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Third Party Certification of Harvests using Non
Fungible Blockchain Tokens
Ricardo Borges dos Santosa, Erick Reyann Kasai Yamadaa, Nunzio Marco
Torrisia and Rodrigo Palucci Pantonib ,b,∗
a Centro de Matemática, Computação e Cognição (CMCC). Universidade Federal do ABC
(UFABC), Alameda da Universidade, São Bernardo do Campo - SP - 09606-045, Brazil
bInstituto Federal do São Paulo - Campus Sertãozinho, Rua Américo Ambrósio, 269,
Sertãozinho - SP - 14169-263, Brazil
Abstract
Increasingly sustainable farming methodologies are being required by end con-
sumers; whilst increasingly competitive markets sugests farmers use more chem-
icals, consider the use of border line genetic modified organisms or questionable
sorts of labour. On the consumer relationship side, many producers are stretch-
ing the words printed on their food labels to induce customers to believe that
their harvest are environmentally and socially friendly. More reliable certifica-
tion tools can help avoid green washing. Consumers have to ask themselves if
they can believe in the first person claims on the labels. Certification of farm-
ing processes such as those by Fairtrade and USDA Organic certification are
not specific to each harvest. Third party certification (TPC) of each harvest
instance and a reliable publicity of the certificates is urgently needed to enhance
trust. The use of with distributed ledger technology (DLT) in the form of an
Ethereum blockchain non fungible utility token is proposed to help fill this gap.
The main advantages are: low cost of transaction, providing incentives to each
traceability partner along the chain and avoiding the mass balance fraud, also
known as the ”double spending” issue. This research implements a framework
to support TPC on a harvest to harvest basis, as opposed to the farm process
certification, enhancing trust in the agro supply chain and allowing consumers
∗∗
Email address: ricardo.borges@ufabc.edu.br ()
Preprint submitted to Journal of LATEX Templates February 15, 2020
to easily check for the TPC via their mobile devices.
Keywords: Third party certification; Green-washing; Blockchain; ERC-20;
Non Fungible Token; ERC-721; ERC-1155; Provenance;
2010 MSC: 00-01, 99-00
1. Introduction
1.1. Modern Farming Landscape
Healthy food starts with a healthy harvest. Several factors will, however,
influence the exact quality and properties of each instance of the food that
reaches the consumer. Examples would be: the farming methods, the seeds, the5
micro climate, the humidity during the harvesting days or the need to use some
agro chemical help against some insect infestation. The storage at the farm as
well as the handling along the supply chain links can also interfere and avoid
that quality food reaches the consumer’s table.
Consumers, as well as supply chain participants, are continuously imposing10
extreme pressure on the productivity of farming. The farmers rely on agricul-
tural innovation and technology to meet those challenges and have been able
to deliver significant and continuous improvements. For most crops, such as
barley, wheat and oats as well as potatoes, soil yield indicators such as kilogram
crop per hectare has doubled or tripled in the last few decades [1].15
Albeit the increasing pressure for productivity, many governments and non-
governmental organizations push farmers to use more environmental friendly
procedures and agricultural methods. Sustainable farming methodologies are
also increasingly being required by end consumers. Consumer awareness that
their buying decision at each visit to the supermarket can positively influence20
social and environmental equilibrium has brought about several brands making
claims on sustainable methods of farming on their labels. This strategy started
with organic production and Fair Trade, but in recent years has grown to a wide
variety of certification labels, with the coffee sector experiencing the largest de-
velopment. This trend is not unique to the coffee sector; similar certifications25
2
are being developed for sustainable cocoa, pineapple, cattle and palm oil. This
strategy is growing and proving an important potential in changing how our
food is produced.”
