There is a lot of talk about the adoption of blockchain products in various industries, and the agricultural sector and agricultural markets are no exception here.
There are dozens of blockchain-based startups and initiatives aimed at advancing agriculture. Among the most recent developments in the field is Singapore’s announcement to invest $9 million to boost utilization of blockchain in several sectors of the city’s economy.
In one particular planned partnership, the Singapore Blockchain Innovation Program will collaborate with agro-based startup DiMuto, where both parties are going to develop a blockchain-based farm produce traceability project.
Blockchain is set to help the agriculture industry in numerous ways such as improving supply chain management, product authentication, inventory management, energy consumption, sustainability initiatives, and more. But the question is whether any of these ideas have been implemented in practice, and how agriculture-focused blockchain products are actually doing today.
Digitizing data to prove sustainability
To answer these questions, BeInCrypto reached out to Paul Ryan, the executive director and co-founder of Aglive, a startup that deploys blockchain and Internet of Things (IoT) data to track products from processing to plate by digitizing the food supply chain. This Australian company has a live product and already works with farmers.
According to Ryan, the market for agrotech is here and it can allow for the “ability to completely track and provide evidence for all data points along the supply chain visible to all, that has provided an opportunity for consumers to get exactly what they purchased.” Ryan continued:
“Food fraud is a huge problem, costing up to $40 billion per year. Blockchain allows us to ensure our produce and products are legitimate, and safe. Families deserve to know that everything they purchase is exactly what it says it is.”
The agricultural industry could benefit greatly from continued introduction of blockchain technology. However, one of the main challenges here is that agriculture is an industry that often falls behind in terms of technological innovation, Ryan said. Many farmers still continue using paper record-keeping which makes it difficult and laborious to manage on-farm data.
Apart from tracking products from farm to plate, allowing for greater analysis, information sharing, and procedural improvements, blockchain can be used to provide financial stability and subsidizing to those in the agriculture field.
Ryan said that there are farmers who want to double the value of their income, but they have no hope unless they can get capital into the farming community to drought proof their cattle, improve their methods and parts. To get money in, we need to have banks who are confident in the on-farm practices. He further stipulated:
“Traceability enables securitized lending. If the farmers have consistent cash flow thanks to blockchain-based lending, farmers can just focus on what they do best. This is a massive opportunity to link the dots and build insurer and financier confidence. The data comes first — once you’ve obtained this and it’s accessible via the blockchain, you can turn the farming practice into a value-added service because the information is all there and verified. Blockchain will boost investor confidence.”
The technology now makes it possible to capture certified and validated data, prove products are not fraudulent. Moreover, blockchain can be used to incentivize sustainable practices in the agriculture sector. Ryan explained:
“For example, we’re using a simple QR system where you can scan and verify a product. So, if it claims it’s an organic or sustainable product, that can be verified. You also have the power to measure sustainability on a farm. The criteria and rules to improve farm sustainability, including animal welfare and on-farm safety, can be set down. The blockchain will verify compliance. Digitization of data and connecting information will prove sustainability.”
Redefining the agrotech space
There are many other platforms offering similar options to the agriculture sector such as AgriDigital, AgriLedger, TE-Food, among others. Although such companies may not be getting the same level of attention as blockchain-based products in other industries, they are quietly working to redefine the traditional pattern of agriculture.
Last December, the World Economic Forum Global Future Council on Cryptocurrencies released a report containing an overview of the cryptocurrency landscape. The co-chairs of the Council were clear that they wanted to explore how digital currencies can help humanity as broadly as possible.
The majority of the report is a series of descriptions of major crypto-related projects, including non-financial applications. Thus, the report also lists Etherisc, a decentralized insurance protocol that partnered with Aon and Oxfam to roll out a blockchain-based platform that provides agriculture insurance for smallholder farmers in Sri Lanka.
Unlike many blockchain projects where success is measured by the market capitalization of the platform’s native cryptocurrency, blockchain agrotech projects are deemed successful in a more traditional way based on the number of customers and usage.
Since blockchain is seen as such a revolutionary and potentially game changing technology, some companies have tried to raise money or increase their valuation by incorporating blockchain or digital currency into their business models. However, there are also projects that have been working on the idea inception and crowdfunding for years but still haven’t launched their product.
There are clearly many viable and earnest companies looking to solve real global agricultural issues by utilizing blockchain, and there are also an array of platforms that have either gone defunct or are trying to ride the coattails of blockchain technology. With the value chain of agriculture being such a prime spot for innovation, we’ll likely continue to see projects grow, although probably much quieter than their finance industry-focused counterparts.