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.