1.2. Organic Standards and Certification
In 1990, US Congress passed the Organic Foods Production Act (OFPA)30
establishing standards for agricultural producers of commodities that claimed
to use organic methods. The methods, practices, and substances used in agri-
cultural practice including sowing, growing and harvesting as well as handling
crops, livestock, and processed agricultural products restrict the wording on the
products labels and marketing. “Although specific practices and materials used35
by organic operations may vary, the standards require every aspect of organic
production and handling to comply with the provisions of the Organic Foods
Production Act.” [2]
Since OFPA, the U S consumer has been continuously increasing his/her
awareness for organic foods (organics). This has been reflected in the volume of40
sales of brands that claim to use organic production processes. In the groceries
segment, this demand has grown more rapidly than the domestic production
could follow. The consequence is that a significative part of the sales of organic
grocery goods in the US are from international origin. [3] reports ”Studies show
that 40 % of organic foods consumed in the United States are imported from over45
100 foreign countries.” The increasing volume and the broad sources of interna-
tional production of United States Department of Agriculture (USDA) organic
certified products as well as other sustainability and social claims and make the
certification and control along the supply chain difficult to track, generating the
need for better control methodologies. [3] concludes that “the current regulatory50
framework is not only inadequate to the task of regulating domestic organics,
but also incapable of ensuring the integrity of imported organics. Thus, the
”USDA Organic seal misleads consumers”.
1.3. Greenwashing
[4] defined the term Green-washing as ”communication that misleads peo-55
3
ple into forming overly positive beliefs about an organization’s environmental
practices or products”. According to according to advertising consultancy Ter-
raChoice Environmental Marketing apud [5] ”Although greenwashing has been
around for many years, its use has escalated sharply in recent years as compa-
nies have strived to meet escalating consumer demand for greener products and60
services,”
1.4. Need for Third Party Certification
[6] argues that promoting ecosystem services that increase customer aware-
ness can be achieved through various initiatives, one of the most effective being
certification: “Product certification is one of the most promising and developed65
instruments to reward the socially and environmentally friendly practices of
market producers.”
Third party certification (TPC) differs from first and second party certifi-
cation in so far as that the third party authority that issues the certificate has
absolutely no interest in the transaction. A TPC involves an [7] ”independent70
Organisation with expertise to provide an assessment and verification of the
company’s compliance with standards and or legal requirements.”
In the last years, TPC has became a relevant and growing regulatory mech-
anism in the global agricultural and food industries. This trend represents a
major shift from public to private governance demands and methods. The rise75
of TPC in the agrofood segment will allow for more transparency and account-
ability of negligent or fraudulent market participants. This phenomenon is akin
to the great advances in quality and transparency that the third party certifica-
tion trend brought about by the ISO2001 certification of industries and services
in the last decades.80
TPC can be very useful to ascertain product physical, chemical or organolep-
tic properties and is allowing bolder limits in the certification of social, envi-
ronmental and sustainability properties. [8] reports : ”TPC also offers oppor-
tunities to create alternative practices that are more socially and environmen-
tally sustainable”. The opportunities are manyfold and could provide solutions85
4
to “certification programs for child and forced labor, environmental hazards,
genetic engineering, health and welfare issues related to agricultural laborers,
animal welfare, or food safety. ”
One very important initiative for more socially balanced interactions between
consumers and developing economies is Fairtrade 2. Fairtrade focuses on social90
and environmental properties of different crops, specially coffee tea fruit juice
sugar as well as cacao, bananas.
Traceability for coffee, tea, fruit juice, sugar and cacao is extremely difficult
and can limit sales for farmers. “Fairtrade and many other certifiers operate
a traceability program type known as ‘mass balance’ to ensure farmers and95
workers have maximum opportunities to sell their certified crops.“ 3
1.5. Certification of Farms versus Certification of each Harvest
Although the farming methods and procedures may be certified according
to criteria such as quality, sustainability or social fairness , there is no form of
ensuring that through a certification of the typical farming methods, such as100
USDA Organic certification methodology, the specific instance of food that has
just reached your plate had no minor agrochemical dosage deviation or used
hidden child labour during the few days of the harvest.
Each harvest of a specific crop is unique. The difference may lie in the seeds
used for that particular season, or in the amount of sunshine that occurred in105
that specific location during the crop’s growth.
In several agricultural sectors, specially in the wine trade, consumers recog-
nize the crop timing and the differences in quality or characteristics between har-
vest of different years even from the same farm. The analysis of the organoleptic
properties of the wine produced recognizes the major differences in year and lo-110
cation of the harvest of grapes.
A well known problem, in the wine sector, is the wine counterfeit problem.
2https://www.fairtrade.net/about/supply-chain-traceability
3https://www.fairtrade.net/about/supply-chain-traceability
5
This resides in the difficulty in avoiding that larger quantities of the more valu-
able wine, i.e. wine made from grapes harvested on better years or regions,
reaches retail than the volume actually produced. This fraud is also known as115
“mass balance problem“ [9] and is very deleterious to the top brands, since it
can stain the reputation of the premium producers.
