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Chinese wooed to invest in Pak Food Industry

Fauji Foods Limited (FFL) had announced its appointment of Lazard Saudi Arabia as its foremost financial advisor, Riaz Ahmad & Company as Chartered Accountants and Cheema & Ibrahim as their legal advisor on the Expression of Interest (Eol) they received from Inner Mongolia Yili Industrial Group Co. Ltd for purchasing 51 percent of the company shares.

Inner Mongolia Yili Industrial Group Co. Ltd., a state-owned company in China, is principally involved in the processing, production, and distribution of dairy products and mixed foodstuffs in both China and the world, according to Reuters. The company sells powdered milk, liquid milk ice cream and yogurt alongside dairy tablets; milk tea powder and soybean milk powder.

“Inner Mongolia Yili Industrial Group outsourced its operations first in New Zealand by setting up a processing plant in 2014.”

Fauji Foods Limited on the other hand processes and offers milk powder, fruit shakes, toned milk, and other food products in Pakistan. Among its more notable products are buttermilk, pasteurized milk, flavored milk, UHT milk, butter, and various refined dairy products, including skimmed and cheeses, UHT cream, and full cream milk powder.

By late July this year, Inner Mongolia Yili Industrial Group Co (Yili) had already come forth with a willingness to acquire a 51 percent stake in the Fauji Foods. CitiBank had also been appointed as the broker for the acquisition offer submitted by Inner Mongolia Yili Industrial Group.

Yili’s delegation of senior level management–while visiting the head office of FFL– appreciated the state of the art plant of the company and conducted market research on setting up an ice cream and milk powder plant in Pakistan in collaboration with FFL.

“Yili had begun as a small dairy-product processing company in Inner Mongolia in 1993.”

This transaction between Yili and FFL will be the second major acquisition by a foreign firm in Pakistan’s food sector. Earlier, a Dutch company ‘Royal Friesland Campina NV’ had gained an acquisition of 51% in Engro Foods shares during December of 2016 with an investment of around $460million; the largest private sector takeover by a foreign firm in the country’s history.

Inner Mongolia Yili Industrial Group outsourced its operations first in New Zealand by setting up a processing plant in 2014. It remains one of the largest dairy products manufacturers in Asia and ranks as the eighth largest globally.

It markets its products under the Nurpur brand. The company was formerly known as Noon Pakistan Limited and changed its name to Fauji Foods Limited in June 2016. Fauji Foods came into ownership of the majority of Noon Pakistan’s shares and invested Rs7 billion in expanding its production capacity from 100,000 liters a day to 600,000 liters a day, according to Bloomberg.

Yili had begun as a small dairy-product processing company in Inner Mongolia in 1993. Now a dairy giant, Yili has worked with Italian dairy baron; Sterilgarda Alimenti as well as with the European Research and Development Centre in the Netherlands, the first time an overseas entity entertained a Chinese firm.

source: www.globalvillagespace.com

Govt. plans to modernize milk and meat industry for boosting output

Last Sunday United Business Group (UBG) leader Daroo Khan Achakzai reiterated the Prime Minister’s wish to revamp Pakistan’s agricultural sector. Achakzai who was a candidate for President of the Federation of Pakistan Chambers of Commerce & Industry’s (FPCCI) stated that the livestock sector held much-untapped potential and its efficiency should be expanded to fulfill a growing demand for milk and meat.

While highlighting the prospective production expected from the livestock industry, Achakzai mentioned that so far the industry has progressed on its own and is in need of proper support from the authorities. He said that the government ought to focus on what is one of Pakistan’s oldest and largest economic sectors for increasing productivity.

The agricultural sector remains one of the sole reasons why Pakistan has survived despite being predominantly informal in nature. In terms of its production especially that of the livestock sub-sector, a lot more needs to be done in order to bring it up to the mark.

“Pakistan’s textile industry accounts for another large fraction of its exports, so the added improvement for tanneries could be a proverbial cherry on top”

The majority of livestock farmers live in rural and undeveloped conditions of illiteracy and poverty, Achakzai further added. The needs of those dairy farmers seldom reach the government while the government itself has only scarcely stepped in to emancipate farmers who not only occupy a majority in the largely agrarian country but are the main source of income in the agrarian economy. Main attention is to be placed on the production of milk, meat, and hides to lower domestic prices and generate foreign revenue. Pakistan is currently ranked as the world’s fifth largest producer of milk but in terms of milk produced per animal, the numbers are abysmally low which due to lack of modern techniques and outdated technologies. Achakzai also added that Pakistan can easily improve its numbers to become a top producer and exporter of milk and meat globally.

