because of more efficient distribution. It promises to revolutionize the farm-to-consumer food-supply chain by cutting the cost of food to consumers, boosting prices to hard-pressed small farmers, and minimizing food waste. eHarvestHub is a decentralized Fresh Food Marketplace that enables small farmers to sell directly to grocers from around the world – cutting out the many layers of mediators that push up the price of groceries and pocket the lion’s share of fresh food profits. eHarvestHub is backed by Tim Draper’s VenturesLab Fund, the billionaire that bought Silk Road's seized bitcoins from the US Government. Silk Road was best known as a platform that used cryptocurrency and was used for selling illegal drugs as part of the dark web and after it was taken down by the FBI in 2013, the Bitcoins were sold at auction to Draper. Currently, many farmers around the world have to deal with a complex food chain, often facing financial struggles because, within the system, they make the least profit. At times, small farmers struggle to compete in a marketplace which is dominated by big business, retailers and middlemen. Similarly, the independent owner/operator truckers who move the majority of farmers’ production also face the same sorts of difficulties and can feel isolated from the global food economy as big food conglomerates control the supply chain because they can aggregate and arrange transport for food. It’s these types of multi-layers, eHarvestHub argues, that lead to consumers having little or no transparency about where their food comes from, while fraudulent food labeling is difficult to prevent as products from less desirable sources can be so easily added to the safe product as it moves through the supply chain. On top of this, and the nature of the complex journey that food takes, waste costs the industry dearly. “The supply chain needs a radical change. It needs to be turned upside down. You must take care of the farmer and trucker first to radically decentralize the food chain,” says eHarvestHub Founder and CEO Alvaro Ramirez. “Blockchain is the perfect tech to change the food industry. In fact, it’s the only technology that can truly change the industry.” eHarvestHub claims it can provide a much smoother journey and addresses these problems by bringing farmers, grocers and truckers together in a virtual marketplace. The marketplace allows farmers to list their fresh produce and aggregates volume across multiple small farmers. Essentially this gives grocers one location to shop from and still meet their volume demand. And at the heart of this marketplace is blockchain technology.
By using this, eHarvestHub claims that third parties are no longer needed to negotiate prices, organize distribution or agree on transportation. After their food is sold, farmers can directly hire independent owner/operator truckers, much like UBER does with passengers and drivers. Meanwhile, grocers have direct access to a farmer’s inventory when sourcing fresh produce, while truckers have a mobile app through which they can directly access loads without having to spend money or time on marketing. They get the opportunity to grow their business without the need of a broker, says eHarvest Hub. Transparency improvements Blockchain’s timestamping of each event will help prevent food fraud by recording each party’s activities and making accessible all their required documentation. Timestamping also helps to forecast pickups and delivery times accurately. This digital footprint provides grocers with the data they need to give consumers full transparency of their foods and quickly minimize the impact of contaminated fresh produce in the event of a foodborne illness outbreak.
This is one of the latest examples of how blockchain technology is being applied to the food industry. FoodIngredientsFirst has been following some of the companies introducing new ways to use this emerging technology, hailed by many as game-changing. “Blockchain” is one of the buzzwords of 2018, with the enormous hype around the benefits that this technology can offer. Early food sector adopters can undoubtedly take advantage of implementing blockchain too, particularly when it comes to traceability. Blockchain technology is a distributed governance system through a peer to peer network that offers validation of transactions in a decentralized way. It builds upon information technology developments in data sharing and storage, innovations in algorithms and cryptography and understanding of behavioral and institutional economic arrangements. A Rabobank report claims that blockchain triggers a disruption in the food value chain and says that companies that want to remain successful in the future food value chain should start to explore options for participating in blockchain initiatives. And in January, INS founder and CEO and former founder of Instamart, the largest venture-backed online grocery delivery operator in Russia, Peter Fedchenkov, spoke with FoodIngredientsFirst about the game-changing INS Platform and the potential for disruption in retail. He said that INS Ecosystem, the platform that enables consumers to buy groceries directly from manufacturers at lower prices with convenience, has received significant interest from some of the world’s largest food manufacturers. Aviko, Dubro, Zijerveld (acquired by FrieslandCampina in 2013), Bake Five, 2 Sisters Storteboom, Gulden Krakeling, Henri to name a few have already signed non-binding memorandums, plus a whole host of other partnerships are in the pipeline. By Gaynor Selby
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