Produce Toolkit Webinar: New Insights on Mexico's Produce IndustrySign Up
Blockchain technology came to popular notice with the rise of bitcoin and other cryptocurrencies. The technology allows for highly secure digital transactions and recordkeeping. Even though blockchain found its first use in cryptocurrencies, the concept can be applied to all sorts of transactions, including agricultural ones.
Blockchain can reduce inefficiencies and fraud while improving food safety, farmer pay, and transaction times. The agricultural industry should be teeming with excitement about the coming infusion of blockchain technologies. However, technological transformation often comes with unforeseen drawbacks and challenges.
Blockchain creates a secure and transparent ledger system that’s available to all parties within a supply chain including producers, retailers, logistics providers, and regulators. This shared ledger compiles a comprehensive record of each asset, all transactions in its history, and its current ownership. Each change to the ledger must be verified by all parties, which gives the process trustworthiness and transparency. Changes can be made manually or automatically by adhering to a set procedure that was unanimously pre-approved during the design of the technology.
Potential applications span a variety of different sectors and industries, from financial services to used car sales. Startups are already exploring potential applications for the agricultural sector.
Blockchain provides a more secure communication system that allows for faster and more transparent information sharing. Its main benefit may simply be moving transaction data away from the antiquated pencil-and-paper systems in use now.
Blockchain promises to improve traceability and transparency within agriculture value chains. The ability to quickly trace the origin of food products would be an invaluable tool during contamination incidents. With blockchains, regulators can quickly identify the source of the contaminant and determine the scope of affected products. A more timely response by food companies can prevent illness, limit food waste, and contain financial fallout.
A report by the Food Marketing Institute and Grocery Manufacturers Association found that an average food recall costs $10 million, exclusive of brand damage and lost potential sales. Other more high profile recalls have had costs as high as $1 billion, such as the peanut salmonella outbreak in 2009. While UPC codes provide some tracking capabilities, much of this information is recorded in siloed databases and undigitized archives. A tracking system that is more accessible and easier to query can be built with blockchain technology, driving down the time it takes organizations and authorities to identify food contamination origins.
More than a third of all food farmed is wasted, and food waste costs the food industry nearly one trillion dollars annually. Since blockchain transactions can be completed faster and are less likely to be disputed, spoilage along the supply chain can also be reduced. They can also help identify bottlenecks that are contributing to spoilage.
The additional transparency that blockchain models afford can also play a significant role in fighting food fraud. As consumer demand for organic, GMO-, and antibiotic-free food soars, the news is rife with cases of fraudulent labeling. The smallest transactions—whether at the farm, warehouse, or factory—can be monitored efficiently and communicated across the entire supply chain when paired with IoT (internet of things) technologies, such as sensors and RFID tags. Maersk, a shipping and logistics company, has intra-continent supply chains that involve dozens of personnel and hundreds of interactions. They estimate that blockchain could save them billions by improving efficiencies that reduce fraud and human error.
The benefits of openness extend to all honest market participants. Blockchain technologies can prevent price extortion and delayed payments while simultaneously eliminating middlemen and lowering transaction fees. This can lead to fairer pricing and even help small-holder farmers capture a larger part of their crop value.
Take small-holder coffee farmers in Kenya as an example. Coffee at the Kenyan exchange typically fetches a price around 15 times what farmers get paid—and then roasters pay even more. Blockchain can add pricing transparency betweens farmers and the marketplace. Grain millers are rarely accountable to farmers. They often report lower milling yields, so farmers fail to capture the true value of their crop. In other cases, transportation companies report higher losses and traders report lower grades and pricing than what was actually allocated at the exchange. Since each participant of the supply chain reports the same figure to both the sender and the receiver of the delivery, the true value of a farmer’s harvest can be easily verified.
Farmers all over the world, from West African cocoa planters to Indian sugarcane farmers, depend on buyers to honor contracts and pay in a timely manner. Buyers often enter price contracts with farmers before the season starts, but default when changing futures prices make the contract unprofitable. Then the poor farmers are left to scramble for another buyer. Even those lucky enough to find another contract may be forced to take a major price cut. Often the lag means that significant spoilage occurs among products, eroding the value of the sale even more.
One startup, Full Profile, is tackling these issues by enabling real-time transactions for farmers through “smart contracts” that run on blockchain. Because pre-approved logic can be built into a blockchain—as long as all parties have opted in—payments can be made immediately following the transfer of asset ownership. Full Profile has estimated that supply chain risk, inefficiencies, and insolvency cost the Australian grains industry $1 billion, a significant proportion of which can be recouped through blockchain solutions.
