Cloud-based, shared and transparent record keeping improves transparency and traceability throughout food system.
Know what blockchains are? No, you don’t put them on tires to improve traction, or use them to pull your truck out of the mud. Blockchains are nothing you can see, smell or taste, unless you’re a computer.
Simply put, blockchains are shared, traceable and transparent ledgers for record keeping. They capture information for each transaction in a supply chain, agreed upon by each of the business network members and made permanent once consensus is reached among those chain members. People can understand what’s happening in the chain of transactions, but not the individual actors who are making it happen.
Seems a little ‘out there’ for most farmers, but blockchains could transform the security, safety and efficiency of our food system.
“Blockchain is one of the most exciting digital technologies. It’s also one of the most difficult to get your head around,” says Aidan Connolly, chief innovation officer and vice president of corporate accounts at Alltech. He says there are tremendous applications for agriculture, with the biggest being food security. “As farmers we have not typically liked people to know, for example, where our livestock come from. At the same time, when there is a disease outbreak we want to be able to trace it back.” He says blockchain technology can enhance security while protecting the players.
Connolly expresses the potential for block chain technology by pointing to Walmart, who rolled out block chain technology in China and was impressed by its potential enough to bring it to the U.S. and other areas of the world where it does business. If Walmart is successful with the technology, other retailers are certain to follow.
“Traceability is a fundamental part of our future. Recapturing the confidence of consumers is important, and I think block chain is a technology that allows us to do so in a manner that allows us to be comfortable in knowing that we are not giving all of our secrets, and not trading away our margins to the food retailer,” Connolly says.
Other industries are using block chain technology, says Michael Boehlje, a distinguished economics professor at Purdue University. The diamond industry, for example, uses the technology to not only trace the whereabouts and authenticity of diamonds, but verify the practices used to harvest the precious gems. “This whole issue of traceability and food safety will be the biggest impact block chains have on the agriculture sector.”
There are several firms getting involved in blockchain technology, says Lance Koonce, a partner at Davis Wright Tremaine who analyzes new technology trends. He says that blockchains could indeed transform the food industry from an efficiency, transparency and food safety standpoint, but several issues remain to be resolved. That includes things like authentication and payment management. Plus, not everyone in the food chain is ready for the greater transparency offered by blockchain technology.