Geographic traceability to a region is often desired and protected by local
laws under the protected designation of origin (PDO) concept. Although so-
phisticated analytical methods such as plant DNA tracing or fingerprinting by120
Nuclear Magnetic Resonance (NMR) are known, an easy and accurate method
for consumers to avoid fraudulent designation of origin of premium agro prod-
ucts using mobile devices is necessary. A harvest TPC mechanism with tamper
free certificates available to any stakeholder via internet would boost trust along
the supply chain.125
1.6. Main Concepts in Traceability of Foods
Literature on traceability of foods has established some important concepts:
• “Traceable Resource Unit” (TRU), originally defined in [see 10, 12] for
batch processing of foods, was adapted by the ISO 22005/2007 (ISO
22005:2007 Traceability in the feed and food chain General principles and130
basic requirements for system design and implementation 4
• “Traceable Lot” is defined as the “set of units of a product which has been
produced or processed or packaged under similar conditions”. “Granular-
ity” [11] describes the level and the size of the units in a traceability
system135
• “Critical Tracking Event” (CTE) 5 is understood as any circumstance in
which a TRU suffers change of ownership or custody or looses part or all
its mass ( also known as partial or total depletion of the product )
4https://www.iso. org/standard/36297.html.
5http://www.ift.org/gftc/ /media/GFTC/Events/BestPracticesinFoodTraceability.pdf
6
These concepts are crucial to food traceability and food recall actions.
1.7. Economic Incentives140
Important segments of consumers are willing to pay more for products that
are certified as eco-friendly or socially fair. This premium in price should be
shared by stakeholders along the chain. The incentive for farmers to use more
sustainable and socially accepted farming procedures must revert as economic
benefit to the farmers, [12] ” New incentives and policies for ensuring the sus-145
tainability of agriculture and ecosystem services will be crucial if we are to meet
the demands of improving yields without compromising environmental integrity
or public health.
Recent advances in information technology have shown that blockchain to-
kens, i.e. digital tamper resistant tradeable representation of an asset or right,150
disciplined through smart contracts can play an important role in harvests or
food certification. The token can be issued to include specific information on
the asset that it represents (non fungible unique items) . These tokens can be
issued by the authority performing the TPC thus imposing credibility.
We propose to use Ethereum based tokens for keeping track of each harvest155
of each farm, using the benefits of a TPC. In this manner we will show that
it is possible to track and trace the exact origin and quantity of each harvest
from farm to consumer with full TPC, creating proper economic incentives to
the chain participants.
1.8. Structure of this document160
This paper is structured as follows. Section 2 presents relevant concepts and
literature of blockchain and distributed ledger technology (DLT), the design of
Ethereum based non fungible token (NFT) that act as digital twins represent-
ing quantifiable crop harvest instances. This allows TPC of each harvest by
authorities that will publish their audit report at their website. The unified165
resource locator (url) of this certificate can be conveyed along the chain to con-
sumers through a self sustained incentive mechanism. Section 3 discusses the
7
implementation of a token framework including the ERC-1155 smart contracts
methods . In Section 4, analyses the results obtained. Section 5 presents the
conclusions pinpointing the research’s main contributions.170
2. Related Work
2.1. Blockchain
Bitcoin [13], the first successful cryptocurrency, was capable, for the first
time, to validate the concept of a scarce digital object. The blockchain, the
replication of an unknown number of copies of a consistent data , namely a175
chain of blocks containing transactions could, for the first time reach a consen-
sus such that almost irrespective of the numbers of unreliable (traitor) nodes,
albeit the eventually unsynchronized nature of the protocol and possible tem-
porary partitions in the network, the linear block of data remained available.
The protocols behind Bitcoin, namely the blockchain mechanism is maintained180
by worker nodes. These nodes are referred to as miners because they receive
rewards in the form of Bitcoins to find keep a distributed consensus among the
various persistent data sources. Thus, consistency of distributed data within a
predetermined frame of time is achieved avoiding the “double spending” [14] of
the digital asset.185
The blockchain consist of collaborative DLT replicated in several physical
locations, capable of maintaining consistency of the information stored in it’s
blocks of time sequential transactions. This allows for independent companies
doing business over a production and marketing chain — such as raw material
producers and crop growers, processingcompanies, re-packers, transportation190
companies, distributors and retailers — to record concurrent transactions se-
quentially on a sequential global basis. “The blockchain technology as a founda-
tion for DLT offers an innovative platform for a new decentralized and transpar-
ent transaction mechanism in industries and businesses. The inherited charac-
teristics of this technology enhances trust through transparency and traceability195
within any transaction of data, goods, and financial resources.” [15].
