Traceability and quality linked

pricing
 The Importance of Food Traceability
• The world that we live in is awash with information. There’s
information available to consumers on almost everything,
including manufacturing processes, technologies and
products. 
• We have a personal relationship with the food we eat. This
primarily stems from the fact that it enters our body and is
the source of our nutrition and impacts our health.
• Therefore, people are increasingly interested in knowing
about what goes into their food.
• In the post-pandemic era, the importance of food traceability
is growing in magnitude and consumers want to know
everything about the journey of their food from the farm to
their tables.
• People want to know about the ingredients, chemicals,
fertilizers, pesticides and other additives that go into the
production of their food, including the geo-location from
where the foods have been sourced. That’s where traceability
comes in.
 How does traceability work?

• We have approximately 130mn farmers in our country, who

cultivate 195mn hectares of land. In reality, this is the backbone of
our economy, as it employs 58% of our population.
• Agriculture, forestry and fishing added a staggering 18.55 lakh
crores (USD 265.51bn) to our GDP in 2019.
• Traceability helps in building trust and confidence amongst all
these players within the supply chain, which includes the
customers, agricultural companies, wholesalers and the farmers. 
• Let’s take a quick look at how traceability starts at the very
inception of the food chain.
 Quality of seeds

• It all starts with the seed itself. Of course, the seed is the basic input of any agricultural
process and plays a significant role in attaining higher crop yields and sustained growth.
• Genetically modified (GM) seeds adversely impact the quality of the crop. In order to
pursue organic cultivation, high-quality organic seeds are essential.
• The distribution of quality seeds is as critical as their production. The vast majority of
Indian farmers do not have access to high-quality seeds, due to their exorbitant prices.
• Another challenge is the availability of spurious seeds. Believe it or not, 60 to 65% of
seeds used in the country are unlabelled. In India, around 35% of seeds in use are from
the cultivated crops, saved by the farmer. 
• Only 45% go through the ICAR system, with certifies the products. The balance comes
from private companies and doesn’t go through an authorised certification process.
• A fool-proof traceability and certification system is, therefore, the need of the hour.
Agricultural productivity could increase by 25%, if such a system were to be introduced,
according to reports.
 Organic production

• Apart from the quality of seeds, the quality of the soil plays an
important role in producing organic food.
• Truly organic food products must not be grown on soil that has
traces of chemical fertilizers or pesticides. For this to happen, the
soil has to be remediated completely.
• In many cases, non-organic farming may have taken place on a
piece of land. It may take up to 3 years for contaminants to be
dissipated completely. During this time, the produce coming out
of this land in the first year will not be completely organic.
• In the second or third year, the organic value of the produce
starts to increase. Natural fertilisers like Neem seeds or natural
compost are often used in this process.
• There are certain disadvantages that the farmer faces when
pursuing organic cultivation. The most important factor is that
the volume of production falls.
• So, a multi-crop strategy needs to be implemented and
balanced in a way that ensures that production numbers do
not reduce drastically. For example, millets can be grown
along with lentils. If the farmer is impacted financially, he
would lose interest in organic farming.
 The role of certification

• Certification plays an important role during these processes. An authorized

certification agency plays a pivotal role in the transparency of information,
which takes everything into account from the quality of seeds and organic
production to the quality of the end product that reaches customers.  
• Once the product becomes 100% organic, it commands far better prices
and the farmer start realizing returns at this stage.
•  APEDA (Agricultural and Processed Foods Products Export Development
Authority) has now made traceability mandatory for food products to be
certified as 100% organic.
•  This includes traceability of seeds introduced at the inception stage and
verification of all processes and practices used during the food production
cycle.  Traceability is starting to play a major role in the procurement of
food products in the country.
 How can blockchain enhance traceability?

• There is an incredible opportunity to enhance traceability in

the agricultural sector, through the use of blockchain
technology, otherwise known as blockchain traceability.
• This process commences at the seed level and goes all the
way up to the final stage, right through the entire supply
chain.
• An advanced form of traceability of this nature can enhance
transparency in the industry.
• Consumers can benefit by knowing about the quality of seeds,
the handling of food products, production processes and
whether or not the produce is truly organic.
• Blockchain technology has manifold advantages. Since all the
data is recorded on a distributed ledger system, it becomes
tamperproof. 
• The immutability of the data creates absolute transparency
and accountability.
• Verification becomes easy at every level – for regulators,
quality certification agencies, manufacturers, wholesalers,
retailers and consumers.
• It’s not just about verification. These initiatives can build
brand value for organic food companies.
• It is a major shot in the arm for the trust economy, where
agricultural companies can convincingly prove the health and
nutrition benefits of their products.  
• The good news is that blockchain technology is already
starting to empower the agricultural sector in India. Many
manufacturers are fast moving towards the adoption of this
technology throughout their processes.
• For example, Tracex Technologies is a company that already
uses blockchain for the traceability and verification of food
products.
 Government support for traceability

• A technology initiative of this magnitude can only work if it

receives support from the government. It is the need of the hour
and ministry backing is crucial.
• The Finance Minister, Nirmala Sitharaman has recently unveiled
an economic package that includes Rs 100 million (US$ 1.33 billion)
to finance food and agricultural start-ups. Industry studies show
that only 830,000 Indian farmers, out of an estimated 200 million,
are involved in organic agriculture.
• However, the Indian organic vegetable market alone is worth Rs 40
billion annually. In a land where there has been historically little or
no impetus towards food safety and accountability, these
guidelines have now made it a mandatory requirement for exports.
• India is the second-largest producer of food in the world, but
surprisingly has only a 
2% market share in global agriculture exports.
• Therefore, the government and all stakeholders within the
industry need to work hand-in-hand to implement a traceability
framework that enhances food safety.
• Organic farming requires soil improvement and other processes
to be implemented, that can only be achieved via a stronger
relationship within the entire supply chain network.
• It is a market which is expected to grow annually by 10 to 15%.
Introduction of a traceability framework by the government is
now long over-due.
• Similarly, the urban population in India is currently 377 mn
 and is expected to grow to 404 mn by 2050. Urban farming is
being explored by many, agri start-ups.
• For all these initiatives, in the rural and urban sector, the
requirement of traceability is paramount. From food safety to
farmer’s incomes and the promotion of exports, traceability
plays a significant role across the spectrum.
• It results in packaged produce containing verified information
about the origin and production practices. It also allows the
consumer to scan the products and find out the farmer’s name
and location, the type of seeds used, and the production
methods that were used to form the food.
• The agri-tech sector can benefit immensely from the implementation of a
blockchain-based traceability framework. It is our nation’s gold mine and
was valued at Rs 18.55 lakh crore in 2019.
• It is expected to grow annually by 10.2% until 2024. Approximately 60%
of our country’s population is dependent on agriculture.
• Needless to say, these are three important reasons for the entire
community to work hand-in-hand with the government and the
regulators to implement a robust, blockchain-enabled traceability system.
• Such an initiative will bring immense benefits in the long run and can play
a turnkey role in aligning the supply chain network from farm to fork,
resulting in a win-win situation for everyone.
• Special thanks and acknowledgement to Mr. Sagar Sarkar for his support.