The crisis in the world’s oceans, lakes and rivers from over-fishing means nearly 90% of global fish stocks are over-fished or fully exploited. There is massive wastage, with around half of seafood discarded, while illegal, unreported and unregulated fishing is rife. And mislabelling of seafood is estimated at anywhere between 20% and 86% depending on the species and supply chain.
“It is unbelievable how little information we have about the seafood we consume,” says Jayson Berryhill, partner at Eachmile Technologies. Eachmile’s vision, with a host of industry partners, is to apply the distributed ledger technology of blockchain and tokens to address this “huge missing link”.
The Theory of Fishcoin
The Fishcoin platform will use blockchain as the interoperable system to hold trusted, transparent and secure data for each entity in a supply chain, from those bringing in the catch and fish farmers (of which the majority are in developing nations, accounting for 85% of fish by volume) through fish processors, seafood exporters, and governments to the end retailer and food outlet.
The tokens are the mechanism for rewarding seafood producers and supply chain intermediaries through micro-transactions. The flow will be from those that benefit from the traceability, typically hotels, restaurants and retailers, to those further down the supply chain. The data will follow the product, on a peer-to-peer basis. When the data is first accepted and agreed by two parties then it is added to the blockchain, creating a smart contract and triggering the initial token exchange.
The best way to provide the incentive was one of the challenges, as many of those in the sector in developing nations won’t have bank accounts or even personal identification. What they will have, points out Berryhill, are mobile phones, so the tokens will be exchangeable for mobile top-ups. One of the partners is a large mobile wholesaler that works with 600 operators around the world. Other incentives might follow top-ups in the future, he adds.
To determine the legal status, safety, and quality of seafood, and ultimately the responsibility of its harvest, buyers need to know important information such as product specifications (species, size, weight and so on), location of harvest, time/date of harvest, the identity of the producers, and the way in which the seafood was handled. These data points don’t simply need to be captured but need to be transferred through each member of what, in many cases, are highly fragmented supply chains.
To a degree, as well as the ‘carrot’ of tokens, there is the ‘stick’ of additional regulations. In particular, the US’s Seafood Import Monitoring Program (SIMP), introduced this year, blocks 15 species groups from import to the US unless there is traceability back to the boat. The expectation is that other countries will follow this lead.
In terms of fraud, Berryhill says the solution should shine more of a light on the practices within the supply chains, in part through the ability to identify patterns and aid auditing and standards bodies.
An Open Source Platform
While instigated by Eachmile, which already has expertise in this sector with a range of mobile applications and services, the blockchain-based ecosystem will be open source. It is using Ethereum, in part because it has the largest developer community, and Berryhill also sees a lot of potential in IPFS and other forms of decentralised data storage.
The intention is for the platform to become the foundation for building other applications. In some ways, says Berryhill, the “traceability should not be a high bar – it should be a minimum standard. Traceability should be the tracks for the supply chain to run on.”
One area where additional value could be added is around supply chain finance. A relevant partner here is Cambridge University’s Institute for Sustainability Leadership. Its Banking Environment Initiative has a stated mission “to lead the banking industry in collectively directing capital towards environmentally and socially sustainable economic development”. Part of this is centred on sustainable supply chains.
Better and fairer access to finance could aid small-scale fishermen who, at present, are often exploited, including by the owners of their boats. There have been discussions with banks about becoming partners, so too with insurers, who could help to ‘derisk’ the sector by providing better cover.
Another area of potential is the application of sensors along the supply chain to provide information to reduce waste. Eachmile has previously worked with Alaska-based Seafood Analytics. Data from this company’s Certified Quality Reader (CQR) sensors about the freshness of fish could populate the blockchain and identify problems in the supply chain, such as where peak counts of bacteria occur. “The whole food industry is just ripe for IoT [Internet of Things],” says Berryhill.
Timescales and future potential steps
There are already pilots with Thai Union, one of the largest seafood companies in the world. The token functionality is about to be demonstrated and a network layer will follow, which will open up the platform to third-parties to build applications.
A presale of Fishcoin tokens is scheduled for 31st October. This is intended to develop the network, seed the market, and align the interests of the various stakeholders, including early contributors, project team members, and advisors. Each group will receive an allotment of tokens according to their contribution to the ecosystem. The sale is for 40% of tokens, with another 10% allocated for marketing, 10% for the project team and 7% for advisors, with 33% in reserve.
Berryhill expects the supply chains for the 15 species covered by the US SIMP regulations to be the initial focus. Despite the obvious application of the platform and processes for other supply chains, the seafood challenge is sufficiently huge that he does not expect Eachmile to look at other sectors. Shrimp farming alone, for instance, is a massive sector, so too salmon and there are, he points out, 12,000 species of fish.
At the same time, if others want to replicate the model for other sectors, then this is feasible. Eachmile itself, although mainly focused on seafood, has adapted its mFish mobile applications, as mFarmer, to link smallholder farmers to buyers, funded by Unilever Foundry and GrowAsia. The mFarmer pilot was with smallholder palm oil and coconut sugar farmers in Indonesia.