8
The technology behind blockchain successfully implements consistency and
access discipline for collaborative data in the form of DLT in a trust-less environ-
ment. The consistency achieved by the underlying data structures and control
mechanisms with validation through the consensus of third party validators or200
miners show that this technology is an important step towards supply chain
transparency and traceability data [16].
Blockchains are cryptographically auditable, append only, tamper resistant,
distributed data structures accessible to anyone by means of a web browser
(smart contracts). Blockchains require no central trust mechanism hence, no205
central point of failure. Blockchain Technology (BCT) main strengths are:
• Tamper resistant, i.e. cryptographic hashes to previous block, in practice,
make it impossible to change data that has been recorded;
• Pseudo anonymity : data is available publicly but encoded through hashed
keys that allow for trust on the existence and on the authorship;210
• Distributed presence: the data structures are replicated maintaining sev-
eral copies with no single point of failure keeping full integrity between
data sets;
• Software driven, i.e. the Blockchain mechanism does not require human
privileged operators to maintain the transactions, thus the system is not215
prone to bribery;
• Allows for certification of the tamper proof storage of off-chain volumes
of data by means of side blockchain.These are hierarchically certified sub-
Blockchains database which can store much more data, including multi-
media, providing evidence and tools for more detailed analysis,220
The BCT disadvantages are:
• Very high energy consumption for the blockchains using the Proof-of-Work
(PoW) consensus [17]
• Slow confirmation of transactions, typically 10 to 20 minutes for bitcoin
9
• Difficulties in Scalability225
2.2. Smart Contracts and Distributed Ledger Technology(DLT)
Ethereum [18] expanded the concept of the Blockchain to include tokens
and programs called smart contracts that are executed independent of human
intervention. These are open source, human readable high level programs that
are stored on the blockchain and run as implemented avoiding any risk of down-230
time, censorship, or fraud without any human intervention [19]. Smart contracts
are open source code that determines standard behaviours between blockchain
stakeholders and other contracts. They are intimately linked to BCT and al-
low for extensive development and precise control ensuring transparency of each
data manipulation and thus trust. Tokens are digital objects capable of repre-235
sentation properties, assets or rights that have strict transactional behaviour and
ownership. The execution of the smart contracts is immune to any human inter-
ference and allows for a transparent systematic behaviour and the corresponding
state transitions of token balances expanding the blockchain utility. This assures
transparency and prevention mechanism to possible ”double-spending” frauds240
for the ingredient chain certification system.
DLT use tokens commanded by smart contracts with ordered time stamped
transactions within a decentralized disciplined behaviour. The main character-
istic of a DLT system is the use an immutable ordered list of transactions as a
replicated distributed ledger. DLT uses linked blocks, to order transactions of245
possibly different tokens and to store the smart contracts. The name DLT is
due to data objects and methods (smart contracts) not being stored in a single
computer, rather across a unknown number of computers in different physical
locations. Key to the functionality of DLTs is the consensus mechanism 6 , a
protocol maintained by validators , sometimes called miners, ensuring that the250
entire network collectively agrees on the exact contents of the ledger. DLT of-
fers a secure, distributed way to perform transactions among different untrusted
6https://hackernoon.com/consensus-mechanisms-explained-pow-vs-pos-89951c66ae10
10
parties. Via smart contracts, manufacturers can develop scalable and flexible
businesses at a lower cost, and the overall effectiveness of manufacturing ser-
vices can be improved [20]. Further, smart contracts lower transaction costs by255
avoiding the need for paperwork or any third-party involvement [21].
2.3. Blockchain Architectures: Public v Private Read , Permissionless v Per-
missioned Write and Validate
The access permissions to reading, writing and validating blocks on a Blockchain
system follow different discipline models.260
In order to read we distinguish: public blockchain, which allow universal
read operations; from private blockchain: which allow read operations only to
predefined users. Further in order to be allowed to write and commit (validate)
blocks operations, two types of blockchain are distinguished: permissionless
blockchain: allow universal write and commit commands; as opposed to per-265
missioned blockchain: where only pre-qualified users are allowed to issue write
or commit commands. Table 1 summarizes these architectures.
