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How Blockchain Will Impact Agriculture
Technology presents amazing opportunities for farmers, says Bill Even, CEO of the National Pork Board. Blockchain, for example, is in a space that’s moving very rapidly and is already impacting the meat industry. He shares the following thoughts about the new technology.
What is blockchain?
Blockchain is an emerging way for businesses, industries, and public organizations to almost instantaneously make and verify transactions using a digital transaction ledger —streamlining business processes, saving money, and reducing the potential for fraud.
How is blockchain used for businesses?
Maersk, for example, is starting a new company to build the system with IBM for international shipping. They estimate they can get $1 trillion out of the cost of global logistics and shipping alone. Trillion with a “T.”
What drives innovation in business is the ability to save money, make money, or drive efficiencies in the chain. When you’re dealing with international paperwork, whether it’s moving pork or flat-screen TVs, it doesn’t matter. That traceability is going to appear where there’s documentation occurring in all kinds of languages. That is where you’re going to see this hit first.
There’s an active effort to use blockchain to trace pork from farms in China.
Why is the Pork Board studying blockchain?
It is incumbent upon the Pork Board to figure out how we get engaged in these systems to understand what are going to be the rules of the road, and what are the implications.
Traceability and transparency is something that is becoming increasingly demanded by the supply chain. When a company or brand puts something on a label or website they want to make sure it is actually verifiable. There’s nothing worse for one of these brands than to have somebody say, "Aha, you were lying. These pigs weren’t well treated.” Or, “Aha, you were lying, these pigs weren’t in this environment or these chickens were not cage-free.” That sort of thing can really damage your brand.
When companies make sustainability, social responsibility, and environmental claims they want to make sure that everybody in that supply chain is doing what they said they’ve done.
What are the first impacts of blockchains for agriculture?
Most of the initial efforts in blockchain in agriculture is with traceability. China has used the technology to trace pork and beef. You can create an efficient supply chain that allows you to trace products and improve transactional efficiencies. It's about improving margins by reducing bureaucracy while supporting business continuity via traceability. Companies like Wal-Mart are adopting it because it saves a lot of money.
Consumer-facing applications are a by-product that can be sourced from blockchain data. There is the ability of each of the players in that system to tell a little bit of their story. That ends up building consumer confidence. The consumer can look at a label and say, “Oh, I understand what diet this animal was fed. I understand where they were raised. I understand what packing plant they came from.”
Food safety has been a concern in China, so blockchain technology is developing at a faster rate there than in the U.S. People want to be confident in the food they’re eating, whether that’s U.S. pork, or Chinese beef. That’s why you’re seeing innovation occur in some of these countries that are really trying to get behind the fact that it’s safe to eat pork, or it’s safe to eat beef, or it’s safe to eat eggs or poultry or drink the milk. That seems to be really what’s driving it.
Where are the stumbling blocks?
U.S. farmers do a pretty good job of tracking and keeping records, up to the packing plants, and then the packing plants do a good job from that point on. But we’ve got a little bit of a gap in the supply chain in the pork industry. When you break down that hog, how do we know the source of the individual components as they go through the system? The industry and technology will solve that riddle. Right now, in the U.S., that is the stumbling block for blockchain.
How can we use blockchain to our advantage?
The Pork Board is asking, can we use blockchain for the common swine industry audit? Can we use it for Pork Quality Assurance? Can we use it for Transport Quality Assurance? Can the producer quickly prove that, yes, I did do the things that I said I was going to do, and it’s uploaded in an immutable fashion in a digital ledger? It’s up to you what you put in, and it’s up to you who you grant permission to look at the data.
We really see some opportunities to help the pork industry with existing programs. And we want to be involved in these conversations with IBM and Walmart and others up-front, so that we understand what those implications are.
Another reason we are exploring and researching this is that we don’t want someone else creating the rules in a system without our input. It’s a better position to help pioneer than to be forced to work in a system designed for someone else's needs.
Will farmers embrace this technology?
The speed at which technology’s coming at us can be scary, but it also presents amazing opportunities. We’re on the cusp of being able to do some fantastic things to improve the health of pigs and the people who use our products. This is an area that’s rich in invention, rich in innovation, and rich in competition. As competitive as we are in the pork industry, we’ll step into that gap and figure out how to maintain our innovation and competitive edge. We look forward to being able to do that.