Even when contracts are honored, currency fluctuations can create unnecessary costs to all players in the supply chain. Russia has developed a cryptocurrency just for their beef market, in order to shelter both farmers and traders from this volatility. Blockchain technology is being used by banks to further mitigate risk through innovative insurance products which use satellite-collected weather data to verify farmer identities and claims.
Blockchain technologies may sound like a panacea for the diverse issues plaguing the food and agricultural sector. Yet critics argue that there are plenty of supply chain tracking solutions already in place, and that "blockchain is a solution looking for a problem."
There are also many adoption hurdles that dampen the touted benefits of blockchain solutions. All parties in a supply chain must adopt the technology, and all companies and organizations are not equally nimble. Full engagement across all participants is necessary for successful blockchain integration.
Widespread blockchain adoption requires access to a reliable internet connection. Beyond smallholder farmers in developing countries, broadband is not a viable option for many farmers living in rural areas. Approximately 10 percent of the total United States population does not have a high-speed internet connection. That number jumps to 39 percent in rural areas of the US. The lack of infrastructure required for digital transactions will need to be addressed before blockchain can be adopted by farmers.
Unnecessary delays can result from something as simple as an individual losing a private key. At worst, a compromised key threatens the security of the entire chain, especially if that key falls into the hands of hackers.
While blockchain is meant to prevent fraud, digital transactions can be just as vulnerable as paper ones if they’re made the target of hackers and not properly secured. The accepted “immutability” of blockchain information could actually make it easier for interlopers to change the trusted ledger to one party’s benefit (such as obscuring a failed pesticide test or adding a fake organic certification).
Security concerns may be the biggest hurdle for blockchain to overcome. Every transaction becomes data that is then stored. While blockchain is considered safe and “unhackable,” the same can’t be said for the systems developed around the technology. Security breaches in Bitcoin exchanges and, more recently, in Ethereum exchanges have led to hundreds of millions of dollars in losses.
Any device used in the blockchain is also a potential source of vulnerability. Weak passwords and a poor network structure can expose an entire business to hackers seeking a ransom or lost productivity. IoT botnets consisting of thousands of smart devices that were taken over due to faulty security have led to widespread internet outages. The adoption of new technology requires trust, which may be hard to come by with farmers skeptical of new technology that's been in the news and who don't have access to high-speed internet access.
Blockchain could transform agriculture, but that outcome is very much in the future. The technology will receive plenty of chances to succeed as food security becomes an alarming challenge in the face of climate change. However, there are plenty of pitfalls that could stop blockchain adoption in its tracks.
Differences in regulation may also prevent widespread adoption, particularly among international food and beverage companies. While smallholder farmers in developing countries might benefit the most from blockchain, they also may face the most difficulty adopting it. Spotty network connectivity, outdated technology, and knowledge gaps could all impede implementation of blockchain or at least require further innovation for success.
There’s also plenty of skepticism about many of the claims and benefits. Proponents of blockchain argue that it can quicken transaction times and trust between parties, since all parties need to sign-off on each immutable transaction.
Finding the right balance of flexibility within customized blockchain systems may therefore allow all parties to enjoy the benefits of this potentially powerful technology.
What Information Do We Collect?
The information we gather enables us to personalize, improve and continue to operate the Services. We collect the following types of information from our users.
IP Address Information and Other Information Collected Automatically:
· We automatically receive and record information from your web browser when you interact with the Services, including your IP address and cookie information. This information is used for fighting spam/malware and also to facilitate collection of data concerning your interaction with the Services (e.g., what links you have clicked on).
· Generally, the Services automatically collect usage information, such as the number and frequency of visitors to the Site. We may use this data in aggregate form, that is, as a statistical measure, but not in a manner that would identify you personally. This type of aggregate data enables us and third parties authorized by us to figure out how often individuals use parts of the Services so that we can analyze and improve them.
Information Collected Using Cookies:
· Most browsers have an option for turning off the cookie feature, which will prevent your browser from accepting new cookies, as well as (depending on the sophistication of your browser software) allowing you to decide on acceptance of each new cookie in a variety of ways.
We collect statistical information about how users collectively use the Services (“Aggregate Information”). Some of this information may be derived from Personal Information. This statistical information is not Personal Information and cannot be tied back to you or your web browser.
How, and With Whom, Is My Information Shared?