Table 1: Types of blockchain architectures
Public Permission-
less Blockchain
Public Permis-
sioned Blockchain
Private Permis-
sioned Blockchain
Read access Universal Universal Only pre qualified
readers
Write access Universal Only pre qualified
writers
Only pre qualified
writers
Commit access Universal ( any
node can be a
validator/miner)
Only pre qualified
validators
Only pre qualified
validators
Example Ethereum EOS/Ripple Hyperledger Fabric
If harvest are to be certified for the benefit of the entire chain of stakeholders
in the food industry, which type of data structure would be required to keep
this information useful and trustworthy. In other words, is it necessary to use a270
11
blockchain to make the intended TPC of Harvests information available to all
stakeholders?
Figure 1 adapted from [22] shows a flowchart approach that helps analyse
the data structure requirement for distributed systems. Note that our partic-
ular requirements for TPC of Harvest in the Food Supply Chain leads to the275
use of public permissionless blockchain as the best architecture. Applying the
flowchart to the TPC of harvest we would ask:
• Is there a need to store current State (Chain of Custody along Supply
Chain)? YES
• Is a Trusted Third party available? NO280
• Is there a need WRITE access OUTSIDE your organization? YES, be-
cause of the possibly many unknown chain participants.
• Are all Writers known ? NO.
thus the best option is Public Permissionless Blockchain.
2.4. Digital Tokens Families285
Tokens are digital objects that represent specific rights or assets. In order to
be useful they cannot be copied or changed at will, rather, they need to follow
strict discipline at each change of state or change of custody so as to be useful
to represent real world objects.
The development of digital objects to simulate real world objects requires290
that the objects properties and behaviours are modeled through coded pro-
cedure. Smart contracts manipulating tokens must respect some standard to
allow for multiple users and contracts to share functionalities among different
applications. This minimum set of functionalities for fungible objects such as
currencies allowed bitcoin and specially Ethereum decentralized applications295
using the ERC-20 token flourish.
12
Figure1: What type of database or blockchain is required?
2.5. Non Fungible Objects and Non Fungible Tokens
A specific harvest is an unique object. No other harvest possesses the exact
same properties. Thus it is a non fungible physical object. To represent this
object appropriately it is necessary to capture and record all relevant data.300
A non-fungible token (NFT) is a unique blockchain-based digital object
which can represent and be traded as an asset between various stakeholder
in possibly multiple applications.
A NFT has one identifier that points to a specific URL, where all its prop-
erties and details can be verified. It is, thus, easy to confirm that the token is305
unique and inspect all of its characteristics.
The blockchain discipline and the methods and behaviours being enforced by
smart contracts using the ERC-1155 standard will assure that complete families
of similar but yet unique objects guarantee consistent behaviour, transparency
, no double spending and a consistent auditable trail.310
Fungible assets are are identical in the sense that for the required practical
13
usage there is no manner or need to tell one unit apart from another.
Examples are:
• bushels of grain of same specification;
• cash;315
• gold bars with the same weight and format;
• new industrial products that have the same colour, shape and optionals;
In general, goods that are sets of assets that can be stacked on top of each
other with no ability to tell one from another.
A non-fungible token could be a handcrafted gold jewel with a person’s320
initials engraved on it, as opposed to a fungible token being a gold block no
unique markings on it.
Further, every fungible token represents the exact same value, while non-
fungible tokens hold unique values, related to possibly subjective issues, based
on its individuality or uniqueness.325
The distinctive property between fungible and non fungible tokens is that
the former they are fully exchangeable and thus can be added, e.g. coins of
same face type and value can be added or subtracted at will. The latter, not
being exchangeable, can only be transactioned within their category. Therefore
it is acceptable to add or subtract coffee beans of the same harvest. The process330
involves proposing , discussing and optimization of code under a strict discipline
. In the Ethereum ecosystems these standard are documented under the code
name ERC (Ethereum Request for Comments)
Behaviour of digital objects simulate the behaviour of the real life objects
that need be modeled.335
• ERC-20 7 was designed to fulfill the needs of divisible fungible objects and
therefore is suited for commodities or currency type objects , This ERC-20
7https://eips.ethereum.org/EIPS/eip-20
14
standard became very popular and later was corrected introducing error
and protection mechanism to avoid attacks through standard code for
safely.340
• ERC-721 8 was designed to fulfill the needs of indivisible non fungible
objects and therefore is suited for unique single objects. The first use
cases are for ”collectibles” in games such as Cryptokittens 9 .
