The technology that made cryptocurrencies like Bitcoin possible is now gaining ground in agriculture.
Those two things may seem worlds apart, but stakeholders in the ag industry are now looking at blockchain technology to connect buyers and suppliers that are worlds apart.
Blockchain technology, which allows Bitcoin to function, is a system for storing data. Different chunks or “blocks” of data are stored on computers, which are linked to each other, creating a chain of information. The data blocks are locked so that only the owner of the data and anyone they’ve given access to can see them.
In agriculture, many believe blockchain technology has the potential to make commodities trading more efficient, secure, and transparent for everyone involved from producer to consumer.
“I’ve been in the food and agribusiness sector as a practitioner as well as an academic for nearly 30 years and I have never seen a piece of technology that has gone from such obscurity to center stage as I have with blockchain technology,” said Dr. Keith Harris. “It seems to be ready-made for the food industry.”
Harris is an assistant professor of agribusiness management at Kansas State University. He works with the masters of agribusiness program, which hosted a blockchain workshop near the end of 2018. He believes using blockchains could help the food industry meet consumer demands.
“For example in ag, when we’re making claims about our product, claims such as ‘responsibly sourced,’ or ‘organic,’ or ‘GMO-free,’ or ‘process verified,’ all the claims we’re making about our product, those claims are really driven by demand and by the consumer,” Harris said. “And we have consumers saying ‘you’re making these claims, and I want my product to be that way, but what system do we have in place to verify that?”
He said that’s where blockchains come in.
Information is often centralized, meaning it is owned by and available to one company or institution. When using a debit card, a person’s bank must first verify that there is enough money in a person’s account to cover the purchase. That verification is done only by the bank. The data is centralized.
Many of blockchain’s proponents applaud the technology for being a decentralized record-keeping system. In Harris’s vision, he sees blockchains as allowing every point of the supply chain to be able to see and verify data surrounding the food. Data like where it came from, how it was raised, the temperatures at which it was stored and so on.
He also envisions a world where consumers can quickly and easily verify claims about their food choices.
“From a user perspective, it’s kind of like the ‘internet of things,’ where we look at things like cell phones or artificial intelligence — something that can read the information in terms of sensors and then some form of artificial intelligence that can make some sense out of that. Something simple like Siri on your phone or something more robust like Alexa and the Echo system,” Harris said. “At the end, say you’re a consumer, say a chef in the food service industry or customer in a grocery store, scan the barcode with your device and have access to all that information from each point along the supply chain.”
Blockchain at work
Blockchains are currently being used by some to connect buyers and sellers to markets and expedite commodities trade transactions, but some companies are bringing Harris’s vision into reality.
Using blockchain technology, the team at ripe.io is creating a platform to connect all parts of the food supply chain. The California company believes that by creating greater access to data for all involved, they are working to bring real benefits to producers, distributors and consumers.
“The core of our work has focused on leveraging blockchain technology to collectively bring together IOT data, supply chain data and other third-party external data sources into one platform to improve collaboration and efficiencies among all actors and stakeholders along a food supply chain (growers, distributors, regulators, retailers)” said Rachel Gabato, head of products and program management at ripe.io. “And provide consumers with confidence in the sourcing and quality of their food.”
Benefits to buyers, such as food service, restaurants and grocery stores, include verifying that food was sustainably raised, the locality of the food and more. The system allows distributors to monitor the transport of the food in real time, catching abnormalities or problems, which can cut down on costs and food waste.
It benefits the farmers as well, sometimes allowing them to command a higher price for their produce, as they can more easily verify that it is meeting demands of locality, sustainability and the like.
Beefchain has a similar mission. The Wyoming start-up was created by ranchers and has since partnered with ranches in the state to track blockchain-verified beef. Beefchain helps ranchers mitigate financial risk during the transport to the feedlot or packing plant by allowing them to monitor the process. It also is working to help ranchers capture more of the premium earned from raising “grass-fed” beef.
Future of agriculture
While these platforms are seeing benefits, implementation of new technology across the national and international food system is no easy task. Both Harris and Gabato cite participation as one of the main challenges.
“Grain exports have about 17 different operations before it moves from the country grain elevator in Hutchinson, Kansas to Nairobi, Kenya, for example,” Harris said. “That commodity is going to have 17 different movements both domestically and internationally, so coordinating that effort and getting everybody on board, to get everybody moving at the same pace with this technology, can be difficult with such a wide supply chain.”
But even with challenges of participation and getting data digitized, both see blockchain technology playing a major role in the future of agriculture.
“Blockchain engenders a new business model that efficiently integrates everyone on the supply chain from the grower to the consumer,” Gabato said. “The value of information gets stronger as more transactions take place, generating insight into supply chains and helping close market information gaps. The value in a secure transaction creates more confidence in the system and can enable upstream participants to be active players in the products they produce and sell.”