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Blockchain essentials

At last, here’s a clear explanation of what the blockchain fuss is all about, and why it may be such a winner for agriculture

One Dutch pork producer is preparing to implement a blockchain initiative to make its production chain more transparent.

Traceability, food safety and fighting food fraud are issues of significant importance to food producers around the world.

In fact, with supply chains getting more complex and ever-more global, and with consumers becoming increasingly both more curious and more wary about how and from where food gets to their plate, these issues may never have been more important.

Those are certainly some of the reasons why agriculture and agri-food — from the farm straight through to retail — is starting to give blockchain technology some attention.

Evolving from the digital currency world (think bitcoin), a blockchain is an incorruptible digital ledger of all transactions involved in a supply chain. Information is passed digitally as an attachment to the chain between the various links in the supply chain, instead of through the mostly manual paper trail that is currently in place.

A permanent link between the blocks in the chain eliminates the possibility of data tampering, and each shared piece of information is time-stamped, providing transparency, legitimacy and security. This also makes it possible to accurately trace a product’s entire history throughout the chain in mere seconds.

The blockchain market in ag is expected to grow from US$60.8 million in 2018 to approximately $430 million by 2023, according to market research by ReportLinker.

IBM first started its Food Trust initiative with Walmart and a university in China, and the trust now counts other big names in food among its members, such as Dole, Nestlé, Tyson and Unilever. For IBM, the benefits of blockchain include:

  • Food safety — rapid and secure product tracing can reduce the spread of food-borne illness, product contamination and recalls.
  • Food freshness — exact knowledge of when a product was harvested and how it was stored and handled can increase shelf life, improve freshness and reduce waste.
  • Sustainability — identifying inefficiencies can reduce costs and assurances of quality and authenticity can certify provenance across the food chain.

That’s certainly part of what made Walmart join the blockchain train. Before trialing the technology, the retail giant completed a trace-back test on mangoes and realized it took more than six days to completely trace the fruit back to its farm of origin. By using blockchain, that information can be retrieved in mere seconds, which is invaluable in a food-related health crisis and can even prevent contaminated food from reaching consumers.

This past September, Walmart announced that its suppliers of leafy greens like lettuce and spinach will need to have a farm-to-store tracking system based on blockchain in place by September 2019.

The Netherlands’ largest grocery chain, Albert Heijn, is using blockchain to make its store brand orange juice more transparent; shoppers can scan a QR code on the carton to trace their juice from the Netherlands right back to its production in Brazil.

Dutch pork producer Frievar is launching a blockchain initiative to make the company’s production chain more transparent. A “pig passport” will allow for compliance control and trace-back on the farm side in case of a recall, and an accompanying “meat passport” will do the same thing for processors who want to know where the meat went after leaving their facilities, according Frievar founder John Lorist.

Blockchains can also enable feedback to feed manufacturers, producers, and processors about how pigs are performing, and help with production planning, all of which could have financial benefit at the farm level.

John Lorist. photo: Lilian Schaer

“We think we can lower our financial costs by 40 per cent, but we need to test this yet,” Lorist said. “We really see blockchain as the heart of our organization.”

Cargill last year trialed a small farm-to-table blockchain for Thanksgiving turkeys in Texas that was so successful it was later expanded into 30 states, covering 200,000 turkeys that the company sells under its Honeysuckle White brand from 70 farms.

In its digital ledger, Cargill collects data at key points, like when and where a bird was placed in a barn, what diet it was fed, and where and when it went to slaughter. Consumers can then scan a QR code on the package to learn more about exactly where their bird came from and the farmer who raised it.

Meanwhile in Ontario, startup Transport Genie is using blockchain and a system of real-time sensors to monitor microclimate conditions inside livestock trailers, gathering information that can be used to ensure farmers, food companies and consumers that the animals are being treated humanely during transport.

And a Prince Edward County-based company is building a grain trading system based on blockchain that will create a permanent record of all its transactions. Grain Discovery will let growers and buyers post offers and bids online in a single platform; the system will also track information about how and where the crop was produced, which could open up specialty market opportunities for growers.

As with any new area of technology, there will be winners and losers — remember the Beta versus VHS battle in the 1980s?

What will be interesting is seeing how the blockchain realm evolves, and whether it will truly offer the sector the touted benefits, or whether it could potentially even lead to a whole new area the agricultural sector isn’t yet even considering.

Stay tuned.

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