IP Address Information:
Information You Elect to Share:
We share Aggregate Information with our partners, service providers and other persons with whom we conduct business. We share this type of statistical data so that our partners can understand how and how often people use our Services and their services or websites, which facilitates improving both their services and how our Services interface with them. In addition, these third parties may share with us non-private, aggregated or otherwise non Personal Information about you that they have independently developed or acquired.
Information Shared with Our Agents:
We employ and contract with people and other entities that perform certain tasks on our behalf and who are under our control (our “Agents”). We may need to share Personal Information with our Agents in order to provide products or services to you. Unless we tell you differently, our Agents do not have any right to use Personal Information or other information we share with them beyond what is necessary to assist us. You hereby consent to our sharing of Personal Information with our Agents.
Information Disclosed Pursuant to Business Transfers:
In some cases, we may choose to buy or sell assets. In these types of transactions, user information is typically one of the transferred business assets. Moreover, if we, or substantially all of our assets, were acquired, or if we go out of business or enter bankruptcy, user information would be one of the assets that is transferred or acquired by a third party. You acknowledge that such transfers may occur, and that any acquirer of us or our assets may continue to use your Personal Information as set forth in this policy.
Information Disclosed for Our Protection and the Protection of Others:
Information We Share With Your Consent:
Except as set forth above, you will be notified when your Personal Information may be shared with third parties, and will be able to prevent the sharing of this information.
Is Information About Me Secure?
We store all of our information, including your IP address information, using industry-standard techniques. We do not guarantee or warrant that such techniques will prevent unauthorized access to information about you that we store, Personal Information or otherwise.
What Information of Mine Can I Access?
You can access and delete cookies through your web browser settings.
California Privacy Rights: Under California Civil Code sections 1798.83-1798.84, California residents are entitled to ask us for a notice identifying the categories of personal customer information which we share with our affiliates and/or third parties for marketing purposes, and providing contact information for such affiliates and/or third parties. If you are a California resident and would like a copy of this notice, please submit a written request to the following address: 1156 6th Ave, 7th Floor, New York, NY 10036
What If I Have Questions or Concerns?
If you have any questions or concerns regarding privacy using the Services, please send us a detailed message to firstname.lastname@example.org. We will make every effort to resolve your concerns.
Effective Date: March 11, 2014
b. You shall not (directly or indirectly):i. take any action that imposes or may impose (as determined by us in our sole discretion) an unreasonable or disproportionately large load on our (or our third party providers’) infrastructure;ii. interfere or attempt to interfere with the proper working of the Services or any activities conducted on the Services;iii. bypass, circumvent or attempt to bypass or circumvent any measures we may use to prevent or restrict access to the Services (or other accounts, computer systems or networks connected to the Services);iv. use manual or automated software, devices, or other processes to “crawl” or “spider” any page of the Site;
v. harvest or scrape any Content from the Services;
vi. otherwise take any action in violation of our guidelines and policies;vii. decipher, decompile, disassemble, reverse engineer or otherwise attempt to derive any source code or underlying ideas or algorithms of any part of the Services (including without limitation any application), except to the limited extent applicable laws specifically prohibit such restriction;viii. modify, translate, or otherwise create derivative works of any part of the Services; orix. copy, rent, lease, distribute, or otherwise transfer any of the rights that you receive hereunder.c. We also reserve the right to access, read, preserve, and disclose any information as we reasonably believe is necessary to:i. satisfy any applicable law, regulation, legal process or governmental request;ii. enforce these Terms of Service, including investigation of potential violations hereof;
iii. detect, prevent, or otherwise address fraud, security or technical issues;
iv. respond to user support requests; or
