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Blockchain in Agriculture: The Growing Adoption by Agribusiness and Agtech Firms
Abstract: This blog examines how blockchain is being leveraged in agriculture via a broad overview. It includes hyperlinks to outside sources and citations.
While the word blockchain is commonly associated with bitcoin and cryptocurrency, it can also be extended to agriculture. Blockchain, the technology that records information and serves as a digital ledger of transactions duplicated across computer systems, is actively being used to track produce from the fields to the warehouses and shelves. It is playing a much needed and significant role in traceability and transparency.
The Chinese word for “crisis” is a combination of “danger” and “opportunity” as seen with the onslaught of the global pandemic. Since Covid-19 was recognized in the U.S. in March 2020, farmers have increasingly sought innovation to address shortages in manpower. As safety protocols of Covid were implemented (including staggered work schedules, telework, and social distancing) blockchain has taken on a growing role in tracing produce for agribusiness of all sizes. The global blockchain market in the food supply chain market and agriculture is expected to leap from $87 million in 2020 to $189.48 million in 2021, according ReportLinker.
Multinational retail companies have been using blockchain readily. In 2016 retail giant Walmart adopted blockchain — prompted by food safety it initially used blockchain (developed by IBM) to track pork sourced from Mainland China and mangos from Latin America.
To be sure, blockchain is a critical tool in tackling food safety issues notably tracing foodborne illnesses. Diseased lettuce can be traced back to its exact place in the field. In 2018 produce companies Taylor Farms, Fresh Express, and Dole jumped on the blockchain bandwagon prompted by romaine lettuce grown in Salinas Valley, Calif. and Yuma, Arizona, linked with the E. coli bacteria. The crisis cost the leafy green industry millions as sales plummeted across the U.S.
The rise of blockchain
As more agribusinesses adopted blockchain, it has spawned investment and development by tech giants including IBM and Microsoft. Microsoft specifically has made agtech a priority, citing it as a solution to global challenges; studies and data from The World Bank assesses that growers are facing increased pressure to feed a population estimated at 10 billion by 2050. In 2015 Microsoft released FarmBeats, a technology that uses artificial intelligence, IoT (the Internet of Things), and blockchain to collect and analyze data to help farmers grow more efficiently. Amazon Web Services has powered a number of agtech startups that incorporate blockchain. A case in point is Farmmobile that uses IoT to collect live agronomic and machine data from farm equipment. Blockchain tracks each transaction from the account set up to the delivery of each digital asset.
There are a growing number of agtech startups specifically focused on blockchain. AgriChain has developed farming and logistics management software to connect farmers, retailers, and consumers. A number of them are being led by women.
Genevieve Leveille is the founder and CEO of AgriLedger, a new company that will use blockchain to manage the supply chain in agriculture. Emma Weston is the Co-Founder and CEO of AgriDigital that tracks grain supply chains.
The use of blockchain in food and farming is being used internationally as well.
GrainChain is a software company with offices in the U.S, Mexico and Honduras that offers a blockchain software platform to track the distribution of the popular commodity crops such as soybeans and corn. It made its initial launch with the Tamaulipas government in Mexico.
The technology holds the tremendous potential to solve challenges in agriculture in emerging markets. In sub-Saharan Africa, blockchain can play a part in helping small farmers such as tracking yield to creating a much needed digital profile of the farmers. In this area of the continent there are some 33 million small farmers who contribute to a whopping 70% of the food production. About half of the population in sub-Saharan African own mobile phones.
Blockchain technology in the food supply chain and agriculture is only expected to continue growing as a result of the changes from the pandemic. Consumer spending on food and groceries rises while food service businesses have overall declined as social distancing and other pandemic guidelines continue.
The beauty of blockchain is that it provides documentation from the very start.
“Activities in the physical world are well defined, like farming. To this point, digital food supply chain documentation has not included that primary origin stage,” Saptarshi Choudhury, Director of Emerging Technology at Farm to Plate, an agtech startup focused on blockchain was quoted as saying. “Farm to Plate converts those elements into trackable digital data, creating traceability going all the way back to the farmer. Ours is a grassroots level approach that is missing in other solutions.” Food recalls are a significant cause of supply chain disruption, which impacts brand trust and the bottom line.
On the flip side blockchain has extended the ability for consumers to connect with their local farmers. A string of new mobile apps enabled by blockchain lets consumers tip their local farmer. Blockchain produces a digital record of every transaction from farmer to middlemen, to the distribution point of, for example, a retail store, and consumers can use a QR code on a product to trace its origin.
Finally, traceability and transparency not only help the agriculture sector with efficiency, but also educating consumers on where their food comes from. Blockchain will play an increasingly pivotal role in the food systems and provide a win-win to everyone within the broader ecosystem.
Citations and Resources
https://www.frontiersin.org/articles/10.3389/fbloc.2020.00007/full
https://produceprocessing.net/article/united-fresh-2019-blockchain-traceability-facility-design/
https://www.latimes.com/business/la-fi-walmart-lettuce-20180925-story.html
Global Blockchain Business Council – https://gbbcouncil.org/
Blockchain Chamber of Commerce – https://www.blockchainchamber.org/
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