From enabling transparent supply chains to driving more environmentally-friendly production, blockchain is being hailed as a vital tool that could revolutionise global agriculture.
Blockchain fans say it can build more openness in the way food is grown and sold, while its potential to manage agricultural volatility could be a game changer for the world’s food systems.
If you’ve never heard of the technology – and you’ve even less idea how it might help your business – then strap in while Farming Future Food gives you a glimpse of what farming with blockchain might look like.
What it blockchain?
Blockchain’s background lies in cryptocurrencies like Bitcoin, but the technology isn’t just about digital cash. In its simplest form, it’s a database that allows people to record information and transactions in a way that can’t be altered.
Because every piece – or block – of information is marked with a unique code that locks it into sequence in a chain, it’s seen as an incredibly secure way to record, certify and transfer information and assets without needing to rely on banks, brokers or other middlemen.
On top of this, information contained in a blockchain can be easily shared and made public, meaning for businesses that are based on transactions or face scrutiny – like farming – the possibilities are huge.
So how can it be used in practice?
To date, most of the progress between blockchain and agriculture has been made in food traceability and safety.
In the wake of food scares, supermarket giant Walmart is already insisting some of its growers use blockchain so food’s history can be traced in seconds in the face of an outbreak.
The technology can also help with traceability, allowing shoppers to scan a product and find out exactly where their food was produced.
Does it have benefits for food producers?
For producers the potential of blockchain to help limit risk, ensure fairer, more consistent prices and managing volatility is likely to hold the most interest.
As well as tracking crop growth and production to give real-time indications of product availability, we could see the development of ‘green contracts’, where producers automatically receive a premium for using them sustainably.
Blockchain also has the potential to slim down supply chains by making information about production easier to share and manage, cutting out middlemen and potentially giving a higher share of returns.
- 5 ways blockchain could transform food and farming businesses
- It can provide real-time indications of crop growth, inputs and stock availability
- Encourages sustainable practices through ‘green contracts’
- Opportunities to slim down supply chains
- Potential for smart contracts and affordable insurance
- Opportunities to give producers a higher share of returns
What other benefits could it offer?
Perhaps most exciting from a global volatility perspective is the potential for smart contracts and affordable insurance.
Using blockchain, payouts can be triggered automatically when certain conditions are met – for example when milk prices drop or droughts occur.
Because these contracts are highly automated and don’t require manual assessment, premiums can sold to farmers at much cheaper rates, making crop insurance affordable to more and more people.
When will we start seeing blockchain used more widely in farming?
Blockchain is still in its relatively early days and the potential to use the technology is agriculture is still being discussed by technology and agricultural experts.
One of the biggest stumbling blocks to implementing the technology so far is regulatory uncertainty, as well as the potential failure of different blockchains to work together.
What’s needed is for all parties involved to see the value of sharing data – something that hasn’t historically been a strong point in the food supply chain.
What we can be certain about, however, is that blockchain is here to stay in the agri-food chain — and early adopters have already laid down the markers for their potential use.
As agri-food systems evolve, we’ll undoubtedly see blockchain and other agri-tech drive more global trade, more connected consumers and a greater than ever emphasis on developing sustainable and traceable supply chains.