Pakistan is currently ranked as the world’s fifth largest producer of milk but in terms of milk produced per animal, the numbers are abysmally low which due to lack of modern techniques and outdated technologies. Achakzai also added that Pakistan can easily improve its numbers to become a top producer and exporter of milk and meat globally..

However various small steps are needed the surplus benefit being a boost in the leather sector. Pakistan’s textile industry accounts for another large fraction of its exports, so the added improvement for tanneries could be a proverbial cherry on top.

Dairy and livestock are one of the most basic sub-sectors in agriculture especially in a country that has not diversified its agriculture base with the times. Even with the odds against it, this subsector undergoes a steady growth of 3 to 4 % per annum minus government programs which are very rare and concentrated.

“Not only is demand growing but currency inflation and price hikes have forced the government to play on its strengths in order to improve the economic situation of the country.”

Pakistan’s agriculture quality is in-demand worldwide for which most of its prime goods are exported but with the widening gap between supply and demand steps are being taken to reinvigorate this vital part of the economy, said the UBG leader.

Earlier Chief Minister for Punjab – Pakistan’s major agriculturally relevant province – the price had reached out to Australian authorities for undertaking foreign investments like they have in the various Gulf States. IN a meeting held last week between the CM and the Australian High Commissioner mutual cooperation in healthcare, education, livestock, skills-development, water-management and tourism sectors were discussed.
The improved law and order situation in the country is seen as a positive sign as the government vows to be cooperative in providing the appropriate atmosphere for capacity-building and technical training in the agricultural sector. Not only is demand growing but currency inflation and price hikes have forced the government to play on its strengths in order to improve the economic situation of the country.s

Source: www.globalvillagespace.com

Pakistan seeks Belarusian technologies for dairy sector

ISLAMABAD: Pakistan on Wednesday sought Belarusian technologies to improve milk processing and dairy production as a next step to the bilateral agreements signed three-year back to initiate agriculture technology projects.

“Pakistan is a big producer of dairy milk but (due to) the lack of technological advancements the desired results could not be attained,” Federal Minister National Food Security and Research Sahibzada Mehboob Sultan said.

“It is quite intriguing that Republic of Belarus has ultra modern milk processing and dairy production technologies hence Pakistan could start joint ventures and make use of Belarusian technologies.”

The Ambassador of Belarus to Pakistan Andrei Ermolovich along with scientists and members Ministry of Agriculture Belarus called on Minister Sultan, an official statement said.

Pakistan and Belarus signed memoranda of understanding and intention were signed in 2015. The basic purpose was to promote mutual cooperation in the field of agro technology and research in areas identified mutually by both the governments: scientific cooperation and research, exchange of agro machinery and research in the field of cattle farming.

The joint working group (JWG) was also formulated to make progress in the identified areas. So far four sessions of JWG took place, while the fifth session is expected to be held during the first quarter of next year.

Food minister said both the countries had identified almost 18 areas where the exchange of technologies could take place.

“We are eager to take it to the next level and start the projects jointly to get to that end,” he said.

The areas were dubbed as vital for the uplift of farmers and agriculture. They include cattle breeding through advanced technological assistance and cooperation in genetic engineering, research in dairy production and processing, improvement of productive qualities of beef cattle and veterinary vaccine development.

“All these proposed areas/projects go parallel with the incumbent government’s vision about agro development in the country,” Sultan said. “We focus on increase in mutual turnover of agriculture goods.”

The minister further said Belarusian machinery especially tractors are very famous in the country and in the last meeting the ambassador showed his interest to expand the scope of trade in the area and “we are ready to negotiate on those matters as well”.

“Both the countries could work on harmonisation of veterinary standards,” he added.

The minister expressed his satisfaction over the projects to be initiated in the light of proposals from the joint working group and assured that the ministry of food security would rigorously follow the process and bring it to fruition.

