Blockchain in Agriculture: Building Block or Stumbling Block?

by Brynna Sentel
5 minute read
Blue plants growing in digital blue lines

A single ledger of facts, accessible anywhere and bearing facts on intangible or tangible assets and transactions of any kind, unalterable, highly secure and fully transparent. This is the stuff of major motion pictures, or some would say, conspiracy theories. But the reality of blockchain in agriculture is proving to be even more impactful and important than any prediction could have laid out.

Not to be mistaken for bitcoin – which is just one type of cryptocurrency – blockchain is a network of blocks of data that makes information and currency and other data available worldwide.

Blockchain’s Impact on Food Safety & Traceability

Food safety and traceability have seen some of the first implementations of blockchain in agriculture. In 2018, Walmart began requiring lettuce farmers to adopt a food traceability system using IBM Food Trust, which is built on the Linux Foundation’s Hyperledger Fabric platform. Prior to that, they beta-tested on mangoes. The company was able to reduce the time to trace a food product from seven days to 2.2 seconds.

In another, less-talked-about pilot program, Walmart leveraged the same IBM technology to track pork in China – the country with not only the biggest population in the world but also the most pork production and consumption.

Up to the point the retailer’s beta test began, the industry had been riddled with food safety issues, as well as claims of product being falsely labeled as organic. With blockchain, a new protocol provided for uploading certificates of authenticity, removing doubts of origin.

The retailer’s next efforts targeted 23 product lines with VeChain blockchain technology, and looped in select Sam’s Club locations for shrimp tracking. The platform now includes more than 100 items. Earlier this year, the company filed trademarks covering blockchain, non-fungible tokens (NFTs) and cryptocurrencies, signaling not only its commitment to the technology, but also its long-term viability.

Blockchain Streamlines Beer Supply Chain

Success in the food space has propelled other major players to explore similar technology. AB InBev, producer of popular beer brands Budweiser, Stella Artois, Corona, Beck’s and Leffe, and one of the world’s largest buyers of barley, is piloting blockchain with 40% of its European farmer suppliers.

“For the first time in our European operations, this project will create a fully transparent, indirect supply network all the way to the end consumer,” Pieter Bruyland, CIO for Europe at AB InBev, said in a statement. “By connecting players across the beer supply chain – from farmers, malting cooperatives, breweries, warehouses and carriers – to one secure, decentralized platform we can increase traceability and gather data that will help us to continue to grow the finest ingredients for our beers sustainably.”

The company has said the project will allow beer drinkers to see where the barley in their favorite drink comes from. A QR code on the pack will take consumers to a view of the farm where the barley in their beer was grown, reaped and malted.

Other Examples of Blockchain in Agriculture

The potential use of blockchain in agriculture is not limited to food traceability, experts say. Smart contracts for agriculture insurance could improve and speed the claims process and reduce the risk for false claims.

On the agricultural finance side, blockchain could provide more transparency for financial agreements, credit history and transactions for investments and machinery/input purchases.

“I think there are a lot of application opportunities for blockchain in agriculture,” says Robert Brunner, Associate Dean for Innovation & Chief Disruption Officer for Gies College of Business at the University of Illinois at Urbana-Champaign. “For example, supply chain, both to the farmer and from the farmer, which allows greater transparency in how food is sourced or produced, as well as the controlling the quality of inputs such as seeds, fertilizer, etc.”

On the global scene, AgUnity has been providing smartphones to remote farmers to help add transparency to the global supply chain. Each phone is pre-loaded with a safe transaction record system powered by blockchain. The effort, organizers say, addresses financial and digital exclusion for remote, rural communities. Their goal is to be in 30 countries by 2026.

Blockchain Barriers

Still, even with all of these successes, experts caution that blockchain isn’t the proverbial silver bullet. One of the main obstacles, pointed out in an analysis by the Institute of Communication and Computer Systems in Athens, Greece, is the fact that the food supply chain is distributed to large geographical areas, even in different continents. Data management, ownership and retention should also be addressed early.

Part of this is the technology’s relative newness to agriculture. “Blockchains can be considered as a mature approach regarding financial technology (FinTech) and cryptocurrencies,” the study reports, “but as far as the supply chain is concerned, it is still in a nascent stage.”

Brunner adds, “A big challenge we face in predicting the future with this technology, however, is that most of the work with blockchain is being done by startups and not academic labs. Thus, we often are playing catch-up, and why conversations in this area are more nuanced than we might like.”

What Is Next for Soybean Farmers?

Agriculture’s inherent nature contributes to that complexity, with its extended global supply chain and many overlapping connections. In fact, global agri-giant Bayer is already navigating that complex path, using blockchain to follow soybeans and corn. The company collaborated with BlockApps to develop TraceHarvest, which can track high-value crops throughout their lifecycle, from seed sale to planting to harvest.

With each positive execution, blockchain moves a little bit closer to the Illinois soybean field.

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