I spend a lot of time (too much!) commuting back and forth between my home in Calgary and Absolute Combustion’s office in Edmonton. It’s definitely not the most exciting drive – for most of the trip, it’s just long stretches of farmland, one of our province’s most important industries. But as I look out the window, it makes me think about how blockchain, one of our newest and most disruptive emerging technologies, may have its biggest impact on humanity’s oldest economic activity – agriculture.
In the modern world, it’s easy to forget how much we depend on farmers every day. Of course, many of the farms our food comes from don’t exactly look like the little plots of land that families planted and harvested up until a few generations ago. Now, they’re more likely to be run by huge corporations and take up thousands of acres of land – and in business, bigger scale always means more data.
This is where blockchain comes in. Not only can the technology help optimize supply chains as food products make their way to market, but it can actually help farmers grow their business and save a lot of money. And this even applies to the small traditional farmers in developing countries as well as large industrial mega-farms. When I started researching what using blockchain could do for agribusiness, I found some of the up-and-coming applications very surprising – maybe you will too!
Access to Markets
One of blockchain’s biggest advantages is that it helps people (and businesses) transact directly – when there’s no need to check and verify large amounts of data and suppliers and buyers can make easy direct payments, it reduces the need for intermediaries like brokers. Also, when blockchain-enabled trading platforms allow farmers to gain access to wider international markets, it can help stop the nearly $950 billion in food wastage that occurs every year.
One of the biggest growth areas for blockchain technologies is in insurance – crop failures due to weather are a major expense and cause of bankruptcy for small farmers in developing nations where data that could support claims is hard to establish. The cost of obtaining insurance is also extremely high, meaning that blockchain-based microinsurance programs, like in Africa, could mean the difference between success and catastrophe for millions of hard-working farmers.
Around the world, small farmers struggle to expand their businesses because they don’t have access to the funds they need to grow. In worse cases, they’re so overburdened with expensive debt that one poor crop season could cause their farms to fail. Sadly, this is a tragic cause of tens of thousands of suicides a year. Innovative companies across the globe are pioneering blockchain token raises to help small farmers find fair investments that allow them to thrive and grow, on terms they can sustain.
Global investment in blockchain technologies for agriculture (www.marketsandmarkets.com)
Farm to Table
Of course, managing supply chains is one of the biggest benefits of blockchain, and there are so many steps from the farm to table that it has the ability to add tremendous value. Probably the biggest benefit is consumer safety – in one test, Walmart found that using blockchain reduced the time it took to trace produce from 7 days using their old system, down to just over two seconds! Now, the retail giant is implementing blockchain databases for its lettuce and spinach suppliers, both major sources of food-borne illness.
This helps protect people from buying tainted foods, and since food recalls cost can cost companies around the world hundreds of millions of dollars a year, it’s a major economic benefit. Blockchain can also help verify that foods are organic or grass-fed with scannable apps and allow companies to optimize distribution of products through better data management.
And there are so many more applications, with new ones emerging all the time. Blockchain’s benefits to agribusiness may be recent, but investment is projected to rise dramatically over the next few years. According to research firm Markets and Markets, the $60.8 million agriculture and food companies spent on blockchain technologies in 2018 will rise to almost $430 million by 2023. That’s a huge leap in just 5 years!
When it comes to blockchain’s use in agriculture, Alberta has a big advantage. Not only is our agricultural industry a world-leader in standards and quality, but we have some incredibly creative companies, including TrustBIX and the law firm MNP, who are helping move blockchain adoption forward to benefit our farmers and our economy.
Representatives from these innovative companies are going to be the fascinating panelists for our Blockchain in Agriculture discussion at the next Alberta Blockchain Consortium Wine & Cheese in Edmonton, our monthly event that shines a light on emerging blockchain applications that benefit our province. Please visit us to learn more and reserve your free ticket – hope to see you there!