Blockchain has been a popular topic in all industries for
what seems like forever; this past year investors, bankers, computer
programmers, real estate agents and more have not been able to get away from
this term and some form of impact on their daily activities. Farmers aren’t
exempt either. There is a growing buzz about the use of blockchain technology
in farming, agri-business and food. But what is blockchain? What trend is
pushing us towards blockchain use in western Canadian agriculture? What
companies will allow blockchain to be used in western Canadian agriculture? What
does this mean for farmers?
What is Blockchain?
The generic definition is:
"an open,
distributed ledger that can record transactions between two parties efficiently
and in a verifiable and permanent way”, but for a much better explanation
an article from Investopedia does a great job explaining the fundamentals
of blockchain.
Essentially, what blockchain does is decentralizes information
which brings down costs, increases efficiency, accuracy and privacy of
information flow. It does this by eliminating middle men, paperwork, and human
error.
Is blockchain perfect? Far from it. Does it have
limitations? For sure. Is it a tool that is supportive of achieving better
possible outcomes for many industries, including farms, agribusiness and food?
I would say yes.
What key trend is pushing
western Canadian ag towards blockchain?
There are many trends, but the one I want to highlight for
the sake of this overview is traceability. There are other trends such as data
management and more, but the scope of blockchain application can often go down
many bunny trails which I will aim to avoid today.
Traceability – The primary trend driving blockchain
research and use in agriculture that I will focus on today is traceability efficiency; consumer demand for
better understanding of where their food came from is one component that has
been ever growing and continued. People want to know where their food came from
and blockchain is a tool to support that. On top of this, traceability from the
retailer and food processor/supplier side as well to get ahead of the potential
food safety outbreaks. There is an often referenced story from Wal Mart taking
upwards of 7 days to go through the process of identifying where a food source
came from down to 2.2 seconds all because of blockchain implementation; this can
be the difference between one casualty or sickness outbreak and 10 or 20 or
more unnecessary deaths/sicknesses. Wal
Mart has made it mandatory by September 2019 that all their lettuce/spinach
suppliers have implemented blockchain use into their operation through the IBM
blockchain solution..
This use has been an even hotter topic as of late due to the
e coli outbreak in lettuce that has been prevalent the last week or so.
Now, in western Canadian agriculture we aren’t producing
lettuce or spinach – we are primarily producing small grains, which typically
aren’t fraught with human safety consumption issues. However, we are producing
grains that have a strong demand for gluten free, glyphosate free and organic (note:
Regardless of how myself or others feel about them, these are further trends
with in agriculture pushing towards the potential use of blockchain). By this I
am referencing oats most specifically. Companies like General Mills and Grain
Millers have seen the demand for these types of products increase significantly
over the last number of years and with that bring challenges in ensuring the products are verifiable.
This sounds interesting until considering the practical
application of tracking and getting millions upon millions of tiny 0.037gram
seeds onto the blockchain comes into play. Is this even possible?
It is now.
What companies will
make blockchain practical in western Canadian agriculture?
Many companies are working hard at making blockchain tools
that apply to western Canadian agriculture. At a macro level organizations like IBM have platforms and even
the “ABCD’s” of agriculture have announced they are working to streamline
components of their businesses with blockchain (that’s another article one
day!). But specific to the example used
above, is there one out there?
SafeTraces has been
around since 2013, but has really started to take in funding the last couple of
years. They have been invested in by many organizations, one specifically being
Bunge.
SafeTraces manufactures biological tracers, or invisible,
edible, odorless, and tasteless barcodes that can be directly applied to many
foods, including grains. Food processors and other parties handling food in the
supply chain can spray SafeTraces’ seaweed-based DNA tag on individual foods so that their source and qualities can be
traced and verified throughout the supply chain. The markers can be read with
specific barcode readers that have a traceability tool within them. The cost is
around $2USD per tonne for the barcodes to be applied.
This technology can be applied specifically to oats. To my
knowledge, it isn’t being used in western Canadian agriculture today, but it
does have the potential down the line and may be something that is tested in
the coming years – potentially in conjunction with blockchain technology.
What does this mean
for the western Canadian farmer?
First and foremost, it means that you will continue to
hear more about blockchain. In this specific instance, will it cost or make
you money? While it remains to be seen, the reality is that some cases it may
make you more efficient and cut out costs to your operation, whereas in other
instances it may mean the case for an incremental cost to utilize the
blockchain platform or technology that enables blockchain use within your
operation.
Blockchain implementation from a western Canadian perspective is still
not main stream across the prairies, but I believe as farmers and
industry professionals we need to stay on top of how blockchain can and is
being applied so that we can be at the forefront of implementing it to best supports farmers and the industry as a whole.
Note: There are many applications of blockchain, such as smart contracts, data management and more.
Here are a couple links for reference:
https://agfundernews.com/blockchain-is-coming-for-agriculture.html/
https://www.reuters.com/article/us-global-grains-traders/abcd-quartet-of-grain-traders-partner-to-digitize-global-trades-idUSKCN1MZ2E8
https://futureofag.com/5-potential-use-cases-for-blockchain-in-agriculture-c88d4d2207e8
Note: There are many applications of blockchain, such as smart contracts, data management and more.
Here are a couple links for reference:
https://agfundernews.com/blockchain-is-coming-for-agriculture.html/
https://www.reuters.com/article/us-global-grains-traders/abcd-quartet-of-grain-traders-partner-to-digitize-global-trades-idUSKCN1MZ2E8
https://futureofag.com/5-potential-use-cases-for-blockchain-in-agriculture-c88d4d2207e8