v. protect the rights, property or safety of us, our users and the public.4. Third Party Services. The Services may permit you to link to other websites, services or resources on the Internet, and other websites, services or resources may contain links to the Services. When you access third party resources on the Internet, you do so at your own risk. These other resources are not under our control, and you acknowledge that we are not responsible or liable for the content, functions, accuracy, legality, appropriateness or any other aspect of such websites or resources. The inclusion of any such link does not imply our endorsement or any association between us and their operators. You further acknowledge and agree that we shall not be responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any such content, goods or services available on or through any such website or resource.5. Termination. We may terminate your access to all or any part of the Services at any time, with or without cause, with or without notice, effective immediately. All provisions of these Terms of Service which by their nature should survive termination shall survive termination, including, without limitation, ownership provisions, warranty disclaimers, indemnity and limitations of liability.6. Warranty Disclaimer.a. You release us from all liability for you having acquired or not acquired Content through the Services. We make no representations concerning any Content contained in or accessed through the Services, and we will not be responsible or liable for the accuracy, copyright compliance, or legality of material or Content contained in or accessed through the Services.b. THE SERVICES AND CONTENT ARE PROVIDED “AS IS”, “AS AVAILABLE” AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND ANY WARRANTIES IMPLIED BY ANY COURSE OF PERFORMANCE OR USAGE OF TRADE, ALL OF WHICH ARE EXPRESSLY DISCLAIMED. WE, AND OUR DIRECTORS, EMPLOYEES, AGENTS, SUPPLIERS, PARTNERS AND CONTENT PROVIDERS DO NOT WARRANT THAT: (I) THE SERVICES WILL BE SECURE OR AVAILABLE AT ANY PARTICULAR TIME OR LOCATION; (II) ANY DEFECTS OR ERRORS WILL BE CORRECTED; (III) ANY CONTENT AVAILABLE AT OR THROUGH THE SERVICES IS FREE OF VIRUSES OR OTHER HARMFUL COMPONENTS; OR (IV) THE RESULTS OF USING THE SERVICES WILL MEET YOUR REQUIREMENTS.7. Limitation of Liability. IN NO EVENT SHALL WE, NOR OUR DIRECTORS, EMPLOYEES, AGENTS, PARTNERS, SUPPLIERS OR CONTENT PROVIDERS, BE LIABLE UNDER CONTRACT, TORT, STRICT LIABILITY, NEGLIGENCE OR ANY OTHER LEGAL OR EQUITABLE THEORY WITH RESPECT TO THE SERVICES FOR ANY (I) LOST PROFITS, DATA LOSS, COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, COMPENSATORY OR CONSEQUENTIAL DAMAGES OF ANY KIND WHATSOEVER, SUBSTITUTE GOODS OR SERVICES (HOWEVER ARISING), (II) BUGS, VIRUSES, TROJAN HORSES, OR THE LIKE (REGARDLESS OF THE SOURCE OF ORIGINATION), OR (III) DIRECT DAMAGES IN EXCESS OF $50.00.8. Governing Law and Jurisdiction. These Terms of Service shall be governed by and construed in accordance with the laws of the State of New York, including its conflicts of law rules, and the United States of America. You agree that any dispute arising from or relating to the subject matter of these Terms of Service shall be governed by the exclusive jurisdiction and venue of the state and Federal courts of New York County, New York.9. Miscellaneous.a. Modification. We reserve the right, in our sole discretion, to modify or replace any of these Terms of Service, or change, suspend, or discontinue the Services at any time. Your continued use of the Services following notification of any changes to these Terms of Service constitutes acceptance of those changes.b. Entire Agreement and Severability. These Terms of Service are the entire agreement between you and us with respect to the Services, including use of the Site, and supersede all prior or contemporaneous communications and proposals (whether oral, written or electronic) between you and us with respect to the Services. If any provision of these Terms of Service is found to be unenforceable or invalid, that provision will be limited or eliminated to the minimum extent necessary so that these Terms of Service will otherwise remain in full force and effect and enforceable. The failure of either party to exercise in any respect any right provided for herein shall not be deemed a waiver of any further rights hereunderc. Force Majeure. We shall not be liable for any failure to perform our obligations hereunder where such failure results from any cause beyond our reasonable control, including, without limitation, mechanical, electronic or communications failure or degradation.d. Assignment. These Terms of Service are personal to you, and are not assignable, transferable or sublicensable by you except with our prior written consent. We may assign, transfer or delegate any of our rights and obligations hereunder without consent.e. Agency. No agency, partnership, joint venture, or employment relationship is created as a result of these Terms of Service and neither party has any authority of any kind to bind the other in any respect.f. Notices. Unless otherwise specified in these Term of Service, all notices under these Terms of Service will be in writing and will be deemed to have been duly given when received, if personally delivered or sent by certified or registered mail, return receipt requested; when receipt is electronically confirmed, if transmitted by facsimile or e-mail; or the day after it is sent, if sent for next day delivery by recognized overnight delivery service. Electronic notices should be sent to email@example.com. No Waiver. Our failure to enforce any part of these Terms of Service shall not constitute a waiver of our right to later enforce that or any other part of these Terms of Service. Waiver of compliance in any particular instance does not mean that we will waive compliance in the future. In order for any waiver of compliance with these Terms of Service to be binding, we must provide you with written notice of such waiver through one of our authorized representatives.h. Headings. The section and paragraph headings in these Terms of Service are for convenience only and shall not affect their interpretation.Contact. You may contact us at the following address: 1156 6th Ave, 7th Floor, New York, NY 10036.