• ERC-1155 10 was designed to fulfill the needs of creating and manipulat-
ing families of two or more non fungible objects and therefore is suited for345
representing unique items within a family. These are objects that have
unique characteristics within a family of similar , but distinguishable ob-
jects, The ERC-1155 standard is more efficient as far as the coding and
the execution of applications.
Table 2 summarizes and compares the applicability of each standard.350
Table 3 lists and compares the primitive methods in each token standards.
Note that the methods marked with an asterisk write to the Blockchain, whereas
the others are simple read operations.
2.6. Applications of BCT and DLT to Supply Chain Management
DLT has the potential to monitor social and environmental responsibility,355
improve provenance information, facilitate mobile payments, credits and financ-
ing, decrease transaction fees, and facilitate real-time management of supply
chain transactions in a secure and trustworthy way. DLT has brought about a
great deal of interest in several fields of applied research. Many Blockchain use
cases are being developed [23]. Recent academic review from [24] enumerate a360
broad palette of use cases that take advantage of BCT and shows a structured
classification of the many use-cases.
8https://github.com/ethereum/EIPs/blob/master/EIPS/eip-721.md
9https://www.cryptokitties.co/
10https://github.com/ethereum/EIPs/blob/master/EIPS/eip-1155.md
15
Table 2: Comparison of Ethereum Request for Comments (ERC).
Ethereum Request
for Comments
(ERC)
20 721 1155
Nature of token Fungible Non Fungible Fungible / Non
Fungible
Limitation One smart con-
tract creates only
a unique type of
token
This ERC can only
create Non Fungi-
ble tokens
This ERC can cre-
ate Fungible and
Non Fungible to-
kens
Costs of transac-
tion
Cheaper Expensive Cheaper
Efficiency Low High for one of a
Kind Object Low
for Family of Ob-
ject
High
Example EOS CryptoKittens Enjin
16
Table 3: Comparison of different ERC functions.
Function ERC-20 ERC-721 ERC-1155
name yes yes yes
symbol yes yes yes
transferSingle no no yes
transferBatch no no yes
decimals yes yes no
totalSupply yes yes no
balanceOf yes yes yes
URI no no yes
balanceOfBatch no no yes
isApprovedForAll no no yes
transfer* yes yes no
transferFrom* yes yes no
safeTransferFrom* no no yes
safeBatchTransferFrom* no no yes
setApprovalForAll* no no yes
approve* yes yes no
approvalForAll* no no yes
allowance* yes yes no
17
Research literature including keywords such as ”supply chain”, ”food trace-
ability” and ”blockchain technology” covers many interesting use cases. [25],
[26], [27], [28] have discussed benefits of using DLT to promote trust among the365
supply chain participants for food traceability .
Because supply chain of foods involves many stakeholders and many CTEs,
the traceability of foods is an important fields with increasing researcher’s in-
terest. Indeed DLT can boost the information provenance to food ingredients.
By means of DLT systems , the recall of potentially contaminated products370
can be traced more effectively and the volume of recalled products can be re-
duced. Further, existing social issues such as unfair pricing and the influence
of economic power have historically limited the environmental/sustainability of
smaller farms. Blockchain could help fair pricing through the value chain. A
further benefit is increasing consumer awareness and empowerment.375
From several blockchain use cases reported in [29], five were traceability or
supply chain management examples. They are mostly smart contract based
decentralized applications implemented as Ethereum use case focusing on the
pedigree of historical data of physical assets for traceability and anti-counterfeit
purposes. Provenance (from the French ”provenir” meaning ”to come from”),380
relates to the chronological chain of custody or location of an object. Originally
used for works of art, the term has became broader today to denote back-
ward traceability of any objects including intellectual property. To establish
the provenance of an object is to keep reliable documentation on the transfer of
custody of each asset.385
A good example of provenance applied to agricultural supply chain is iFinca,
a blockchain traceability web based system to trace coffee beans from farm to
cup 11 . iFinca lacks, however , the third party certification and the harvest
instance information.
