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Blockchain Technology Creates New Opportunities For Agriculture

Blockchain technology has been dubbed “the next internet” because of the disruption it will cause in the way the world does business. The technology was created a decade ago as an accounting system for cryptocurrency, but industries such as agriculture are applying it to their supply chains, with adopters seeking, among other things:

Faster delivery, less paperwork. Louis Dreyfus, Co., a leading commodities trader, cooperated with three European banks earlier this year to facilitate a soybean trade with a Chinese soybean processor. The sales contract, letter of credit and certificates were digitized and the transaction time for the sale was cut in half, to one week.

Digitized farm-to-table tracking. A pilot program involving Cargill’s Honeysuckle White turkey brand last fall tracked individual turkeys from four Texas farms to Cargill’s processing lines and ultimately to grocery stores. Consumers used information from a tag to learn where their store-bought turkey was raised, the food it ate, the results of veterinary care, how it was processed, truck temperature and date of arrival at the local grocery store.

Potential Limitations

Technology futurist Scott Kloslosky notes that blockchain is an emerging technology with many unknowns and obstacles.

Kloslosky points out, for example, that each transaction is logged on multiple computers. And because each transaction is immutable and forms the history for future transactions, it is stored indefinitely. This requires enormous storage space. At this point, the technology’s top speed is seven transactions per second. Compare that to the 24,000 transactions per second processed by Visa. “There are issues with how it works,” Kloslosky says. “Ledgers are getting too big and too slow.”

Emerging Applications

Despite these current limitations, agricultural firms are anticipating ways blockchain technology might apply to their future needs.

Protein products at Golden State Foods. Dr. Wayne Morgan, corporate vice president and president, protein products at Golden State Foods, uses a food metaphor to describe where the technology is today: “Blockchain management is not yet fully baked; there is no hard success story. But there is a lot of bubbling.”

Morgan, whose company supplies protein products to quickserve restaurants, predicts that in a matter of years, not decades, the technology will be a normal part of doing business. His and other companies offer a glimpse of what the future might hold for food supply chains, beginning at the producer level.

His division is cooperating with the company’s distribution system to track meat using blockchain technology – including constant monitoring of its temperature – from the time it is delivered to its processing plant, through its distribution system to delivery, mainly to McDonald’s.

Cold-chain management is done today, but records are dispersed among handlers. Blockchain offers the opportunity to improve quality, avoid out-of-date waste and optimize supply, he said.

“Our goal is to improve inventory control and transparency, with a single source of truth.”
– Dr. Wayne Morgan, corporate vice president and president

Gangwish Seed Farms, Inc. Randy Gangwish grows identity preserved corn and soybeans, including seed. His contract to condition seed through delivery requires adhering to a seed company’s protocols and keeping records all through the season.

“The company doesn’t give us boxes to check off, but they will test to be sure what we deliver is what we promised,” said Gangwish, who farms in Shelton, Nebraska. “It is our job to make sure it meets the test.”

Gangwish says whoever runs a machine or performs a task enters the information into the farm record system: “It’s about communication between people in our operation. For instance, the dryer operator has to communicate with the sheller operator to make sure they are talking about the correct bins. It’s a simple system, really. The challenge is making sure things are done right.”

With blockchain, Gangwish said, his on-farm records likely would be integrated with those of the seed supplier and carried through transit to delivery – and possibly beyond. Ultimately, growers will be able to access, aggregate and share detailed records about seed, soil quality, field applications, farming practices, irrigation, weather and more.

Horan Brothers. Bill and Joe Horan farm in Rockwell City, Iowa, and were the first producers in the United States to sign a pharmaceutical contract. More contracts have followed, each with its own requirements.

The brothers have grown feed corn designed to prevent E. coli infection in hogs, rice that produces lactoferrin and L-lysine for those with compromised immune systems, such as chemotherapy patients, and potatoes to replicate human DNA.

“Corn is the most difficult because of the potential for contamination through cross pollination,” Bill Horan said. “It required a half-mile of isolation from other corn. We planted sentinel plots of white corn to detect gene flow and paid neighbors to not plant sweet corn.”

Plots have ranged from the size of a boardroom table to 40 acres, and the GPS coordinates are recorded. Plots are fenced, in some cases with two levels of electric fencing, to keep wildlife out.

“No one is allowed in a plot unless they are certified, and all of us in the operation have become certified,” Bill Horan said.

They file weekly reports of everything they see – including insects and plant disease – as well as what they don’t see. “That’s the hard part,” according to Horan. “For example, if you have grasshoppers in a nearby field but not in the plot, you need to log that.”

Bill Horan says blockchain technology could fit into their operation. Inspectors are sent by the Animal and Plant Health Inspection Service (APHIS) seven times during the season, and blockchain would enable them to more readily share their verification of data, both with Homeland Security and pharmaceutical companies.

 

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