Blockchain in Western Canadian Agriculture
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