The widespread adopting of new data technologies such as blockchain may lead to fairer food prices for consumer and producers, according to new research.
Michaela Balzarova, an associate professor at the College of Business and Law at the University of Canterbury in New Zealand, is conducting theoretical research into eco-labelling schemes and voluntary environmental systems that businesses adopt to mitigate their environmental and social impacts.
She is also exploring alternative schemes and to what extent blockchain technology helps to address sustainability challenges that arise from problems of production and consumption of goods and services.
Using blockchain in future, she suggests, could be a way of ensuring transparency of transactions, gathering more accurate data and eliminating the need for intermediaries.
Balzarova believes that once present problems related to trust and a lack of experience with blockchain technology are addressed, using blockchain platform for future transactions could result in reduced prices for consumers and fairer returns for farmers.
For example, Fair Trade labels have been developed to improve the livelihoods of farmers in developing countries.
In the case of coffee, the problem with this approach is that products may have gone through as many as 26 intermediaries that may have added no value to the product or service and consumers have no way of knowing if the price they have paid is fair. The transactions are not transparent and are not direct.
Blockchain beats eco labelling?
Eco-labels were created to address increased consumer demand for environmentally sound and ethical production processes and to provide the consumer with better information about the product, allowing them to make more environmentally friendly purchases.
However, literature is inconclusive about the social, economic and environmental effectiveness of eco-labels.
In other words, it is not clear whether eco-labels deliver what they or if they are promoting unsustainable trends in the consumption of goods. Eco-labels are facing challenges in terms of measurability.
This is mostly due to a lack of data, inconsistent record-keeping and confidentiality issues, with the result that it is not possible to assess the entire programme’s economic, environmental and social impact.
This is where blockchain technology promises improvements. It provides a novel way of recording data and confidence in peer-to-peer trading transactions. It keeps records of digital asset transactions in a decentralised manner, based on mathematical algorithms and financial incentives.
“We need to focus models on how we can feed everyone on a fair basis, improving comfort and standard of living for everyone on this planet. It’s not just an issue of getting rid of intermediaries. We need to encourage users to take ownership of data stored on their behalf and blockchain enables this,” says Balzarova.
“Right now, I have been exploring benefits of blockchain technology in sustainable food production theoretically, by looking at what blockchain offers versus experiences with labelling schemes that try to mitigate adverse production impacts.”