A considerable progress for the mutual venture has been made and sound proposals for cooperation in the areas of animal science, farm machinery and biotechnology along with relevant focal persons and institutions from both the sides have been finalised.

“The development of projects on the finalised proposal is also under process,” the statement added. “The purpose of current visit of scientists from National Academy of Sciences Belarus is to finalise the projects and discuss the implementation mechanism as well.”

The officials told the federal minister that Belarusian Agriculture Minister considers the collaboration very important and invited Pakistani officials to attend the international agro conference to be held in Belarus next year.

Source: www.thenews.com.pk

Pakistani Food Exports Increase 16.81 Pc In First Half Of FY2018, 31.19pc In December

ISLAMABAD, (UrduPoint / Pakistan Point News – 28th Jan, 2018 ):Food exports from the country witnessed an impressive growth of 16.81 during the first half of the current fiscal year compared to the corresponding period of last year.

The food exports rose to $1,932,269 million during July-December (2017-18) against the exports of $1,654,245 million during July-December (2016-17), according to latest data of Pakistan Bureau of Statistics (PBS).

The commodities that contributed in overall food trade from the country included rice exports of which grew by 18.32 percent from $712,832 million last year to $843,388 million during the current year.

Among rice commodities, the exports of basmati rice increased by 4.52 percent while that of other rice commodities increased by 22.88 percent. The exports of fish and fish preparations from the country also increased by 9.

08 percent by growing from $183,446 million to $200,097 million while the exports of vegetables increased by 6.52 percent, from $58,871 million to $62,709 million.

During the period under review, the tobacco exports from the country increased from $3,991 million to $20,625 million, showing growth of 416.

79 percent while the wheat exports witnessed increase of 100 percent percent by going up from zero exports to $0.045 million. Exports of oil, seeds, nuts and kernals increased by 10.35 percent from $20,243 million to $22,339 million while sugar exports also increased from zero exports last year to $181,209 million, showing 100 percent growth.

Meanwhile, the food products that witnessed negative growth in trade included fruits, exports of which declined from $198,143 million to $180,288 million, showing 9.01 decline while the exports of leguminous vegetable (pulses) decreased by 100 percent .

Exports of spics from the country also decreased from $37,478 million to $36,421 million, showing decrease of 2.82 million while the exports of meat and meat preparations decreased by 6.21 percent, from $104,401 million to $97,915 million.

Other than these commodities, the exports of all other food products also witnessed decline of 14.08 percent by falling from $334,312 million last year to $287,233 million this year. Meanwhile, on year-on-year basis, the food exports from the country witnessed 31.

18 percent growth during the month of December 2017 compared to the same month of last year. The food exports during December 2017 were recorded at $439,285 million against the exports of $334,860 million last December, according to the PBS data.

On month-on-month basis, the food exports from the country also witnessed increase of 4.92 percent in December 2017 when compared to the exports of $418,697 million in November 2017, the data revealed.

Source: www.urdupoint.com

Pakistan, Saudi Arabia agree to improve human resource, food exports

ISLAMABAD: Pakistan and Saudi Arab on Wednesday agreed to set up a working group to promote food exports and training centre to meet job market needs in the Arab country.

The decisions were taken in a high-level 11th Pak-Saudi joint-ministerial commission meeting in which Prime Minister Shahid Khaqan Abbasi met with Saudi’s Minister of Commerce and Investment Majed Abdullah Al-Qasabi.

Al-Qasabi, leading a 35-member Saudi delegation, was on a visit to Pakistan to attend the commission’s meeting.

The decisions, taken during the meeting, include establishment of a working group for export of halal food from Pakistan to Saudi Arabia, Saudi investment in the construction of the South-North gas pipeline, accelerated negotiations on a bilateral investment treaty and exchange of parliamentary delegations. “Pakistani side stressed the importance of cooperation between Saudi oil and gas companies to develop oil production in Pakistan including setting up of refineries,” the statement added.

Both sides also agreed to expedite negotiations to finalise a memorandum of understanding between central banks of two countries. “The Prime Minister welcomed the holding of 11th session of Pak-Saudi joint ministerial commission, which is expected to enhance and strengthen bilateral economic relations,” a government statement said. “In the context of export of Pakistani manpower to Saudi Arabia, the Saudi side agreed to set up a training institute in Pakistan to help meet its human resource requirements.”

