Unscrambling the Fipronil eggs | Blockchain | Deloitte

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Unscrambling the Fipronil eggs

Blockchain Applications Blog Series

This past July, various media outlets across the Netherlands published the news that a large number of Dutch eggs on supermarket shelves could contain the toxin Fipronil. As is usual with food safety scares, there was much confusion as to the source and severity of the safety risk. Blockchain technology could provide a solution to food supply chain crises such as this one by ensuring transparency and traceability.

By Eline van der Mast | 02-11-2017

The situation

This past July, media outlets across the Netherlands published that due to illegal use of an insecticide used in cleaning chicken coops, large amounts of Dutch eggs on supermarket shelves were found to contain the toxin Fipronil. To prevent Fipronil from reaching consumers, the Netherlands Food and Consumer Product Safety Authority published the codes of the eggs that could contain the toxin and told consumers not to eat them. Millions of chickens and eggs were destroyed and the damages are estimated to be €33 million and counting. As was to be expected within our closely linked food systems, Fipronil has now also been found in eggs in twelve other European countries. As was also to be expected, the discussion on who should be held responsible and how to prevent this from happening in the future is currently in full swing. Now, Fipronil turned out to be pretty harmless, even if you eat dozens of eggs a day. However, there are enough examples of food safety issues that actually were deadly – such as in the 2011 case of the E.coli infected fenugreek, which killed over fifty people. The source of contamination was initially said to be cucumbers, tomatoes and peppers, leading to the destruction of 56 million kilos of safe food while fenugreek was still being sold in stores across Europe.

Lack of transparency

The root of the Fipronil scandal was one of simple misconduct – a pesticide against poultry red mite was used illegally in chicken coops. The resulting chaos is, at least in part, caused by a lack of transparency in the food chain. The egg travels through multiple players in the chain, each with its own method and standards for recording data. Now, the egg supply chain seems pretty straightforward, but if we consider all the inputs before the laying, including for example cleaning material for the coops, the supply chain becomes a lot more complex. Ideally, all data pertaining to an egg’s journey to your plate would be available to you as a consumer: Imagine scanning an egg’s QR code and getting all the information you could want, such as where it’s been and which inputs went into making it. This would mean all supply chain players recorded their data on the same database, in the same format, and that the information couldn’t be tampered with once entered.  

How can blockchain be applied?

One way to achieve this is through blockchain technology. Originally the technology behind the digital currency Bitcoin, blockchain is now being explored by many companies as a facilitating mechanism for trusted transactions. The blockchain records timestamped transactions on a ledger that is distributed among many users, and will only allow for transactions to take place that have been verified by a majority of the network. This principle ensures both traceability and immutability of each registered activity.

As transparency, immutable records, and traceability are often lacking in the information concerning our food systems, it is understandable that blockchain is looked to as a possible solution. If we have trustworthy records of the history of our food and its whereabouts, it is easier to trace potentially contaminated foods in situations like this and to issue targeted warnings and recalls. Of course, tracking products using a central database is something many companies, and groups of cooperating companies, already do. The added value of blockchain is the combination of having a distributed ledger, which cannot be tampered with, used by various players that may have conflicting interests. Besides, blockchain would force them to record their data in a uniform way and ensure that every additional piece of data added to, say, an egg’s record, contains all previous pieces of data as well. A blockchain can’t determine what is making people sick. What it can do is help to locate the source of contamination and location of contaminated foods more quickly.

Challenges

However, food items pose a specific challenge when it comes to recording them on the blockchain. Blockchain is a digital technology, and to digitally represent a physical item, some sort of connection must be made, by using for example a barcode, an RFID chip or a QR code. Let’s go back to our original issue, the Fipronil eggs. In Europe, each individual egg is given a code that specifies the coop it was laid in (and thus also the country and farm). This makes eggs unique in their traceability options: their shells allow for them to be coded directly on their smallest “unit”. Besides, eggs are very straightforward: they are not mixed and packaged as many other foods, and it comes in its own natural packaging. But what about commodities like grain, or more complex, processed foods – like mayonnaise, cake or cookies?

There are other challenges besides the prerequisite to link the physical and digital worlds, making blockchain a promising solution for the future, but not yet a tailor-made solution for today. Public blockchain networks aren’t built for very large numbers of transactions, and become very slow when usage spikes. As the quantities that go through our food systems are enormous, the public blockchains we have now wouldn’t be a working solution, especially when a food crisis would likely lead to a temporary spike in usage. Faster blockchain solutions are currently being worked on, but are still in the test phase.

Beyond the challenges

Thinking beyond these challenges; however, the multi-party and thus supply chain-wide, tamperproof traceability options provided by blockchain are promising and there are already working examples. In the near future, it has the possibility to increase transparency, traceability and trustworthiness. The more information that is put on the blockchain, the more transparent our supply chains become: Imagine if not only an egg’s journey from producer to retailer is known, but also the inputs used by its producer and who supplied them, and who supplied the suppliers, and with which products. In a fully digitally integrated system, this wouldn’t just provide full transparency to enable recalls, but also act preventively. Further down the road, blockchain could be a vital part of a much larger digital infrastructure enabling our food supply chains. In combination with other technologies, such as Internet of Things applications, we wouldn’t have to scan an egg in our fridge to see if it contains Fipronil. We could have our smart fridge warning us that our eggs, mayonnaise or chocolate mousse is possibly contaminated or out of date. While we would then as a society need to decide whether to keep our eggs and egg products in the fridge or not (or have smart cupboards as well), it’s an exciting thought.

More information?

For more information about blockchain applications, please contact Jacob Boersma via jboersma@deloitte.nl / +31882882069.

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