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Grain on the blockchain: how digital supply chains are greening agriculture

Blockchain technology, the solution looking for a problem, has been promised to fix everything from capitalism to iced tea.

Supply chain management and provenance verification are some of the most promising (and least controversial) use cases. Australian trials in indigenous art and trademark protection are underway, and commercial applications are starting to roll out the door, with global industry leader Everledger offering solutions in luxury sectors like gemstones, wine and art.

“When we say digital in agriculture: it’s pretty low-level. It’s the world’s least-digitised industry,” says Bridie Ohlsson, head of blockchain strategy at Australian commodity management platform AgriDigital.

“A lot of our customers, when we onboard them to our software, either move off pen-and-paper or Excel. Excel is our biggest competitor,” she tells Eco-Business.

Ohlsson and her colleagues at AgriDigital have been offering the Australian grains industry software services since 2016. She is the chief operating officer of AgriDigital’s blockchain arm, Geora, which will soon launch a Singapore office for Asia-focused projects.

“Technology is supposed to be either beautiful or invisible. In 2016, blockchain was neither of those,” says Ohlsson.

Her team of farmers and engineers saw a huge potential market for the needs of agri-supply chains. Because while every supply chain is unique, there are a lot of similar components, particularly when looking at the data flows, she points out.

Bulk commodities like grains come with a unique set of logistical and economic challenges. A tonne of wheat can pass through many hands, and its characteristics may change over time. Growers, even after the product has left the farm gate, are particularly vulnerable to the environment and the market.

The AgriDigital platform can combine different sites of data capture, from different entities, to create a more complete ledger of the product’s condition, custody and journey.

A pig’s tale

AgriDigital has handled over AUD$1.2 billion (US$861 million) of grain transactions to date, representing over six million tonnes. The company is expanding into cotton and other commodities, and has begun exploring the US market.

But it is Geora’s blockchain projects which might have the most impact in Asia Pacific, such as a UN FAO/ITU-backed Papua New Guinean pig farming trial involving a mobile app, linked in with an internet-of-things device - a little tag in the pig’s ear that provides information on the animal’s care. That data is fed into a shared record within Geora.

For PNG smallholders, pigs represent their livelihoods, says Ohlsson. “They’re used to pay dowries, for financial security. They’re incredibly valuable and well taken care of, but that value is reflected by the history of their life.”

The blockchain can prove that a pig has been well taken care of. 

“There’s a lot of fraud in that pigs are pumped up with hormones pre-market, so that they receive a superior price,” says Ohlsson. “But there are some pig farmers who bathe their pigs three times a day, feed them sweet potatoes, and follow rigorous vaccination programmes.”

 

As well as rolling out across the region, Ohlsson says her company is working on ways to expand its offering, for instance providing finance for pig farmers.

Improved or innovative financing models for agricultural commodities could be life-changing for food producers. But they could also provide a way for conscious consumers to support sustainable farming through microloans or small-scale investment. 

“It’s really hard, as a consumer, to get engaged with ways to improve sustainability out of the production end [of agriculture],” Ohlssen acknowledges.

“And from a farmer perspective, there’s often the sentiment that there’s a lot of finger pointing [from consumers, blaming farmers for unsustainable practices], but very little willingness to take on any of the [moral or financial] burden. Part of it, I think, is just connectivity between the two ends of the supply chain.”

Ohlsson is excited about the possibilities that more data-rich supply chains offer, particularly in empowering agriculture that is aligned with the United Nations’ Sustainable Development Goals.

“You could loan to a farmer to implement some water monitors, so that they can monitor how much water they’re using, or they can test nitrogen levels and run-off. Even pre-purchasing some of your bread or your milk for the year - you can pay partial costs to allow for better production methods, and then pay the rest of it at the end of the year,” she says.

Brewing common values

With malted grain a major input to their product, breweries like Stone and Wood are the consumer-facing endpoint of the supply chain. James Perrin, sustainability manager at Stone and Wood, has led his organisation in improving on-site sustainability practices in energy, water and waste. Initiatives like recycling spent grain into cattle feed have earned Stone and Wood a B-Corp certification and a slew of plaudits (including the 2017 NSW Premier’s Award for Environmental Excellence).

“We’ve been able to implement some efficiency improvement; we’re now at the stage where we’re willing and able to start looking a bit further down a supply chain and understand what our biggest impacts are,” Perrin told Eco-Business.

“And that includes everything from the production ingredients, packaging materials, right through to what we’re doing here at the brewery, and downstream logistics as well.”

To date, that process has relied in large part on face-to-face, values-based discussions. Perrin emphasises that visibility into supply chains is helpful, but data and certification are support rather than substitutes for long-term partnerships based on trust.

“We would always want to have a really strong relationship with whoever we’re doing business with, and really understand not just the practices but also the company values and ethos - that’s a priority for us, when we look for suppliers,” says Perrin.

“If some of our suppliers or growers wanted to go down that track - whether it’s fair trade or regenerative or organic - that’s absolutely something that we would love to learn more about, as well as having those really good relationships built on common values.”

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