08 May 2020 — The Asia-Pacific (APAC) Provenance Council has been established to integrate blockchain technology into the food supply chain finance in Australia-China trades. Supported by government, export bodies, standards agencies and other industry stakeholders, the consortium aims to provide a comprehensive blockchain-enabled food supply chain finance ecosystem, which will bridge traceable, safe and trusted trades with shorter billing terms between Australian suppliers and Chinese importers.
The impact from COVID-19 further lifts the urgency of pushing forward this initiative. “On one hand, the pandemic is posing a direct threat to F&B vendors around the globe, particularly in cross-continental trading. The suppliers are heavily impacting their cash flows, which calls for immediate invoice finance to quickly unlock unpaid invoices and stimulate business growth,” the Council details.
“On the other hand, the public awareness of food safety is unprecedentedly high. According to a study of InTarget Shanghai, Chinese consumers have become more health and safety-conscious and this will continue to be reflected in future,” it adds.
“Many solution providers have offered ‘track and trace’ services, but haven’t addressed industry needs in a comprehensive way. In a post-COVID world when many commercial entities are in decline, we are growing by making sure to deliver real economic value, meeting industry needs, as well as including funding sources for industry,” says David Inderias, APAC Provenance Council Executive Chairman.
In February, the Australian government published “The National Blockchain Roadmap,” proactively addressing opportunities in the Agritech & Food industry, which directly accelerates the establishment of the Council.
Indeed, the use of blockchain is increasingly leveraged by businesses in the agri-food sector, particularly in ensuring the transparency of trade, while expediting commerce. The technology is being leveraged by Cargill in the cross-continental trade of wheat to help address two primary industry challenges related to COVID-19 – the speed of trade and curbing the actual spread of disease.
Earlier this month, Dutch NGO Fairfood launched a new blockchain-enabled transparency and traceability platform, Trace, to track food back to its origin and share product stories, tapping into Innova Market Insights’ “Storytelling” Top Trend of 2020.
Powered by AliPay in Australia, all the B2B payments for China-destined trades from Australian food suppliers will receive milestone-based payments of the total fiat payment upfront upon meeting the first milestone of their delivery terms.
For food suppliers in Australia exporting food products traced by VeChain ToolChain, the entire process of product delivery will be recorded. This includes logistics information, temperature during the process and other metrics. Acting as the “trust machine” in multiparty collaboration, blockchain provides immutable and authentic records, which not only ensures the secured process of logistics transfer, bringing transparency and trust into the cross-continental trade, but also helps shorten the billing period for suppliers.
VeChain as the sole public blockchain protocol in the Consortium
Launched in 2015, VeChain connects blockchain technology to the real world by providing a comprehensive governance structure, a robust economic model and IoT integration.
“Guided by the mission of powering the real economy, VeChain positions itself to be an enabler to empower our partners with blockchain to build business applications in various sectors. The implementation of blockchain certainly contributes to buffering the immediate economic impacts of the pandemic for the enterprises and will help improve productivity by unleashing more resources and growth opportunities,” stresses Sunny Lu, CEO at VeChain.
The Australian Department of Agriculture predicts China will account for 43 percent of global growth in demand for agricultural products by 2050. Since the Australian products have an enviable reputation for being high-quality, Australian exporters can strongly take advantage of China’s growing demand for quality produce and its need for food security. With the market evolving, the demand for business-ready standard blockchain tools will also see a dramatic growth, which positions VeChain ToolChain to seize the opportunity to support more enterprises and create more value.
By Benjamin Ferrer
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