By utilizing blockchain in the food industry, consumers are able to verify the source and safety of their food in seconds.
Just as natural resources shaped the Industrial Revolution, big data is the driving force in the digital revolution — which has changed the ways we perceive, share and interact with that data.
The influx of information moving to the cloud in recent years has forged new industries focused on compiling, analyzing, managing, securing and monetizing said data. The digitalization of consumer information has proven to hold immense value, so much so that the World Economic Forum (WEF) has classified data as a new asset class.
On the other hand — the world population is expected to rise to almost 10 billion by 2050. To feed this number of people, we need to increase food production while using fewer resources.
Smart Agriculture will improve the global economy
There is a growing body of literature that recognizes the importance of utilizing emerging technologies in smart agriculture. Smart Agriculture is a new technology that makes use of Information Technology (IT), satellite technology, Geographical Information System (GIS), and remote sensing for enhancing all functions and services of agriculture.
To enhance agriculture, modern farmers, scientists, technology developers and connected stakeholders have started to rely upon mobile apps, smart sensors, drones, cloud computing, Artificial Intelligence (AI), Internet of Things (IoT) as well as blockchain. Based on these technologies, it has become possible to process and access real-time data about the conditions of the soil, crops, and weather along with other relevant services such as crops and fruits supply chain, food safety, and animal grazing.
Many statistical reports show that smart agriculture will improve the global economy based on the application of advanced technology to all agriculture sub-sectors. According to market reports, the global market of precision agriculture will grow at an average rate of 13.7% to reach 10.55 billion U.S. dollar by 2025. Also, the global smart farming market is estimated to grow from USD 7.0 billion in 2020 to USD 12.8 billion by 2025, at a Compound Annual Growth Rate (CAGR ) of 12.7%.
Blockchain technology represents the latest new technology that can be used for mitigating significant challenges in precision agriculture, especially when integrated with IoT technology. According to a new market intelligence report by BIS Research, employing blockchain technology in smart agriculture, and food supply chain markets is estimated to increase from $41.9M in 2018 to $1.4 Billion by 2028.
A blockchain is essentially a ledger in which agents take turns recording information on the process of generating, transacting and consuming a product or service. The ledger is collectively managed by all participating parties typically through a peer-to-peer network.
A new record must be verified by the network before adding it to the blockchain.
Any alteration to the recorded data should follow consensus decision-making protocol, meaning the majority of the parties involved should agree. In addition, an alteration to one record will lead to the alteration of all its subsequent records.
It is, therefore, almost impossible to change in data recorded in a blockchain in practice. Blockchain is viewed as “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”. Blockchain is a transformative ICT that have the potential to revolutionize how data is used for Agriculture.
Blockchain adoption in smart agriculture and food supply chain market is estimated to grow at a Compound Annual Growth Rate (CAGR) of 47.8% by 2023. Also, utilizing blockchain technology in the supply chain market was evaluated to be $60.8 million in 2018 and is forecasted to reach $ 429.7 million by 2023.
Blockchain Use cases in Smart Agriculture
Using blockchain technology in smart agriculture can introduce innovations and improve many functions such as monitoring and traceability, transparency, and efficiency at levels of the farmers and the consumers.
Improved Farm Oversight
Building smart farms based on IoT sensors such as temperature, humidity, light, crop maturity sensors e.t.c enable farmers and other connected stakeholders to digitize the obtained agricultural data from the sensors for different purposes. Using blockchain technology for this process will provide more rapid and smooth communication between sensor networks.
For example, blockchain can be used for monitoring crop storage techniques for preventing post-harvest losses. It can be used for tracking CO2 concentration for avoiding mould growth invasion. Traditional sensors able to detect the potential for losses 3 to 5 weeks earlier than traditional monitoring techniques do, however, 52% of the nation’s essential fruits and vegetables are being thrown out due to missing the control and monitoring over the supply chain.
Supply Chain Monitoring
Monitoring processes of the supply chain using a public blockchain ledger adds a great value to agricultural goods and promote the transparency of supply chain processes.
Blockchain enables consumers to track agricultural machinery, crops, and livestock for proving quality and ethicality. It can provide consumers and stakeholders more trust in the agricultural products, ensuring food safety, and reducing food frauds. In the supply chain process, blockchain can provide key services:
1. Data Recording. Blockchain can work as a distributed storage unit for all information moving between supply chain nodes
2. Monitoring. Blockchain can track purchases, orders, updates, receipts, shipment notifications, or other trade-related transactions.
3. Verifying. Blockchain can be utilized for verifying transactions or certain properties of physical products, such as identifying if a food product is an organic or fair trade
4. Assigning and Linking. Blockchain can be used to link the physical products to bar codes, serial codes, digital tags like RFID, etc.
5. Sharing. Blockchain can be utilized for disseminating information about manufacturing procedures, delivery, assembly and maintenance of agricultural products with suppliers and vendors.
Blockchain can be very useful in the process of determining, recording and sharing transactional information about rights, value, and use of land pieces. All over the world, the current classical land registry system has a lot of limitations. These systems don’t provide the full authentication for all land transactions between peoples, organizations, and governments. It is estimated that about(70–80%) of land transactions worldwide are not formally registered in any national system.
Blockchain can enhance data security and ensure the authenticity of land registration records. With the transparent, decentralized public ledger it becomes easy to store time-stamped land transactions and historical rights of land pieces. Since blockchain does not rely on a single data centre, It can auto-reject any illegal land transaction.
