Uses blockchain technology to increase transparency in agriculture

VP of Technology at TELUS Agriculture and consumer goodsa global digital solutions company that drives the best producer-to-consumer outcomes.

Food and agriculture – which consists of a complex ecosystem of interwoven dependencies – is a sector ripe for adopting blockchain technology. If food and agriculture are to fulfill their obligations and opportunities, an increased degree of transparency and sharing is essential. Blockchain is an important tool to secure this ecosystem and ensure that everyone benefits.

A blockchain is a ledger of records (also known as blocks) stored over a network of many computers. The ledger is secured with cryptography to ensure that each block cannot be altered once written. The blockchain can be used to manage many types of data such as online transactions or documentation such as shipping manifests or veterinary records. Given the countless commodities and valuable transactions that are part of daily food and agricultural production, blockchain is an ideal element for the sector.

Across the agricultural value chain, it is important to establish trust; there is a general concern about data sharing in the industry. Using a blockchain-based solution provides greater transparency around the data and, more importantly, protects the use of that data upstream and downstream.

Tracks and tracks

Currently, large parts of food and agricultural processes are not shared. This opacity inhibits the grower, the producer, the retailer, and ultimately the consumer, since no one can clearly see the actions and values ​​contributed by the other. Blockchain has the ability to help improve trust and facilitate the sharing of this information for greater clarity.

The visibility generated by solutions using a blockchain can improve understanding, tracking and collaboration between all areas of the sector, which in turn can enable actors to meet economic, environmental, health and commercial demands, which are all increasing. With greater clarity, the industry can finally see the actual costs of production, and the food value will be more in line with real costs of effort and work.

A good example of visibility supported by blockchain is the De Beers Tracr platform. This platform allows De Beers to provide assurance on the origin of natural diamonds.

The business consulting organization McKinsey states that agriculture can realize 500 billion dollars in added value by 2030 through increased use of connectivity and technology. There has been digitization in farming, with transformational farmers using weather, soil type, crop and livestock data alongside close relationships with input suppliers. But as the McKinsey research shows, the full potential of data in agriculture is far from realised; this has resulted in data silos across the sector.

Data silos fail to deliver insights that matter to everyone in the food production process, as there is no ability to analyze, collaborate and solve problems together. Much of the problem is due to poor data transparency. This can lead to mistrust, meaning farming and food production accept inherent risks in continuing with data methods that promote data silos.

However, the transparent nature of the blockchain provides the food and agriculture sector with a platform for shared business benefits. An ability to detect and respond to supply chain vulnerabilities can protect growers, input suppliers, manufacturers, retailers and consumers. This can enable greater optimization and increased accuracy, both of which are essential as food and agriculture deal with unpredictable yields due to climate change, new food provenance regulations and changing customer expectations.

A growing need for transparency

Before the Covid-19 pandemic, China was affected by the “zombie meat scandal” where authorities seized 100,000 tons of out-of-date meat. In 2016, the European Union (EU) reported more than 700 alerts for food-related risks. Covid-19 has increased the awareness of consumers and the requirements for retailers and manufacturers for high visibility throughout the food chain. With each transaction or input placed on a blockchain ledger, the risk of counterfeit food labeling can be reduced.

Blockchain can only deliver increased optimization and transparency in food and agriculture if the sector embraces data sharing. As academics Simone van der Burg, Leanne Wiseman and Jovana Krkeljas write in SpringerLink, this future “can only become a reality if farmers are willing to share their data with agribusinesses that develop digital technologies.” The authors go on to mention that the EU’s ethical guidelines for the sharing of agricultural data after contractual agreement encourage transparency about data use to increase trust in data sharing.

Guidelines, such as the EU Code, are a positive development to ensure that farmers trust digital technologies; the use of blockchain can help them understand the value of their data. The World Economic Forum (WEF) believes blockchain will be critical to the sector if it is to “meet consumer demand for transparency and support government objectives to protect citizens from fraud.” The WEF adds: “This can be done by validating the source of the entered information and increasing automation to reduce the risk of human error and prevent data from being deleted.”

Blockchain in food and agriculture is not science fiction; the technology is already in use and makes a difference in the industry. Major food and retail companies such as Dole, Unilever and Walmart has formed a partnership to work with leading technology providers to develop and deploy a blockchain.

Meanwhile, Dutch brewer Heineken has implemented the EverGreen strategy to drive not only business growth, but also to improve sustainability across the organization. The only way Heineken could achieve this was to improve the connectivity between its suppliers and partners; a development like this is just one step away from the adoption of a blockchain.

Although food and agriculture is a complex ecosystem, blockchain provides a transparent ledger to provide clarity and is critical to the future of this industry. The key to the success of blockchain is to bring the participants in industry value chains together to collaborate and have a platform to facilitate this.

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