The meeting told that there is a Saudi royal decree to establish labor Attache in Pakistan and one of the mandates of this attachee is to approve the labor training centers to train manpower in accordance with the Saudi requirements.

More than 9.6 million Pakistani workers are based in foreign countries and of which over 96 percent live in Gulf Cooperation Council’s member countries, according to Bureau of Emigration and Overseas Employment’s website.

Saudi Arab is the key destination for overseas Pakistanis, contributing around six billion dollars in remittances, approximately 30 percent of total remittances. The export of overseas workers to oil producing Middle East countries has been declining for the couple of years.

A delegation from the Ministry of Overseas Pakistanis and Human Resource Development is scheduled to visit Saudi Arabia early next week.

“The Saudi side also agreed to visa relaxation and reduction in visa fees for Pakistanis,” the statement added.

Besides, most of the Middle Eastern Muslim economies import halal food from Australia, Brazil and other non-Muslim countries. Halal food can take the country’s exports to new heights in global halal food market of $300 billion. Al-Qasabi, in the ministerial meeting, emphasised the importance attached by Saudi Arabia to the special relationship with Pakistan.

“During the two day session, meetings were held between the experts of the two sides on a number of issues, especially focusing on trade, commerce, energy, consular affairs, education, health and other matters of mutual interest,” another statement said. “Both sides agreed to hold exhibitions of new products in each other’s countries. First single country exhibition of Pakistan in Saudi Arabia will be held in the second half of 2018,” it added.

Pakistan and Saudi Arab agreed to review and simplify the procedure of business visa issuance and rationalise business visa fee. The commission called for reactivating Pak-Saudi Joint Business Council by first quarter of 2018 followed by the first meeting of the council. A commercial attache will soon be designated in Saudi Embassy in Islamabad.

It was agreed to increase cooperation in science and technology and exchange of research expertise.

Pakistan offered Saudi civil aviation training courses at Civil Aviation Training Institute, Hyderabad in the field of air traffic control, communication, navigation and surveillance engineering and aviation management. Both the sides also agreed to nominate the focal persons from both sides for cooperation in the fields of trade, energy, investment, education and agriculture sectors.

Source: www.thenews.com.pk

Teenagers spend most of their budget on fast food

ISLAMABAD: Teenagers are spending the biggest chunk of their ‘budget’ on eating out in fast food restaurants with their friends and colleagues in the twin cities of Islamabad and Rawalpindi, according to a report aired by a private news channel on Saturday.

As the fast food business flourishes all over the country, school-children, college and university students, as well as young employees, are opting to have their lunch at restaurants that sell junk food.

In a habit that was once only associated with the upper middle class or the elite in Pakistan, dining out has become part of a new ‘urban culture’.

With the changing habits of our youth, people have also witnessed a boom in the food business, as international fast food chains set up shop across the country.

The change started in the late 1990s, when people from every class, especially young girls and boys, were to be seen at eating spots almost daily, the report reveals.

The social media revolution has also had an impact on the eating habits of millennials, as many ‘online profiles’ are used for uploading pictures in which young people can be seen hanging out, or having a meal, with their friends.

“Almost every restaurant in the twin cities is filled to capacity all day, every day. This signifies the overpowering likeness people have for fast food in Pakistan,” the report observed.

Ayesha Ahmad, an 18-year-old studying at a local institute, told a reporter that she believes exam week is generally considered the most stressful period for a student during a school year, and that is when they feel the need to relax by having a good meal at their favourite restaurant.

Another teen, Yusra Azam says, “I love to go out for lunch with my ‘besties’ because the taste of restaurant food is so good.”

Fast food and the immune system

A recent study at the University of Bonn in Germany detailed that fast food makes the immune system more aggressive in the long term, and even after a change to a healthy diet, the body’s defenses remain hyperactive. These long-term changes may be involved in the development of arteriosclerosis and diabetes, diseases linked to Western diet consumption. A previous study said that consumption of fast foods more than three times a week was significantly higher among asthmatics.