11https://ifinca.co/
18
2.7. Consumer Valued Properties Tokens in Agro Products390
Is a specific harvest of a specific crop a fungible object or a non fungible
object ?
For decades, important crops have been traded as commodities. Commodi-
ties are intrinsically fungible. Once the product is classified in a certain grade,
accordingto purity, size or maximum cross contamination levels, then the lot395
is handled as a commodity. Global trading activities require that a bushel of
wheat is fully fungible with another bushel of wheat.
In the context of other agricultural products, however, it is important to
distinguish that each harvest may have unique factors that influence the quality
of the harvest at specific year. These include location of farm, soil preparation400
methods, seeds, growing , harvesting and storage processes. Did sowing or
harvesting start late? Was the season too wet not sunny or too dry ? Was a
regular workforce used during the growing and harvesting? Which type of seeds
were used? Were different agro chemicals used in that particular year? Was
the crop harvested at locations which devastated jungle? Was the crop grown405
under fair labour conditions? This information is becoming more relevant to
consumers
Consumers are becoming more demanding and require different processes
and raw-materials in food they consume. Claims such as: “non-genetic-modified
seeds”, “organic crop cultures”, “agro-chemical free”, gluten-free” are more410
present in food labels and adverts than ever. Nevertheless food suppliers are
seldom willing to provide evidence for those claims. In many cases the claims
cannot be evidenced and must be understood as mere “ green-washing”.
Increased consumer awareness would put pressure for more transparent, sus-
tainable, safe and fair practices in food production. Since consumers are over-415
whelmed by the amount and complexity of certification labels, blockchain tech-
nology seems to have positive influences on consumers’ purchasing decisions”
[30].
[31] have described a DLT based system to record a specific harvest from
seed supplier to end customer based smart contracts. The mechanism solves the420
19
needs for registering each step of the value chain, but does not allow for a third
party (authority) certification, therefore is more prone to fraud. Further the
cumbersome recording of each link in the chain needs some type of incentives.
Only with appropriate incentives for the transacting parties would there be a
systematic recording is not clearly defined as the credibility.425
[32] showed that using Ethereum blockchain smart contracts and a new to-
ken, named IGR allow consumers to evidence TPC for any “consumer value
perceived property”. This includes physical, biological, social or environmen-
tal characteristics. The framework was developed for TPc without requiring
brand owners of commingled products to make public their trade secrets such430
as recipes or ingredient supplier names. The IGR token introduces a higher level
of trust in the relationship between consumers and the commingler’s claims on
labels of a large spectrum of foods such as prepared foods , baked goods and
other type of commingled foods. The framework can be optimized with the use
of NFT that better represent each instance of a crop.435
3. Proposed Architecture
3.1. Implementation
We propose to modify the IGR token 12 used for ingredient certification
in [32]: i.e. a public blockchain, smart contract token synchronization frame-
work to positively identify each harvest along the food supply chain to the end440
consumer. Using the IGRtoken set of smart contract after modifications to
ERC-1155, the farmer,responsible for the harvest, can choose the properties to
be certified and the authority that will audit the harvest. The authority then
audits the farm and issues the exact number of tokens to match the numerical
yield of the harvest in grams. The authority also publishes the certificate(s)445
at it’s website. The ERC-1155 unified resource identifiers (URI) descriptor will
contain the full technical details of the certified “consumer valued properties”.
12source smart contract code available at https:://etherscan.io/address/igrtoken.eth
20
Figure 2: Synchronization of Food Lots of harvests and traceability Token (adapted from [32])
The token flow follows the flow of commercial transactional changes of custody
or depletion of the product. Figure 2 shows the synchronization between flow
of food lots and the certification data. The necessary information in order to450
evidence to a final consumer that a certain harvest ingredient was effectively cer-
tified by a third party or contains some “consumer value property” is accessible
through a URI link.
The initiative of defining a “consumer value property” comes from the farmer,
but requires that a certification authority confirms the scope, quantity and date455
of the lot produced and generates a web page, i.e. url under the authority s web
domain certifying this information. This lot of ingredients will than be awarded
an appropriate quantity of IGR tokens. For simplicity we define one IGR to
be 1 gram of any certified ingredient irrespective of the nature of the property.
The authority issues IGR tokens through a smart contract based on evidences460
such as nature, quantity, location and time of the harvest. The full details are
made public through his website.
