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In 2017, Frank Yiannas, Walmart's Food Security VP, bought a packet of mangoes from one of their stores, brought it back to the headquarters and told his team to find out where it came from. It took more than six days. Although he had been skeptical before, Yiannas worked with IBM to test a blockchain solution. The execution of the same test with the new technology has reduced the tracking time to less than two seconds, with each stop in the path of the mangoes immediately visible.
If ever, however, Walmart came late to the game. Conglomerates and idea-based startups have been exploring the applications of agricultural blockchain for years. Supply chains have been understandably one of the hottest areas for the development of blockchain, given that the current system (as impressive as it is) is plagued by a number of problems, from antiquated record keeping to ethical concerns.
<img class = "alignnone wp-image-12235 aligncenter" src = "https://blockonomi-9fcd.kxcdn.com/wp-content/uploads/2018/08/blockchain-agriculture.jpg" alt = " Blockchain Agriculture [19659004] Problems: where does this food come from and where does it go?
Some questions have no answers Other problems do have answers, but they are buried in a file somewhere. Agriculture falls into this second category: farms, processors, loaders, distributors and retailers generate a lot of data, but it covers a multitude of silos, making difficult answers of any kind. supply chain means that often buyers and sellers are not optimally organized and lead to significant inefficiency, for example in the form of food waste According to a UN survey of 2011:
- Approximately 1/3 of all the food produced in the world is wasted rich countries waste takes place on the side of consumers, most of which takes place in the production and distribution stages.
- Food wasted in Sub-Saharan Africa alone would be enough to feed 300 million people.
- The total value of the lost food is almost 1 trillion dollars.
Other issues that continually occur in the agri-food supply chain include:
- Food frauds (non-organic food is easy enough to pass as organic)
- Food safety (E. coli in lettuce, as happened in May 2018)
- Unethical production practices (forced labor)
- Lack of transparency (in terms of costs, production practices, etc.)
- Inefficiency of distribution (food is not wasted because people do not he wants it, it is wasted because people can not get it)
Agricultural problems, blockchain solutions
Old-fashioned record
It is 21 st century, but a worrying amount of business is still conducted on paper and the global supply chain is no exception. Dealing with international import and export laws, banks, third-party auditors and a host of other actors means spilling a lot of ink to send faxes to three different offices for each transaction. This fragmentation and lack of standardization slows and makes data harder to collect and analyze, which means that virtually all supply chain problems are more difficult to solve.
There have already been moves to upgrade these systems, such as the GS1 Standard, but so far no solution has been able to offer what the supply chain really needs: a shared registration and transaction system that can be considered reliable from all the parties involved. This is where projects such as Agriledger, Provenance, OriginTrail, Ripe.io and Blockgrain from Agunity come into play. Each project has a different focus, but the general idea is that they can provide exactly the above: a standardized and safe way to keep track of an extremely complex system without requiring full and simultaneous compliance by all the players involved. Ultimately, they hope to create a secure, easily controllable system that can reduce unnecessary documents and make verification processes and transactions more efficient. When it comes to doing so, it is a good record keeping;
Read: Blockchain and Supply Chain Management
As far as companies are concerned, shipping and supply chain giants such as Dreyfus and Maersk have already started experimenting with transactions and recording -covering on the blockchain , which could end up being interoperable and integrated with other systems in the future.
Traceability / Transparency
Fair trade, organic, "cruelty-free", "ethically-sourced" – how accurate are these labels? Not as good as you want: there are so many steps in most supply chains that it is relatively easy to separate the source from the product. At a minimum, it would be nice to have peace of mind on food ethics, but in more serious situations, such as epidemics, it could save lives to learn about sources in seconds rather than days.
The need for transparency is particularly emphasized by projects such as Provenance, which is basing most of its business model on increasing demand for organic and ethnic food. They have successfully managed an impressive number of pilot programs, with one of their most successful projects in tracing fish from Indonesia. The process was simplified to the point that fishermen could record their catches on the blockchain via SMS, with each batch being monitored through processing and distribution, to the store. With all the steps involved, one of the obvious problems here is how many sensors would be needed and how exactly the food would be traced, but at least the authorized blockchains make it possible to use rapid consensus systems, such as Raft.
Even Coca-Cola is exploring the possibility of using blockchains to stimulate ethical work practices in their sugar supply chains. Not only will they register workers and contracts, but they will plan to build incentives to ensure that local employers want to meet the standards.