The scientists placed mice for a month on a so-called “Western diet”: high in fat, high in sugar, and low in fibre. The animals consequently developed a strong inflammatory response throughout the body, almost like after infection with dangerous bacteria. “The unhealthy diet led to an unexpected increase in the number of certain immune cells in the blood of the mice, especially granulocytes and monocytes. This was an indication of an involvement of immune cell progenitors in the bone marrow,” Anette Christ, a postdoctoral fellow in the Institute of Innate Immunity of the University of Bonn explains.

Fast food thus causes the body to quickly recruit a huge and powerful army. When the researchers offered the rodents their typical cereal diet for another four weeks, the acute inflammation disappeared. What did not disappear was the genetic reprogramming of the immune cells and their precursors: Even after these four weeks, many of the genes that had been switched on during the fast food phase were still active.

“It has only recently been discovered that the innate immune system has a form of memory”, explained Professor Dr Eicke Latz. “After an infection, the body’s defenses remain in a kind of alarm state, so that they can respond more quickly to a new attack.” Experts call this “innate immune training”. In the mice, this process was not triggered by a bacterium, but by an unhealthy diet.

The scientists were further able to identify the responsible “fast food sensor” in immune cells. They examined blood cells from 120 subjects. In some of the subjects, the innate immune system showed a particularly strong training effect. In these subjects, the researchers found genetic evidence of the involvement of a so-called inflammasome.

Inflammasomes are key intracellular signalling complexes that recognise infectious agents and other harmful substances and subsequently release highly inflammatory messengers.

Unhealthy eating causes some of the normally hidden pieces of DNA to unwind, similar to a loop hanging out of a ball of wool. This area of the genetic material can then be read much easier as long as this temporary unwrapping remains active. Scientists call these phenomena epigenetic changes. “The inflammasome triggers such epigenetic changes”, explained Dr Latz. “The immune system consequently reacts even to small stimuli with stronger inflammatory responses.” These inflammatory responses can, in turn, accelerate the development of vascular diseases or type 2 diabetes.

In arteriosclerosis, for example, the typical vascular deposits, the plaques, consist largely of lipids and immune cells. The inflammatory reaction contributes directly to their growth because newly activated immune cells constantly migrate into the altered vessel walls. When the plaques grow too large, they can burst, leading to blood clotting and are carried away by the bloodstream and can clog vessels. Possible consequences: Stroke or heart attack. Wrong nutrition can thus have dramatic consequences.

“These findings, therefore, have important societal relevance”, concluded Latz. “The foundations of a healthy diet need to become a much more prominent part of education than they are at present. Only in this way can we immunise children at an early stage against the temptations of the food industry. Children have a choice of what they eat every day. We should enable them to make conscious decisions regarding their dietary habits.”

 

Source: www.pakistantoday.com.pk

Organic Food and Beverage Market Growth Projected at 14 Percent Before 2021

The organic food and beverages market is expected to grow at a rate of 14 percent from 2017 until 2021, according to a new market research report by Technavio.

The report identifies three major market trends driving this growth, a major one of which is innovation in products and new product launches.

“Due to the presence of a number of small and international brands, the organic food and beverages market is experiencing high competition,” said Manjunath Reddy, a lead analyst at Technavio, in a news release. “To maintain market share and customer base, vendors are trying to launch innovative food products. Manufacturers are developing new varieties of organic food by formulating new ingredient combinations, and flavors.”

Whole Foods Market recently highlighted the importance of market innovation, specifically in the plant-based meat replacement sector, in its news release highlighting projected food trends for 2018. FoodNavigator USA also noted the importance of innovation, specifically with regard to cellular agriculture and plant-based foods, in its recent 2018 food trends report.

Other market trends contributing to organic food market growth highlighted by Technavio included increased marketing and promotions as well as growing demand for organic wine, specifically in Brazil and Mexico.

Within the organic food industry, organic baby food is seeing excellent growth, according to a new Future Market Insights report, which estimates that the global organic baby food market will account for $5.6 billion by 2020, with 10.5 percent growth. The recent announcement that actress Jennifer Garner and former Annie’s CEO John Foraker would be joining organic baby food company Once Upon a Farm is a testament to this growing market sector.

