Blockchain traceability valuation for perishable agricultural products: Balancing economic benefit and social impact

The adoption of blockchain-enabled traceability systems in agricultural supply chains offers farmers a means to reduce demand uncertainty. However, downstream retailers gain full visibility into product freshness, enabling selective purchases that may inadvertently increase food waste. This study evaluates the impact of such a traceability system by analyzing agricultural supply chain transactions under two scenarios: with and without blockchain implementation. By comparing order quantities and farmer profits in both cases, we find that blockchain adoption can enhance product sales because the smart contract effect. We also find that blockchain adoption can either amplify the bullwhip effect when circulation time is short or mitigate it when circulation time is long. The interaction between the bullwhip effect and the smart contract effect impacts the farmer’s profit. The farmer achieves higher profits using the blockchain-enabled traceability system if the smart contract effect outweighs the bullwhip effect. Furthermore, adoption costs play a crucial role in determining feasibility. Beyond economic implications, blockchain-enabled traceability systems also influence social outcomes, particularly in reducing food waste. Our analysis reveals four possible outcomes based on economic benefits and social impact: (i) win-win (higher profits and reduced waste), (ii) win-lose (higher profits but increased waste), (iii) lose-win (lower profits but reduced waste), and (iv) lose-lose (lower profits and increased waste). The likelihood of each outcome is strongly dependent on product shelf life—longer shelf life increases the probability of a win-lose scenario, while shorter shelf life raises the likelihood of a lose-win outcome. Win-win and lose-lose scenarios remain the least probable.