The world has been hearing about blockchain for years, but several advocates and innovators of the system admit that there’s not that much to show for it yet.
Why it matters: Value chains in agriculture tend to be inefficient with the need for humans to input information and the errors that come with that. It’s thought that an automated and trusted ledger system like blockchain could help improve efficiency.
However, human limitations in building the systems, rather than technical issues, are the main reasons benefits are slow to appear.
Blockchain is a system of highly secure ledgers, lists of information and repositories of data that are trusted by players in the chain and make information, and especially money, exchanges more efficient.
The Sustainability and Digitization Leaders agriculture conference held recently in Miami had speakers and a panel that dealt with blockchain and agriculture.
Blockchain has been put on too high a pedestal. It is just a technology tool, speakers said. And they say it’s a tool that should be paid for by others in the food chain, not farmers.
The speakers at the conference all said there are ways to improve the food system and that blockchain is a tool to make that happen.
Phil Harris is president of Ripe.io, a system that uses blockchain to trace food. He says that the “gimmicky” uses of blockchain, like allowing an affluent consumer to know where their $25 salad originated, isn’t the broad advantage that better linkages among food system player will bring. It will create more efficiency and bring together a system he sees as “fragmented, distributed and analogue.”
Others pointed to concrete examples around the world where more trust — which is important for market access and consumer confidence — can lead to better health.
Jason Rockwood, general manager of VeChain, which does work in China, said that mothers looking for infant formula are suspicious of quality after some formula was adulterated. That’s one reason Feihe, a Chinese company, is completing an infant formula plant in Kingston, Ont., for export to China.
Rockwood says a blockchain system can provide food safety assurance in areas where it’s needed.
Daniel Beckman, a founder of Foodshed.io, is using blockchain as a tool to connect farmers with low margins to “working class” buyers, who nutritionally need the food.
He used the example of squash growers in Missouri delivering to a grocery store chain across the country using the Foodshed blockchain.
“We’re trying to make local nutritious produce accessible to everybody at a price point they are paying now,” he said.
If someone wants to add another layer of information sharing on top of it to add value, then that’s fine, however he says the market of “fancy” people who care about what they’re eating is too small on which to build a system.
Keith Agoada, co-founder of Producers’ Market, a system that connects farmers and buyers in the agriculture chain, says that such systems are about using the story to increase value for farmers. In the background, however, it comes down to validating the physical provenance of a product and securing and speeding up money transaction. The system is being built using a blockchain through IBM’s Food Trust system. The farmer can access information and payment with a couple of clicks on a computer screen, but they don’t have to know that it’s a blockchain behind it.
Maya Vujinovic, an investor in agriculture technology solutions including those involved in blockchain, says that any blockchain system has to make sense for farmers. At this point there’s not enough incentive for people to share data.
“We’re running into a human versus a technology problem,” she says.
“You have to have something in it for the farmers for them to do it,” says Beckman of Foodshed.io. “You can’t ask them to pay for technology. I think that’s crazy. This stuff doesn’t help farmers, I see this all the time.”
Most of them remain optimistic that blockchain will be part of the agri-food system.
It’s like a piece of infrastructure, says Rockwood. It’s like email, the value is what you put into the system and the system just works and makes the process more efficient.
“It’s proven technology,” he said. “But we haven’t proven the business value. That’s where we are at.”