Transparency and trust are crucial for well-performing and sustainable agri-food supply chains. Yet, in too many food supply chains both are lacking. Using the OriginTrail Decentralized Knowledge Graph and Oracle Blockchain Platform, Trace Labs has recently launched a solution to drive radical trust and process optimization in agri-food supply chains with the use of distributed ledger technologies (DLTs). The solution is used to set up automated trusted payments for milk to help optimize a dairy supply chain as part of SmartAgriHubs (SAH), the largest EU-funded project focusing on digitizing the European agri-food sector.

Almost one-third of global food manufacturers cannot guarantee that the ingredients they use are not fraudulent. The root cause is insufficient data exchange due to a lack of trust between different organizations. As such, data is often stored in silos at every point in the supply chain, which is a significant barrier to effective traceability and overall transparency.

Trace Labs is actively tackling this problem with unique solutions built on the open-source OriginTrail Decentralized Knowledge Graph (DKG). With the use of the OriginTrail DKG, crucial data from stakeholders across the supply chains can be connected and secured from manipulation through semantic web and blockchain technologies. Trusted and connected linked data is then used in different web applications to improve the traceability of products, increase trust, and help optimize every stage of the supply chain management process.

When a problem such as contamination is discovered, the solution enables quick discovery of the product trail end-to-end. With all the data interconnected and accessible, it is easier to track and trace the root cause of any problem that may occur. This drives down the costs of recalls and prevents food waste. The solution also provides an excellent technological infrastructure for deploying other kinds of trusted solutions for optimizing agri-food value chains, like trusted and automated payments in dairy and other value chains.

Optimizing dairy value chains with OriginTrail and Oracle technology

Milk payment is a complex process and the price of milk paid to a farmer depends on multiple factors. The quality of the milk, the quantity of the shipment, and negotiated margins all play a part in every single delivery that farmers make. Additionally, these deliveries are taken in and processed by different organizations, like farmers, agricultural cooperatives, dairies, and testing laboratories. All of this means that the current way of handling payments towards the farmers still involves significant manual effort to verify all inputs and ensure the right process is respected.

To help optimize this process, Trace Labs paired OriginTrail with the smart contract capabilities of Oracle Hyperledger Fabric to deliver a solution that showcases how blockchain-based technologies can improve efficiency, safety, and trust in food supply chains without interrupting the existing business processes. Using the two systems, the milk payment mechanism that Trace Labs developed enables automatic calculation of payments due to each of the farmers based on the trusted milk processing data stored on the OriginTrail Decentralized Network (ODN) and the contractual data stored in the Hyperledger Fabric.

Notably, the new system in no way changes the current IT landscape, nor the existing business processes. Rather, it treats both as key data sources and a starting point for improvement. Each of the involved IT systems (the dairy ERP, the cooperative ERP, and the cooperative contractual data) exports data in its existing format, Trace Labs’ solution restructures the data for interoperability and prepares it for publishing on the OriginTrail DKG.

Since a lot of the included data is very business-sensitive, data access control and permissioning is handled with great care. Critical data is kept in the secure private store of the OriginTrail node subgraph with only key integrity-assuring data points published to the public DKG (metadata for indexing and cryptographic proofs for data validation). Once the cooperative is ready to make the payment, the required payment data is taken out of the Oracle Hyperledger Fabric blockchain and restructured into a payment file.

Combining all components, Trace Labs was able to entirely automate the payment system by simultaneously increasing the integrity level of the entire process and the accountability of each supply chain partner for the parts that they are responsible for. The solution was initially deployed in the scope of the Smart Agri Hubs project supported by the European Union (EU) under Horizon 2020 research and innovation program.

OriginTrail – combining data integrity, confidentiality and connectivity for supply chain transparency and trust

The implemented solutions prove that effective and efficient blockchain solutions can be built on top of existing IT infrastructure enabling systems interoperability and linked data. There was no need for costly rip-and-replace of existing IT infrastructure for any of the stakeholders in the respective value chains when implementing the solutions.

Importantly, by enabling the users of the solutions to combine both the integrity of public networks and the confidentiality of private ones, Trace Labs ensures that agri-food stakeholders can extract tangible benefits from using blockchain-based technologies. Namely, making sure their supply chains are more efficient, more transparent, and more sustainable. All things which increase the long-term viability of their business and allow for a greater value proposition.

This project has received funding from the European Union’s Horizon 2020 research and innovation program under grant agreement No 818182.