At each CTE where changes of ownership, custody or quantities of the raw-
material are involved, a smart contract captures the linkage and quantity pa-
21
Figure 3: UML class diagram for the re implementation of the IGR Token (adapted from [32])
rameters. This would serve the purpose of disciplined token transfer without465
disclosure of intellectual or business critical data.
At the final link, a consumer, by means of a mobile application, is be able
scan the stock keeping unit (SKU) code and lot number to confirm the certi-
fication urls. The transfer the custody of the physical product and the tokens
are synchronized to the final consumer.470
The IGRtoken suite of ERC-20 smart contracts was optimized to use the
ERC-1155 and deployed at the Rinkeby testnet. Figure 3 - shows the UML
class diagram for the implementation
3.2. Incentives along the Chain
In order to cover the extra efforts with traceability documentation and data475
administration the farmer and other stakeholders along the chain need some type
of incentive. This is intrinsic to the framework since the farmer that decides to
certify his or her product will be able to ask for higher sales price for his crop.
Similarly, each participant in the custody chain can request a premium due to
the fact that the merchandise is differentiated from a mere commodity.480
22
4. Discussion
To meet the requirements of a third party certification scheme capable of
certifying both physical properties as well as social properties, we develop a
Ethereum token based set of smart contracts capable of identifying in an unique
form the quantities and the certificate URL involved.485
The framework allows farmers to certify a specific harvest by any desired
certification body, hereafter referred to as authority. The Authority will visit
and audit the farm at the time of the harvest and testify the property to be
inserted in the Certificate to be published at the authorities web site
This paper has been significantly extended previous work [32], which dis-490
cussed main aspects of the traceability of commingled foods. The present re-
search expands the framework to allow for non fungible objects such as harvests
of food products to be certified as unique objects . It has a major new focus on
the validation, conception and usability of the smart contracts for TPC of non
fungible objects.495
5. Conclusion
Farmers are under pressure to use more sustainable farming methodologies
and simultaneously become more competitive. Some producers use labels in-
ducing customers to believe that their harvest are environmentally and socially
friendly without proper evidence. Avoiding greenwashing and promoting con-500
sumer trust points to TPC of each harvest instance with easy and reliable pub-
licity of the certificates.Consumers need to track each change of custodyof the
harvested crop along the chain. The selling of tokens alongside the transfer of
product at each of the transactions in the chain provides the natural economic
incentives. Because the tokens are non fungible tokens representing one harvest505
cannot be added to tokens representing another harvest. This behaviour is con-
sistent with the commercial practice. Mixing products that do not share the
same properties is not desired and could be seen as contamination of a more
valuable product. A DLT in the form of an Ethereum blockchain token IGR
23
token modified to non fungible token methods is proposed to fill this gap. The510
framework enables the use of non fungible tokens based on the ERC-1155 stan-
dard methods to support TPC on a harvest to harvest basis, as opposed to the
Fairtrade or USDA Organic farm process certification. Main advantages of the
framework is: low cost of transaction, incentives provided to each traceability
partner in the chain, and avoiding the ”double spending” issue. The main con-515
tribution of this research is to allow for effective harvest instance certification,
as opposed to farm certification , with true TPC in the form of a certificate
URI at the authority’s website made available to any stakeholder via a mobile
application. Note that the authority can be freely chosen by the farmer. The
architecture brings about an economic incentive to each and all stakeholders520
along the typical agro supply chain links. These contributions provide trust
along the supply chain, inhibiting typical “greenwashing” attempts seen today.
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References555
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28
	Introduction
	Modern Farming Landscape
	Organic Standards and Certification
	Greenwashing
	Need for Third Party Certification
	Certification of Farms versus Certification of each Harvest 
	Main Concepts in Traceability of Foods
	Economic Incentives
	Structure of this document
	Related Work
	Blockchain
	Smart Contracts and Distributed Ledger Technology(DLT)
	Blockchain Architectures: Public v Private Read , Permissionless v Permissioned Write and Validate
	Digital Tokens Families
	Non Fungible Objects and Non Fungible Tokens
	Applications of BCT and DLT to Supply Chain Management
	Consumer Valued Properties Tokens in Agro Products
	Proposed Architecture
	Implementation
	Incentives along the Chain
	Discussion
	Conclusion
	The Elsevier article class
	Front matter
	Bibliography styles