Digitising Thailand’s food chain: National traceability system to focus on organic products first – government insights
TraceThai is currently being housed under the Ministry of Commerce, and is just one of the first steps in the government’s plan to familiarize the local food and agricultural industry with technologies such as blockchain, AI and big data.
“We identified the food and agriculture industry as a key sector to be digitized primarily because many locals, at least 30% according to latest numbers, make up the active workforce in farming and food activities so this sector has a huge impact on Thailand’s national livelihood, economic development, incomes and much more,” Thailand Ministry of Commerce Trade Policy and Strategy Office Director Pimchanok Wonkhorporn told FoodNavigator-Asia.
“That’s why we decided that it really is time for the food and agriculture sector to be digitized, and to do this it really needs to be more exposed to technology megatrends such as blockchain, AI and big data to be upgraded.
“So TraceThai was developed as a national traceability system because we did a further in-house study and found that traceability is really the key to future development of the industry especially when it comes to trade with foreign markets as there will be such needs when it comes to ensuring food safety, sustainability, transparency and making assurances over social and labour concerns.”
She added that due to cost concerns, at the moment the government will be limiting the use of TraceThai to organic products, and it has already started a pilot with organic rice.
“Using blockchain does carry a cost, so we decided that it would be more appropriate to use this with high-value products. Organic rice was selected as the first pilot product because not only is it high-value, rice is also widely consumed and the organic certification system in Thailand carries rather elaborate licensing and regulatory requirements, so it is a good place to start,” said Wonkhorporn.
“We have also seen the potential of using TraceThai for other products, although after consultations we’ve decided that we will confine the expansion of the system to organic products first in order to maintain its credibility.
“So we will first expand to organic fruits, vegetables and other products, and are also looking at potentially using this for products protected under the Geographical Indication (GI) scheme – though the GI certification process is actually not yet as tightly regulated as organic, so this will be examined closely first.
“That’s not to say that this system won’t be expanded further to other food products in the future – but we will want to stabilise it with organic product tracking first.”
Food and agricultural stakeholders from farmers to millers to supermarkets will be expected to already have the necessary organic certifications when signing up to use the TraceThai system. In Thailand, this involves certification from government or private certification bodies who will examine processes at the farmer, miller, packer and retail levels in addition to various licences from the ministries of agriculture, commerce and finance.
“It’s a pretty tightly controlled process, and TraceThai will not be doing the actual certification, but what we want to do is organise the trade facilitation as seamlessly as possible – we don’t want to add extra burden to any users, so it will be just a simple keying in of common information to the system, which will automatically distribute this to the relevant agencies for confirmation and approval,” said Wonkhorporn.
“We’ve had farmers voice concerns about data privacy violation and being afraid that inputting their information will give out access to confidential information like prices, so want to stress that there are different levels of confidentiality access for all users, and no one will be able to view sensitive information about their products or organisations.”
Traceability and marketability
TraceThai makes use of QR codes empowered and encrypted by blockchain to not only maintain data protection, but also prevent data falsification, which is expected to boost consumer confidence in Thai organic products.
“Traceability has become ever more important for food and agriculture ever since COVID-19 hit the region, as consumers are demanding more information and assurance on food safety and transparency,” Wonkhorporn said.
“In addition, apart from the usual product origin, processing and farmer information, TraceThai users can also input the stories behind their organic products into their specified webpage, so that consumers scanning these QR codes will get access to these – and the hope is that this can end up being utilised as a marketing tool as well.”
Trade facilitation and system future
Beyond being just a traceability system for organic food products, the government is expecting TraceThai to be fully integrated into a national-level trade facilitation platform that it is developing together with the private sector for exports in the future.
“We want to make this a key trade facilitation tool and have already been working on several requested improvements for this, including making information available in English to ease communication with foreign importers of Thai foods,” she said.
“We’re now also looking at how to optimise the system such that it can integrate with different organic certification systems from say Japan, EU, Australia and so on so we can accommodate other importing countries too.”
At present, TraceThai is working with 17 organic producer groups, each comprising various farmers, on their pilot system in different provinces, and is looking to boost this number up in the coming year by working with the Bank for Agriculture and Agricultural Cooperatives (BAAC).
“The BAAC works with many people in rural Thailand and also wants to modernise the food and agriculture industry, so we’re partnering with them to bring more users into the system – we’re hoping to bring the number into the hundreds, maybe even a thousand by the end of next year out of the 20,000 organic rice producers that exist in the country,” said Wonkhorporn.
“On our end, we will be working to bring in more downstream trade and marketing participants such as retail supermarkets, importers, exporters, perhaps even financial institutions.”
For the first three years at least, government funding will be in place so all participation will not incur any fees, though she added that the expectation is for the system to become a paid but self-sustaining one.
“I do believe that eventually TraceThai will be able to generate income by collecting minimal fees, say from certification bodies or supermarkets, so it can become self-sustaining like what the Intellectual Property system is doing – but that is not to say we want this to be a money-making venture as the aim as a government-backed system is for this to help farmers and facilitate Thailand trade,” she said.
“But for the next few years this will be government-funded first to expand it as much as possible first – after that when it stabilises then we’ll take a closer look at how operations will go.
“So for the near future, more immediately the aim is to find more stakeholders, then next year expand to other organic products and link to the Thai National Single Window (electronic trade facilitation system) and in 2022 link further to utilise satellite data and AI in the system so it can evolve to make predictions about rice production volumes and prices too.”