The Trade Policy and Strategy Office (TPSO) announced that it will use blockchain technology for production-to-export traceability of agricultural products, starting with organic rice, so as to build confidence among buyers.
The project will start as soon as the Office receives the operating budget for fiscal 2020 and TPSO will also accelerate discussions with blockchain experts, related authorities, and financial institutions to speed up the development of blockchain system.
The agency has already talked with farmers and some 5,000 growers from Surin province will participate in this project. The project is expected to start in the middle of the next year, and if successful, will be extended to other agricultural products.
The blockchain system will be able to trace the process from cultivation, which involves a camera being installed in the rice fields to check where it was grown and whether it is really organic rice, while the production or packaging process can verify where it was produced.
The certification process checks the department that serves as the inspector and issues the certificate, while the financial institutions who act as the payment intermediary after the rice are sold provide the information on the buyer and the country of export.
The system will help instil confidence in Thai organic rice, reducing problems of buyer’s rejection, product adulteration, and licence subrogation in order to increase the bargaining power and add more value to the product, as well as creating opportunities for expanding export markets.
The buyers can check the source of organic rice. If they have a problem such as finding that it is not organic rice, they will be able to reject it.
The blockchain project couldn’t have come at a more vital time. Another recent report noted that on 25 November 2019, the Agriculture and Cooperatives Minister had submitted a second list of rice manufacturers to China and that its government promised it would finish the registration process under its import scheme as soon as possible.
The Minister’s statement came after he met with the Deputy Minister of the General Administration of Customs, China (GACC).
Rice exported from Thailand has gained huge popularity in China. The Thai government had previously submitted the first batch of rice manufacturers’ names for the GACC’s consideration based on product quality and their safety standard, and 49 exporters were given approval, comprising both large manufacturers and SMEs.
China’s willingness to consider a second batch is a positive sign, which could pave the way for additional exports of 1 million tonnes of rice to China estimated at Bt27 billion.
The agriculture minister also said he and China’s GACC Deputy Minister discussed opportunities to export more agricultural products from Thailand to China, including processed tapioca and fruits, frozen pork, live cattle, and bird nests.
The two also discussed the possibility to export fruits via the newly opened Dongxing border checkpoint, which Thai exporters can use to conveniently transport their products by land. The checkpoint is located only 150 metres away from the Mong Cai agricultural market.
GACC officials have acknowledged Thailand’s offers and promised to work out agreements that favour both countries as soon as possible.
As exports increase so does the threat of quality and false verification, the blockchain technology, if hopefully scaled up, could aid in inter-country trade relations as well, enabling all parties to rest assured in the strength and veracity of the supply chain.