It can detect tamper proofs on registered records and protect all land transactions and registry details based on “colored coins’’. The colored coins-based protocol can be applied to land registration by representing the ownership of a piece of land by a single or multiple tokens. The metadata associated with the token can be used to monitor public registry information such as size, GPS coordinates, year built etc. Verifying and tracking the ownership of each token can be executed across the internet using a blockchain explorer software.
Proof of Concept with Ethereum is a good integration example of colored coins in managing the ownership and land transactions.
In the food industry, Blockchain could transform the entire process and introduce untraditional solutions for food problems. Several studies reported that almost 1 in 10 people in the world fall ill after eating contaminated food every year. IBM, reports that 68.2% of food safety event happened in China was caused by illegal activities and the cost of food fraud incidents reach 10B-15B annually.
Utilizing Blockchain in the food industry, consumers will be able to verify the source and safety of their food in seconds. Blockchain could be used to tell consumers that the fruit and vegetables were grown with herbicide. It will provide real-time tracking, authenticating, securing and monitoring functions for the food supply chain process.
Blockchain also can introduce good solutions for detecting food fraud and enhance provenance transparency such as organic food verification. Although utilizing blockchain technology in food safety is in its early stage, some interesting benefits of integrating blockchain and IoT can be summarized as follows:
1. Food tracking and monitoring management.
2. Reducing the agri-food loses and logistic costs
3. Detecting food fraud and verifying product information.
4. Protecting agri-food safety information based on integrating RFID technology with blockchain and IoT
5. Maintaining the safety and quality of food products.
6. Facilitating the communication between all stakeholders of the food industry process. Integrating IoT sensors and electronics chips such as RFID tags are evolving rapidly. So, companies will be able to attach IoT sensors to food products to track and detect food fraud incidents and potential failures. Forwarding these data from IoT sensors to the blockchain can provide standardization, transparency and traceability to the supply chain and help food stakeholders to detect temper-proof. Walmart’s blockchain is a good example of tackling the food safety of Mango and Pork in the food supply chain process.
Real-Time Remittance for small farms
Farmers may need to use a public payment system for receiving real rime remittances from the agricultural organizations or the governments. With mobile blockchain systems, small farmers become able to execute real-time payments for goods, crops, agricultural services. They can receive agricultural remittances through a blockchain mobile APP. Mobile blockchain will make all real-time transactions are faster, transparent and keep farmer information.
For example, the farmer can execute all financial transactions through a mobile wallet account created on a mobile blockchain such as COIN22. When a new transaction occurs between two or more farmers, it should be verified by other farmers who work as servers for the new transactions. If the transaction is valid, a new digital token is issued regarding this transaction and stored in a new block that will be added to the COIN22-blockchain. On the other hand, based on satellite data sent to COIN22-blockchain, farmers can trace some major indexes of their farms (e.g. soil, water, drought indexes, etc) by using a digital tracer App connected with COIN22.
The rapid growth of using blockchain in precision agriculture leads to developing some platforms that can be used for various agricultural activities.
1) Provenance was founded by Jessi Baker in 2013 as the first blockchain platform that supports supply chain activities. Provenance enables producers, consumers and retailers to track their products during all stages of the product’s life cycle. It enables every physical product to authenticated by “a digital passport” that confirms its authenticity and origin for preventing selling fake goods.
With Provenance’s trust engine, the participants able to verify their supplier transactions for better supply chain integrity. They can also turn their digital certifications into data-backed marks for the customers to review, then it is forwarded to the blockchain to be stored in a secure, and genuine form. Provenance enables stakeholders to share honest stories about their goods and products in a trustworthy mode.
Producers and consumers can show the traceability of each product item through the Provenance’s tracking tool. Issuing a digital asset for a specific physical product using Provenance and connect to it via a protected tag. For example, an NFC will decrease the traceability time from days to seconds, reducing good frauds, providing faster recalls, improving transparency, protecting brand value. OriginTrail is a similar blockchain platform that developed for data integrity and validation in supply chain activities.
2) AgriDigital is a cloud-based blockchain platform founded in 2015 by a team of Australian farmers and agribusiness professionals. AgriDigital makes the agriculture supply chain simple, easy and secure between farmers and consumers. The farmers and stakeholders can manage their contracts, deliveries, orders and payments all in one place and in real-time.
The AgriDigital platform has core subsystems:
1. Transactions. Through this subsystem, farmers and stakeholders able to easily buy and sell several goods
2. Storage. In which, the accounts, payments, orders, deliver, and other sensitive information are digitized and stored
3. Communications, through which, the farmer and consumers can build the connections patterns.
4. Finance, through which financial transactions and virtual currency transfers between farmers and consumers can be performed.
5. Remit, through which, the real-time remittances issued to the farmers can be transferred.
3) IBM Blockchain is one of the most common blockchain platforms that is used in agricultural logistics. It is a good choice for optimizing agricultural transactions and global trade relationships.
What makes IBM blockchain is a popular platform for agricultural stakeholders are: the high security, multi-cloud flexibility-based transactions, trusted expertise, such that more than 1500 company and technical experts prefer to work with IBM blockchain. It can bring together regulators, suppliers, consumers, and professionals to work with each other in IBM Blockchain Ecosystem. IBM Blockchain enables equal visibility of activities and reveals where an agricultural asset is at any point in time, who owns it and what condition it is in.
In conclusion, it is important to note that blockchain is still a very recent technology, so there is a long way to go before its full set of applications can be developed and put into practice.
However, it’s becoming increasingly clear that there are opportunities in the agriculture industry. The global agriculture industry is now worth over 2.4 trillion dollars and has over one billion people involved worldwide. Now, more than ever, there is an opportunity for innovation.