With the 6.4% of the entire world’s economic production and the overall worldwide production being over the impressive amount of $5’000 billion, agriculture is a sector that will unlikely stop growing and that has caught attention lately due to its unmet potential that the sector has, given the level of technology we have reached today. If we consider that China and India together sum up to more that 25% of the overall production and that are considered to be emerging markets (meaning that they are investing more than average to increase their total production) we can definitely suspect that something in the industry will change really soon.
Farms nowadays are equipped with old equipment and farmers often have complicated ecosystem with seasonal financing structures, they have to keep up with timing and a lot of investments to produce high quality food. After foods leave the farm, it is suddenly pushed forward in the supply chain through a series of intermediaries that most consumers are unaware of. The question is: is there a technology that is able to fill this gap and could potentially, if applied correctly, bring additional value and bring to the surface unmet potential?
Now imagine a world where:
(1) sensors capture information on the temperature of the soil, water level, true weather condition, fertilizer details and as soon as something is not in the normal level, there is a system that automatically triggers an action (called smart contracts) to bring back to normality. This would maximize the harvest and would certainly speed up and ease farming procedures.
(2) customers, regulators and every other participant in the supply chain of food could retrieve the same information but no one have the ability to tamper the data already there. Customer no longer has to put their trust into big brands or certificate in order to be sure that what he/she is buying is effectively healthy and safe food. Moreover, the same customer can make sure that specific procedures/local laws (e.g: DOCG, DOP, etc..) are followed and that is not paying more for nothing. Tracing food can be done in a matter of seconds despite the number of intermediaries involved. These are some of the reasons why the usage of blockchain is so prominent in this sector. Such procedures though are not easy to implement: every intermediary involved in the supply chain must agree in taking part to this process of storing immutable data, which most of the cases is produced by interconnected sensors (IoT: Internet of Things) that store information online. You can understand that this process requires huge investments from third-parties involved in the transaction. This unfortunately is one of the main reasons why many companies that are involved in the supplement process are reluctant to integrate this technology in their business model. Other being the very little understanding these companies have on such technology.
Despite that, some supermarkets are already testing if this solution could indeed: (1) increase customer satisfaction, (2) attract new customers and (3) boost revenues.
Coop and Carrefour have already signed agreements with their suppliers to onboard this technology. The former is tracking eggs with its “CoopChain” solution, while the latter its launching solutions to track meat, milk and fruit from farms to the store to increase the shopper trust. If such big players are adopting this solution, we can expect that sooner or later, other major competitors will follow and extend its usage for solutions that we cannot even imagine today.