Counting Chickens: Can Blockchain Restore Trust in China's Food Supply?

Noelle Acheson is a 10-year veteran of company analysis and the author of CoinDesk Weekly, a custom-curated newsletter delivered every Sunday, exclusively to CoinDesk subscribers.

Last week, CoinDesk reported that the technology arm of Chinese web insurer ZhongAn was developing a blockchain platform.

Not for insurance, though, as you might expect. This one will help track the provenance of chicken.

While this marks a first for the Chinese company (partially owned by Alibaba, Tencent and insurance giant Ping An), the launch will join a growing list of blockchain projects aimed at improving China's food safety record.

Over the past few years, the country has been hit by a series of scandals involving contaminated produce and supply chain fraud, and initiatives to improve the industry's reputation are emerging from a broad range of public and private entities.

This particular project, though, is especially intriguing, not only for its potential impact on agriculture, but also because of its timing.

Earlier this month, the US Department of Agriculture proposed allowing China to export domestic chicken to the US. Beyond opening up a potentially vast market for Chinese exporters, this move could help to reinforce China’s bid to strengthen its global footprint.

The impact will not only be felt in the export market. Improving consumer confidence in Chinese produce will also affect domestic sales, and could end up helping to improve trust in institutions.

Lack of trust

The boost is sorely needed: a 2015 Pew Internet Research Survey revealed that over 70% of Chinese citizens were worried about food safety, almost three times as many as in 2008. While not top of the list of concerns (that honor goes to corruption, pollution and inequality), food safety ranked above unemployment, healthcare and workers’ conditions.

The urgency is also reflected in statements from the Communist Party of China. The influential "No. 1 Central Document" – the first policy statement of the year put out by the Central Committee – established agricultural innovation as a priority, and specifically mentions quality supervision and standards. This could point to an important level of official support for current and future food supply projects investigating blockchain’s potential.

Beyond the compelling case for lowering the risk in people’s daily food consumption, we can see the emergence of an interesting strategy.

Given the technology’s efficiency in tracking provenance and in enhancing supply chain transparency, it’s easy to see how blockchain projects might improve China’s reputation in this field.

Benefits to society

However, the vision seems to be about more than “catching up.” The level of development work focused on this use case suggests that the strategy is more to “overtake.” If China’s food producers and distributors can harness the improved level of trust that blockchain technology offers, it could end up becoming an agricultural powerhouse – not only for its growing population, but also for export.

Given the size of the potential market, the economic impact could be huge.

Furthermore, the relatively easy scalability of blockchain projects will ease the strain on the various platforms as they expand to accommodate increased demand for clear food safety measures, both at home and elsewhere. Last week, for example, China and the European Union launched a joint project to combat food fraud. Other international collaborations are likely to follow.

So, while the ZhongAn development is young, it forms part of an encouraging bigger picture: the expansion of blockchain technology applications to deep problems that affect a society’s well-being.

Because, economic advantages aside, a more compelling benefit lies in the end product itself. After all, there are few things more important than feeding people safely.

Chicken feather image via Shutterstock