Growth in the natural and organic market extends to the personal care industry, according to Persistence Market Research, which estimates that the global natural and organic personal care products market will reach $21 million by the end of 2024, with a growth rate of 8.8 percent. The skincare segment of the market is “expected to emerge the most attractive,” according to the Daily Telescope, with a projected market share of 30.9 percent by 2024.

Source: www.organicauthority.com

Food industry eyes microwavable packaging technology

With growing popularity of home meal replacements, or ready-to-eat meals that require little preparation, South Korean food processing companies are in a race to develop better and more efficient microwavable packaging.

Industry insiders said packaging technology will emerge as an important factor in the competitiveness of products, while busy lifestyles and easy preparation are also boosting the microwavable food market.

According to global market research firm Smithers Pira, the South Korean packaging industry was valued at 44.2 trillion won ($41.4 billion) in 2015 and the size of the world’s packaging market was 998 trillion won.

Nongshim, Korea’s largest instant noodle maker, recently launched the Shin Ramyun Black Cup Noodle, its signature Shin Ramyun in a microwave-safe paper container.

Unlike most cup noodle containers, which are made of materials that easily melt and catch fire when microwaved, Nongshim said it upgraded the packaging by using a special material verified by the Ministry of Food and Drug Safety. The container can withstand a temperature of 100 degrees Celsius.

Meanwhile, medium-sized food company Ottogi has begun selling some of its instant noodles, such as Sesame Ramen, in microwavable containers.

Another food manufacturer CJ Cheiljedang recently launched Gourmet Hamburger Steak, which uses a steam heating technology. Consumers simply unwrap the package and microwave it for six minutes to cook it.

According to the market research firm Nielsen Korea, the market for home meal replacement products hit 2 trillion won in the first six months of 2017, an increase of about 7.7 percent on-year.

Source: www.koreaherald.com

Pakistan. Food group imports increase by 16.08pc in 5 months

Food group imports into the country during first five months of current financial year increased by 16.08 percent as compared the corresponding period of last year.

During the period from July-November, 2017-18 food commodities worth US$ 2.718 billion imported into the country as compared the imports of US$ 2.341 billion of same period last year, according the data of Pakistan Bureau of Statistics.

During the period under review, about 38,231 metric tons of milk cream and milk for infant food valuing US$ 107.846 million imported which was up by 4.95 percent as compared the imports of 34,951 metric tons worth of US$ 102.754 million of same period last year.

Country consumed 68,965 metric tons of dry fruits and nuts costing US$ 78.920 million in first five months of current financial year, which was recorded at 56,605 metric tons worth of US$ 96.171 million of same period of last year.

Meanwhile, US$ 230.917 million on the imports of about 80,597 metric tons of tea as compared the imports of 84,324 metric tons valuing US$ 208.383 million, showing an increase of 10.81 percent.

The spices imports into the country also grew by 26.74 percent as about 67,115 metric tons of spices valuing US$ 66.667 million imported as compared the imports of 51,443 metric tons worth US$ 52.601 million of same period last year.

It may be recalled that food group imports into the country on month basis also grew by 1.38 percent in November, 2017 as compared the same month of last year.

Food commodities worth of US$ 520.127 million were imported in last month as compared the imports of US$ 513.071 million of same period of last year.

On the other hand food group exports from the country witnessed 12.05 percent growth as compared the exports of the corresponding period of last year.

During the period from July-November, 2017-18 food commodities worth of US$ 1.491 billion exported as against the exports of US$ 1.319 billion of same period of last year.

Source: www.blackseagrain.net

How blockchain technology could transform the food industry

There has been a lot of noise on cryptocurrencies and Bitcoin of late. While some suggest cryptocurrencies are a fraud, others believe them to be the next biggest economic revolution the world has seen since the internet. Bitcoin has brought to light blockchain technology, which offers great potential for food safety and verification in the agrifood sector. Yet it is far from being the panacea for a range of issues affecting the industry — at least for now.

Simply put, blockchain technology is a way of storing and sharing information across a network of users in an open virtual space. Blockchain technology allows for users to look at all transactions simultaneously and in real-time. In food, for example, a retailer would know with whom his supplier has had dealings. Additionally, since transactions are not stored in any single location, it is almost impossible to hack the information.

For consumers, blockchain technology can make a difference. By reading a simple QR code with a smartphone, data such as an animal’s date of birth, use of antibiotics, vaccinations, and location where the livestock was harvested can easily be conveyed to the consumer.

