Blockchain or Blocked Chain?
Featured in the December issue of our magazine.
By Joli A. Hohenstein
Is blockchain a boon or a buzzword? That’s the question ag pundits have been asking as this so-called distributed ledger technology comes to fruition and beyond forward thinking.
First on the scene as the driver behind cryptocurrencies like bitcoin, blockchain professes to provide opportunities for increased transformation and transparency. Experts say its immutability and digital identity offer solutions for supply chain tracing and trackability.
“We’ve seen a lot of movement on blockchain adoption in the ag space recently,” says Mark Pryor, The Seam’s CEO, industry blockchain advocate and founding architect of the company’s online trading and commodity management platforms.
Blockchain’s potential in agriculture also has lately proven out in intense new activity. ADM, Bunge, Cargill and Louis Dreyfus Company announced plans in October to modernize international commodity trading by utilizing blockchain and other technologies.
“Our belief is previous modernization efforts weren’t successful because they weren’t inclusive enough,” the companies shared in joint comments provided to Illinois Field & Bean. “The end goal would be for the seamless exchange of information across the industry that reduces costs, paperwork and inefficiencies and increases visibility and competitiveness for all participants.”
On the food safety side, Walmart in late September put out a mandate directing leafy greens suppliers to use a blockchain-based
system called Food Trust, designed with IBM’s help. Suppliers must have the “one-step back traceability” in place by Jan. 31, 2019, which follows an outbreak of E. coli in romaine lettuce. The super-retailer wants easy tracking back to the farm.
After piloting the new blockchain system for 18 months, the company says it can now track a food item from a Walmart store to the farm in seconds. Nine other companies, including Kroger, Tyson Foods and Unilever, have also been testing the system.
“When you get companies like that mandating blockchain because of increased traceability and transparency needs, it brings it to the forefront for food safety and data authenticity in agriculture,” Pryor says.
Collaborations like these are key to successful leverage of blockchain and similar technologies. “In the food supply chain, there are many players with incompatible systems and no real data standards to speak of,” he says. “It’s not efficient when you need to communicate with others and competitors. Companies need to work together to reduce duplication and inconsistencies to drive interoperability.”
The barriers to adopting blockchain are few and easily addressed, says Pryor, who spent 11 years developing The Seam’s cloud-based technology. “People get uncomfortable with transparency, but it’s important to remember that this is truly elective transparency that puts control into the hands of the data owner,” he says.
These barriers are easily overcome by getting players, including producers, familiar with the science. The move becomes more about knowledge and less about technology maturity.
Still, even with broad-based systems like the one IBM developed, adoption is neither simple nor quick. Interfaces must connect a mass of different software systems, from trucking and processing to shipping. Data must be integrated from processing plants, logistics companies and farms. And retailer and food company business management software must be involved, a mix of digital and paper files and data. Blockchain is tasked with creating the shared digital ledger.
This may be fine for conglomerates ripe with resources, but what of producers?
More than output and expenditure, it’s about faith, says Pryor, who likens it to the Internet. You don’t need to know how it works to take advantage of it.
“Blockchain technology provides a shared source of truth with tamper-proof data that’s protected from outside influences,” he says, adding farmers will likely see little difference in their current processes for supplying data — it’s the technology behind and embedded within new and existing platforms that provides security, traceability and transparency. ■