What’s the connection between agriculture and blockchain? At first blush we don’t really think there is a connection, but there is. For those of you who are followers of this blog and the content we place on connectedworld.com, then you know we have taken a deep dive to address both blockchain and agriculture. Perhaps not at the same time, but in doing our research it occurred to me that in the very near future blockchain technology will play its part on the future of food.
As you may recall, this past January, we did some extensive reporting and coverage of blockchain from multiple angles. We discovered that while blockchain is often discussed in combination with cryptocurrency, blockchain technology applies to far more circumstances than digital currencies. In other words, bitcoin and other cryptocurrencies may have made blockchain “famous,” but blockchain is not a one-trick pony. “Things” are happening, as they say, and blockchain will become a bigger part of the discussion in so many industries in the next several years.
First, what’s the definition? A blockchain is a continuously growing list of linked, secured records called blocks that contain transactional data. If you want a blockchain 101 lesson, go back in the archives and listen to segment one on January 16 of The Peggy Smedley Show. A blockchain is decentralized, meaning unlike traditional currency, it doesn’t require a third party to verify a transaction.
So how might blockchain benefit agriculture? Several ways.
Traceability and supply-chain visibility are big ones. Consumers are becoming increasingly interested in where their food comes from and where it has been before reaching them. IoT (Internet of Things) solutions from startups like Ripe Technology are tackling this problem with blockchain technology.
Ripe is working to design a transparent digital food supply chain by harnessing food data to create “the blockchain of food”—a sort of food quality network that provides a map of the journey our food takes from farm or field to fork.
The idea is that, first, farmers leverage sensors to automate processes and efficiently meet market demands for high quality, sustainable agricultural products. Next, distributors can track food products and provide realtime data on food safety and delivery to their customers. Finally, the end users—consumers—receive this data and can feel confident in knowing their food is safe.
Another company worth noting here is called OriginTrail. The name says it all. OriginTrail offers a purpose-built protocol for supply chains based on the blockchain that goes a long way in decentralizing trust in supply chains. The company’s tech is currently in use in the food industry, and OriginTrail is planning an open-source version that can be used to manage product supply chains in others industries as well.
One more example in the realm of traceability and supply chain visibility is AgriLedger.
AgriLedger offers a blockchain-powered solution that can be used throughout the supply chain to provide benefits such as efficiency and traceability to both farmers and suppliers. Just like the blockchain behind cryptocurrencies like bitcoin, AgriLedger’s blockchain provides immutable information, thereby providing transparency and facilitating trust by keeping players throughout the supply chain honest. Blockchain tech will also play an increasingly important role in facilitating agricultural transactions, reducing the complexities and costs typically associated with these transactions.
In fact, this is already happening. In January, the LouisDreyfus Co., and several partners completed the first agricultural commodity trade using a blockchain platform.
The platform was used to execute a soybean shipment transaction from the U.S. to China. As you can imagine, this is a complex sort of transaction with a lot of different players and a broad scope. The LouisDreyfus Co., says the trade included a full set of digitalized documents—from sales contracts to letters of credit and certificates—as well as automatic data-matching.
Now, normally, all of this would have had to be done with paper. The blockchain prototype digitized the process and demonstrated “significant efficiency improvements” for everybody involved. In terms of good ‘ole-fashioned ROI (return on investment), the LouisDreyfus Co., says time spent on processing documents and data was reduced fivefold.
That’s incredible. Also, by replacing manual, paper-based processes, this type of solution could eliminate task duplication and the need for manual checks for human errors. As with other digital solutions that replace paper-based processes, this one also provides the critical ability to monitor progress in realtime.
Also, because of the nature of a distributed ledger, data verification is easier and there is a reduced risk of fraud. So, these are just a couple of the most compelling ways blockchain technology will transform agriculture and impact the future of food. There are others, and if you have any thoughts, be sure to share them on my social media page so we can continue the discussion. Let me sum up by saying there’s good reason for all this talk about blockchain.
The global market for blockchain tech is expected to reach $2.3 billion by 2021, which is up from about $340 million in 2017.
We live in a day and age in which businesses and individuals want data to help them make decisions. It could be as simple as wanting to look at Google maps to check realtime traffic data before we get on the road. In the future, data will inform everything we do. A public distributed ledger of transactions, no matter what they’re used for, is really attractive to the connected consumers that live in today’s connected society.
For agriculture and the food supply chain, this is particularly true. If we buy organic, we want to know that we’re really getting the high-quality food we’re paying for. If there’s a recall on some sort of contaminated produce, we want to know that that information will get to us in a timely fashion.
Blockchain technology in agriculture makes so much sense, and I think we’re just beginning to see how it will transform the space. To learn more about how the IoT is playing a role in the future of food, check out the main feature that’s up on the homepage.
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