Food safety

Blockchain makes a supply chain more transparent at an all-new level. It also empowers the entire chain to be more responsive to any food safety disasters. Massive organizations such as Nestlé and Unilever are considering blockchain technologies for that reason.

Walmart, which sells 20 per cent of all food in the U.S., has just completed two blockchain pilot projects. Prior to using blockchain, Walmart conducted a traceback test on mangoes in one of its stores. It took six days, 18 hours, and 26 minutes to trace mangoes back to its original farm.

By using blockchain, Walmart can provide all the information the consumer wants in 2.2 seconds. During an outbreak of disease or contamination, six days is an eternity. A company can save lives by using blockchain technologies.

Blockchain also allows specific products to be traced at any given time, which would help to reduce food waste. For instance, contaminated products can be traced easily and quickly, while safe foods would remain on the shelves and not be sent to landfills.

Preventing fraud

However, it will work only if the data at the source is accurate, as current practices in the industry are much more open to human error. Much of the compliance data is audited by trusted third parties and stored either on paper or in a centralized database. These databases are highly vulnerable to informational inaccuracies, hacking, high operating costs, and intentional errors motivated by corruption and fraudulent behaviour.

Blockchain operates anonymously, so mistakes would be traceable to individual culprits. Considering recent food-fraud scandals in Canada and elsewhere, this feature is not trivial. Blockchain technology provides a method with which records are kept permanently.

Most importantly though, it facilitates data-sharing between disparate actors in a food value chain. Many retailers have sold fraudulent food products unknowingly. With the use of blockchain, those days could come to and end.

Faster, fairer payment

Blockchain will allow everyone to be paid more quickly, from farm to plate. Farmers could sell more quickly, and be properly compensated as market data would be readily available and validated.

Blockchain technology could represent a legitimate option for farmers who feel compelled to rely on marketing boards to sell their commodities. The use of blockchain could prevent price coercion and retroactive payments, both of which we have seen across the food supply chain.

Blockchain technologies could “Uberize” the agrifood sector by eliminating middlemen and lowering transaction fees. This can lead to fairer pricing and even help smaller outfits desperate to get more market attention.

Limits of blockchain

Our current traceability systems need work, and blockchain technologies could be the evolution they need. Given its architecture, blockchain technology offers an affordable solution to both small-to-medium enterprises (SMEs) and large organizations. However, there are noteworthy limitations.

The amount of information which can be processed is limited. Since all of the information would be out there and accessible, several contracts between organizations would need to be secured for some level of confidentiality to be retained. How to balance confidentiality with transparency would need to be worked out.

The agrifood arena is filled with secrets. Blockchain technology as it is currently being deployed would be problematic for many food companies. For many, blockchain is just a solution looking for a problem. Simply put, some companies, like Walmart, have more power and influence over other companies within the same supply chain.

Marketplace confusion limits participation

In addition, blockchain is really in its infancy and most people are uncertain about its potential. The innovation in blockchain architectures, applications and business concepts is happening rapidly. It’s a decentralized, open-source organism which is challenging to grasp for many, including governments.

In food, innovation is always desirable until it becomes real. Once it manifests itself, guards go up. Some organizations are moving ahead while others wait to see what happens. The marketplace is currently fueled with confusion due to the Bitcoin phenomenon, which is labelled by many as being irrational and ridiculous. Cryptocurrencies allow for transactions to occur while using blockchain technology, but it remains just an option.

Nevertheless, the most important challenge for blockchain technology remains participation. All parties must adopt the technology in order for it to work. In food distribution, not all companies are equal and some can exercise their power more than others.

A successful integration of the blockchain requires the engagement of all participating organizations. Walmart’s blockchain will likely be successful because it’s Walmart. But thousands of companies do not have the same clout.

Blockchain technology in agrifood has potential but it needs work. Industry public leaders should embrace blockchain as an opportunity and should be added to a digitalization strategy currently affecting the entire food industry. Transparency, productivity, competitiveness and sustainability of the agrifood sector could be enhanced.

Nonetheless, research should look at how to generate evidence-based blockchain solutions to democratize data for the entire system before we get too excited

Source: www.theconversation.com

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