RESEARCH / BLOCKCHAIN TECHNOLOGY TO EXPAND MARKETS FOR VALUE-ADDED PRODUCTS
Food manufacturers, retailers, and consumers value traceability and security in food supply chains. This is a challenge for small- to mid-scale agricultural producers, who face difficulties aggregating quality products into a quantity needed by buyers, and who usually forfeit traceability when they do aggregate. This in turn limits potential market outlets and makes it problematic for small producers to capture premium pricing opportunities for value-added products. Blockchain technology shows considerable promise in offering a traceability solution to small- and mid-scale farmers, and to their supply chain partners such as food wholesalers, processors, and retailers. However, convincing producers and their supply chain partners to transition away from traditional methods of tracking shipments, such as locally stored spreadsheets or even paper records, remains an obstacle to the adoption of blockchain technology.
Harrison, Ladlee, Eury, and Schmidt are examining the potential of blockchain technology to efficiently connect agricultural producers to wholesalers, processors, institutional buyers, and consumers; decrease regulatory compliance and certification costs; better document food safety critical control point checks from producers to consumers; and increase market and premium pricing opportunities for specialized or value-added agricultural products through transparency and greater connection to producers. They will carry out interviews and focus groups in the case study Chesapeake Bay watershed with small- and mid-scale farmers, local small packers and shippers, regional distributors, and institutional buyers to identify key bottlenecks to utilizing more local products from smaller-scale farmers and to utilizing blockchain technology. They will then work on a blockchain design to reduce these bottlenecks and implement a small-scale blockchain proof of concept.
Professor of Supply Chain and Information Systems, Penn State
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Extension Assistant Director of Energy, Business, & Community Development Programs, Penn State
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