From the farm to the grocery store, and even after consumption, all components of this chain must be in synch. Here are some things to know before entering the crypto world. However, as seen with recent food recalls and supply chain scandals, such as horse meat found in McDonald’s beef products, there is a global need for communication between actors within these arenas.
It is where an organization can use blockchain and bitcoin to improve these relationships – by creating an immutable ledger that stores information about product origins and manufacturing processes. The agriculture industry is just one area where blockchain technology could radically change how things operate – but, more importantly: provide more clarity into potential risks/risks involved with sourcing ingredients from different suppliers or farms.
Product Origins and Food Safety
A blockchain and bitcoin-powered product trust system, like IBM Food Trust, can be used to ensure product origins and traceability. Consumers are concerned about how food is sourced and where it is made. With blockchain technology, an immutable ledger could be created by companies to record a product’s journey from its ingredients to the shelf – from farm to fork. This way, consumers could know what they are eating, and the transparency would assuage any concerns about quality or safety.
IBM has partnered with companies such as Nestle, Walmart, Tyson Foods, and Unilever to bring this information into the food trust system, which will be ready for pilot testing in 2022. The data collected would provide transparency for consumers and regulators, enabling greater traceability in the event of product recalls. For example, the U.S. Department of Agriculture (USDA) routinely conducts DNA testing to detect horse meat in beef products.
However, their ability to do so depends on what information is available from producers and distributors – who may or may not be honest about their ingredients. Blockchain technology can provide a permanent record that would eliminate this problem and make it easier to track down specific suppliers or food processing facilities that could have been at fault for contaminated products.
Use case of bitcoin as a medium of exchange:
Because bitcoin is a highly secure and transparent payment, it can also be used by people to make transactions in other industries since it is not dependent on a central authority for validation. Blockchain technology is trying to transform the food industry by increasing oversight and transparency.
The technology could be utilized by companies blending the transparency of blockchain with the tokenization of traditional mechanisms such as supply chains, product tracking, food safety, retail environments and even land registration. Ultimately, this would create “policies” that are unique to each industry or place and require at least two parties to complete transactions (i.e., the buyer and seller).
Crop and Food Production:
Agriculture and food production is a huge industry that generates tons of data daily. However, this information is not always accessible to the parties who need access to make informed decisions. Blockchain technology can help organize and store information about products, including crops, agricultural inputs like fertilizer and pesticides, food additives, packaging details and even certifications such as organic food and fair trade goods.
By using sensors on the product and connecting each product with a unique identifier (serial number), companies could add these identifiers to the blockchain ledger to track them through each stage. This way, farmers can track how their products are used and monitor factors like pesticides or fertilizer use. Businesses and manufacturers could also keep tabs on product quality by scanning barcodes and adding the information to a database that anyone can access at any time.
Such a system would provide transparency for both parties, which would alleviate problems with counterfeit items, incentivize people to follow best practices, and drive transparency in areas where this is not currently happening. A good example is food waste – which has enormous implications for market actors, speculators and consumers.
Controlling Weather Crisis:
The weather can have a considerable impact on agricultural output and crop production. As we’ve seen with recent droughts in the U.S., the United Kingdom, and South Africa, drought can significantly impact how successful a season is and how much product is available for use. By storing information about annual rainfall and measuring climate factors, such as temperature, farmers could get insights into future crop yields and plan accordingly.
Being decentralized and not confined to any one country or area also means that this information could be accessed by remote parties who may live in separate geographic regions from where people collected the data. It could provide transparency for communities far removed from where their food is being produced.
Managing Agricultural Finance:
Farmers are typically faced with a wide range of challenges and must navigate financial decisions such as taking out loans, deciding on crop rotations and negotiating prices for their products. These decisions depend not only on the financial state of each farm – but also on regional factors like weather.
Bankers and investors could use blockchain to monitor crops, assess risk levels for each farmer and then provide precise information about lending decisions or investment opportunities. Transparency improves efficiency in lending, which would lower the cost of capital for farmers. In addition, if you have bitcoin, you control your money; no one else does unless you give someone that permission.