Blockchain technology is the designated theoretical savior of the daily operations of many industries but holds a special set of promises for agriculture. Currently, the main commercial developments in the blockchain space are focused on large-scale financial services and developing new forms of money and ways to transfer value.
This can be truly revolutionary in the long-term since globally all sectors need to move away from cumbersome bureaucracy, which leaves the door open for inefficiencies and corruption throughout the value chain.
Waiting in the wings with some of the most to gain is agriculture. This is due to the nature of today’s large supply chains and transportation networks that have a lot of room for error. A quick review of the current online “literature” shows the outlook for blockchain in agriculture is optimistic with visionaries re-imagining and actively building new solutions. The main benefits repeated across these articles that focus on using blockchain in agricultural supply chains include:
- Transparency in the value chain
- Data management (more data and higher quality)
- Efficiency of operations
- Eliminating middlemen
- Better financial management/crediting for farmers
- Stabilizing pricing of goods
- Tracking movement of goods
- Replacing all paperwork
- Increasing insurability of businesses
- Preparing against risk factors throughout the seasons
Research is well underway, and small companies are forming around tools to achieve these goals. Naturally, the first into the trenches are those with extensive commercial interests in developing such tools to improve efficiency. This would be industrial agriculture. However, developments bode well on the smaller scale as well. The truth is, the whole sector needs to innovate to stay competitive and meet the challenges of increasing future demand and climate stressors.
Going Local: The implications of global trends on local applications
While small business farmers may not have long value chains, and therefore not the largest commercial incentives, they still have a lot to gain from these advancements. This is mainly due to their vulnerability to fluctuations in the market during the growing seasons. Many potential improvements mostly have to do with financial management and altering the insurance claims process for small farmers. Doing so can be revolutionary in parts of the world where financial fluctuations have drastic and deadly consequences for small business owners, in South Asia, India & Africa.
Start-up companies are already working on solutions and tools to try help small-scale farmers worldwide. Some notable examples include tracking the supply chain in Australia via Agriditial and giving smallholder farmers access to first finance through the innovative Agri-wallet. Ripe.io focuses on creating digital food bundles to map the food journey with accuracy, including supply chain tracking, securing data aggregation, and brand quality.
Companies like Agrichain focus on the producer’s ease of business operations. Focusing on the other side, Provenance targets the consumer and retailer in choosing better options, while strengthening the certification movement. Dabbling in the next combination, incorporating AI and machine vision to tracking with blockchain, is the ambitious Bext360.
Another useful application can be the creation of “barter blocks” or, creating a platform for just one product sold by a critical mass of small farmers, such as coffee. This can offset losses from constant currency switching throughout the value chain from developing to developed countries. This contributes towards trying to achieve a true value price for each product and reducing losses to the producer. Directly taking on the issue of middlemen in developing countries are projects like Binkabi, supported and promoted by Rabobank.
From this concept, other platforms can develop which help solidify local versions of the “circular economy” through trading resources and labor, and creating a market for waste where there wasn’t one before. One project developing in this realm is Agrilliance, emphasizing the sustainability of local production. These decentralized “ecosystems” should develop around a user’s need in a community focused context.
The tools aren’t there to replace current business relationships but to augment and enhance their development while making new connections easier. Addressing this from a systems-wide approach, versus focusing on just one resource, can serve to grow a resilient system which can adapt to any need within a community. This is to empower smaller producers in a peer-to-peer environment understand and trade based on the potential value of their resources without the constraints they currently face.
Some challenges facing these projects is the fact that it is somewhat simpler to design a technology-centric short-term product, versus thinking about a long-term impact ecosystem. Most of the current projects in development focus their attention on precision agriculture, while what we also need is attention towards empowerment of farmers and sustainable systems.
Finally, like all blockchain emergent companies, teams have to weigh in on their own capacity to survive economically to provide the future-proof assistance to communities. This relies on a solid business case being presented with the products.
It’s clear that blockchain holds many applications in agriculture, both large and small. Focusing on local communities, there is a need for educated and enthusiastic end users. For blockchain solutions to take hold, a basic level of technology uptake in the sector must occur. This, followed by education and demonstration of added value, should begin to spread the word. Tools which present added value and simplify a small farmer’s daily operations through saving time and money will be the most successful in empowering these communities.
Will blockchain technology solve all the problems for local producers? Not entirely, but it can lay the foundation for farmers to exert more control over their resources, prices, claims, taxes, and all of the above. In a world where middlemen often take advantage of the pricing of other people’s assets, this can make a world of difference to the people who are trying to provide food for the world. In a peer-to-peer system, everyone knows the true value of the goods and services they are exchanging, and therefore they have the opportunity to build strength in the small resource-based economy.
As the global economy faces more challenges from insecure market shifts and disruptive climate changes, the race to achieve this should be on everyone’s mind when they sit down to eat breakfast in the morning. Securing our producers and first providers secure the entire foundation of our communities, economies, and homes.
Moving forward will require several simultaneous processes to meet in the middle to be successful. On the product development side, smart products will have to be in tune with the business needs on the ground, as well as work well to build trust within communities. This will require some of the most talented and motivated developers to put their efforts toward a more socially conscious output.
Luckily the trend in this sector indicates that many people with the skills to develop blockchain tools are also attracted to projects with direct impact. Secondly, widespread communication, education, and trust building must happen within communities through targeted and sustained outreach. That means that those without purely technical skills must also get involved. This is not only to develop better products, but it’s also to start to prepare an environment which is ready for this transition. That will require working together and sharing knowledge, already intuitive to many communities, but with the mindset to accept technology for enhancing their daily lives.
Simone Ballard currently focuses on bridging the gap between cutting-edge research, technology and local transparent applications for people. She has helped projects worldwide, from New Orleans to New Zealand, Costa Rica, and most recently Amsterdam.