Could Blockchain Revolutionise the Grain Industry?
This is a contributed article from Primetics, an agribusiness software company that develops and provides solutions for the grain, seed, feed, milling and malting sectors.
There has been a growing buzz around blockchain in the food industry, especially when it comes to the traceability of food products. Most notably, last year Walmart decided in was going to use blockchain technology to track its vegetables, following a contaminated lettuce scare. Working with IBM and 11 other food companies, they aimed to ensure that it was easy to accurately pinpoint the farm of origin of any vegetable found in any of their stores.
In the grain industry, traceability is just as important. Grains are very sensitive to moisture and contamination and can be exposed to both at various points along the supply chain. Currently, information on the origins and quality of grains is kept in spreadsheets, which can lead to inaccurate and out-of-date information. Some believe that blockchain technology, with its resistance to the duplication and tampering of information, its natural timestamping and its accessibility by all parties at any time, could be a solution to this. Others, however, have their reservations about the feasibility of widely implementing blockchain in the agriculture industry.
One example of blockchain being used in the grain industry is in the form of a blockchain business network in Brazil. This was set up by the Brazilian Grain Exporters Business Network (GEBN) to aggregate data on grains, to be shared amongst the different business partners involved in the network. According to a case study carried out on the network, this blockchain implementation has generally been successful and beneficial to the parties involved. The system used blockchain smart contracts to ensure a better flow of information between members, replace multiple binary business relationships and eliminate the need for intermediaries in some business processes. This has resulted in a reduction of information asymmetries and, in turn, a reduction of disputes between the parties. Having a single shared version of the truth improved trust between all members of the network.
Experts from agribusiness software company Primetics, however, have their reservations about whether widespread implementation of blockchain in the agriculture industry would work. In the UK, attempts to implement a widespread, centralised electronic system for tracking grain data, the “eGrain passport”, ended up being unsuccessful after different parties were unable to agree on which data would have to be shared on a compulsory basis. This difficulty in aligning various conflicting interests is just one potential barrier to the implementation of an industry-wide blockchain network.
While the Brazilian GEBN Blockchain business network was generally successful, it was not an industry-wide project. Leigh Roberts, General Manager at agribusiness software provider Primetics, says that blockchain “has generated significant interest from various industries and does fit the supply chain industry model well, but the complexity around deployment, requiring a top down all or nothing approach to be truly beneficial, is a limiting factor to its long term success across multiple industries. Agriculture, for instance, is a highly complex industry with varying degrees of software requirements and with a wide variety of stakeholders who would find it extremely difficult to get behind one technology.” While he comments that if “B2C companies, who can have a big influence on the whole market, worked in collaboration to kick-start a blockchain revolution then blockchain would have a chance,” he also notes that this would require significant initial investment, which companies may be tentative to offer up for an experimental project.
In conclusion, while there is certainly potential for the use of blockchain for quality control in the grain industry, it is yet to be seen whether a big industry force will get behind the technology to explore and exploit its full potential.