Transaction costs and market access
They really have mechanisms to include small-scale farmers and, in turn, small farmers do not really have the means to access larger markets. This is one of the reasons why Sub-Saharan Africa is wasting so much food: they can not simply send it where it will be most useful. Even in the most developed countries, many agreements on agriculture are made on the basis of personal trust, handshake agreements and intermediaries, which means that there is a bigger gap than necessary between the market price and the price that farmers receive. Entering larger markets is not very feasible for small farmers, especially in less developed regions, so the cycle continues to repeat itself.
Agriledger is one of the largest and most successful agro-blockchain projects currently in operation, and is particularly interested in market access issues, building trust relationships between farmers and regional co-operatives and better access to financial services. Investing in agricultural equipment and climbing is difficult when you do not have a good way to sell your product, keep records or turn financial capital into physical capital. The Agriledger pilot programs have so far been quite successful: a case in Papua New Guinea has shown revenue as much as tripled after farmers have had access to the blockchain via an app.
The Players
Most of the blockchain sectors have two sides: high-profile energy startups that are trying to get their platform and the company logistics departments that are quietly building blockchain in their current systems. The agrifood blockchain is no exception, so here is a brief overview of the space as it is.
Notable commercial applications
Many of these platforms have a common IBM Hyperledger Fabric: an authorized ledger that is maintained securely by the parties involved. This is not exactly the maximum transparency, but it is much closer to the current system.
- Walmart: They put the mango on the blockchain, and it's probably not the end. He also worked with IBM and Tsinghua University for a Chinese pig tracing project.
- Dreyfus: used a blockchain platform to close a big soy deal with a Chinese supplier, drastically reducing transaction times.
- Coca-Cola: Building
- Unilever: Working with Provenance to trace tea in Malawi
- Carrefour: Working on a blockchain to help trace the origin of the product.
- Dole, Driscoll & # 39; s, Kroger, Tyson, Nestle, Golden State Foods, McCormick and Company and McLane Company: collaboration with IBM to create tracking blockchain solutions.
Remarkable independent projects / platforms
Recognizing that most potential business users would not want to have their supply chain data transmitted to the entire world, many of the independent projects also use some form of blockchain authorized as a core technology. They have already conducted some interesting experiments, but it is still unclear whether they will be able to overcome existing business actors.
- Agunity / Agriledger: focused mainly on providing access to regional and international markets and capital for small farmers (which provides 80% of the food consumed in developing countries). The system mainly uses simple smartphone apps and has implemented pilot cooperation projects in Papua New Guinea, Myanmar, Kenya, Ethiopia, Ghana and other countries, all with positive results, with revenue as much as tripled in some cases.
- Provenance: provenance focuses mainly on the production of more transparent supply chains, based on the growing global demand for ethical and environmentally friendly products. Their pilot project has successfully traced Indonesian fish and have also performed many on a smaller scale, from coconuts to fashion products. Rather than being a one-stop solution, however, they aim to use blockchain as a universal record layer, also accessible via SMS, which can serve as a means to increase interoperability and data sharing across supply chains.
- Blockgrain: This Australian startup is finding innovative ways to eliminate intermediaries, using blockchains as a way to give buyers and sellers a direct channel to one another. A test run in Queensland has already successfully used the system, keeping records on Blockgrain blockchain and regulating transactions with ERC20 "AGRI" tokens.
- me: This is for the locavores. It essentially works as a way to connect farmers and buyers within a radius of 250 miles, making it easier for small farmers to sell food and cheaper for people to buy it. It also works as a way for consumers to track their food in real time and also implements route optimization to reduce shipping costs for farmers who otherwise would not be able to afford to send their products to the market .
- io: Ripe is another supply chain solution, but it is also trying to keep track of what goes into food . Thanks to the use of numerous sensors and real-time monitoring, powered by the blockchain, Ripe focuses on the realization of every detail of a completely transparent and traceable product from one farm to another. Their claim to fame so far is putting tomatoes on the blockchain.
- OriginTrail: an ambitious project that aims to integrate databases across supply chains, using an out-of-network data governance network and a blockchain layer in which zero knowledge evidence is stored.
Outlook
Blockchain technology is not a magic wand, no matter how revolutionary it will leave industries with some problems. Interoperability remains a concern, with so many competing projects coming from multiple angles, and implementation will not be a walk in the park. Many projects depend on sensor arrays and labeling technologies that may not yet be available, and this will not make it easier for farmers and subsequent steps along the supply chain to take off this system.
That said, there are so many companies and platforms working in this sector that it seems inevitable that agriculture will end up using blockchains in one way or another. Even if they can start small, with individual cases and locally, it could end up being exactly what the industry needs, as some parts of the supply chains seem to have jumped on some key parts of the industry. it was the Internet until now. Ultimately, the measure of blockchain's success is how well it can do and, ideally, it will help make the world more efficient, safe from a food standpoint.
