Using Blockchain Technology To Increase Transparency In Agriculture

VP Technology at TELUS Agriculture and consumer goodsa global digital solutions company that strives for best results from producer to consumer.

Food and agriculture – comprising a complex ecosystem of intertwined dependencies – is an industry ripe for blockchain technology adoption. If food and agriculture are to meet their obligations and opportunities, more transparency and sharing is essential. Blockchain is an essential tool to secure this ecosystem and ensure that everyone benefits.

A blockchain is a ledger of records (also called blocks) stored in a network of many computers. The ledger is secured with cryptography to ensure that once written each block cannot be changed. 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 myriad of items and valuable transactions that are part of everyday food and agricultural production, blockchain is an ideal element for the industry.

Throughout the agricultural value chain, it is essential to build trust; there is a general concern about data sharing within the industry. Using a blockchain-based solution creates more transparency around the data and more importantly protects the use of that data upstream and downstream.

Track and trace

At present, large amounts of food and agricultural processes are not shared. This opacity inhibits the grower, manufacturer, retailer, and ultimately the consumer, as no one can clearly see the actions and values ​​the other has contributed. 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 across all parts of the industry, in turn enabling players to meet economic, environmental, health and commercial demands, all of which are increasing . With greater clarity, the industry can finally see the true cost of production and the valuation of food will come more in line with the true cost of inputs and labor.

A good example of visibility supported by blockchain is the De Beers Tracr platform. This platform enables De Beers to provide certainty about the origin of natural diamonds.

Business consultancy firm McKinsey says agriculture could create $500 billion in added value by 2030 by making greater use of connectivity and technology. There is digitization within agriculture, with transformational farmers using weather, soil type, crop and livestock data alongside close relationships with input suppliers. But as the McKinsey study shows, the full potential of data in agriculture is far from being realized; this has resulted in data silos across the industry.

Data silos don’t provide insight that impacts everyone in the food production process because there’s no ability to analyze, collaborate, and solve problems together. Much of the problem stems from poor data transparency. This can lead to distrust, meaning that agriculture and food production accept inherent risks by continuing to use data methods that foster data silos.

However, the transparent nature of the blockchain provides the food and agriculture industry with a platform for shared business benefits. The ability to discover and respond to supply chain vulnerabilities can protect growers, input suppliers, makers, retailers and consumers. This can allow for greater optimization and accuracy, both of which are critical as food and agriculture face unpredictable yields due to climate change, new food origin regulations and changing customer expectations.

A growing need for transparency

Before the Covid-19 pandemic, China was hit by the “zombie meat scandal”, with authorities seizing 100,000 tons of aged meat. In 2016, the European Union (EU) reported more than 700 food-related risk warnings. Covid-19 has increased consumer awareness and demand from retailers and producers for high visibility across the food chain. With every transaction or entry placed on a blockchain ledger, the risks of counterfeit food labeling can be reduced.

Blockchain can only bring more optimization and transparency to food and agriculture if the industry 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 developing digital technologies.” The authors continue to mention that the EU code of conduct on agricultural data sharing encourages transparency on data use through a contractual agreement to increase trust in data sharing.

Codes of conduct, like the EU code, are a positive development in ensuring that farmers trust digital technologies; using blockchain can help them understand the value of their data. The World Economic Forum (WEF) believes that blockchain will become essential for the industry to “meet consumer demand for transparency and support governments in protecting citizens from fraud.” WEF adds, “This can be done by validating the source of the information entered and increasing automation to reduce the risk of human error and avoid data deletion.”

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

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

While food and agriculture are a complex ecosystem, blockchain provides a transparent ledger to provide clarity and is vital for the future of this industry. The key to blockchain success is bringing together the participants in industrial value chains to collaborate and having a platform to facilitate that.

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