Using IoT and Blockchain in Food Production: Get More with Less
28 Mar, 2018
Growing more food with minimal resources while minimizing environmental footprint, catering to the growing world population with maximum customer satisfaction, ensuring transparency across the supply chain, guaranteeing positive income to farmers while tackling the vagaries of the weather—the agricultural sector has a lot of hurdles to overcome while striving to improve profitability in an increasingly unfavorable environment. Judging by the promise digitalization holds, things are not as bad as they seem and growing more with less while meeting demands is not a distant reality.
Blockchain coupled with IoT (the internet of things) is reshaping the food production industry – from farmer to food manufacturer to grocer. From optimizing farming resources like water, fertilizer, and labor to connecting these farmers to prospective buyers, blockchain technology is poised to make farming a sustainable practice. Simplifying a farmer’s life and alleviating the technical difficulties associated with food production, blockchain aims at creating an interconnected ecosystem for food and agricultural industries that allows traceability at each step of food production. Let us explore some of the use cases of blockchain in the food and agriculture industry.
Based on generational learning, farmers used to rely on gut instinct when it comes to irrigation, pest control, fertilization and harvesting. The growing demand for food clearly shows that gut feeling can no longer cut it. Farmers are increasingly turning to precision farming to make farming a profitable venture and at the same time sustainable. Precision agriculture involves remote sensing technology and automatic control to scout fields and customize growing environment for a particular crop. This technique relies on utilizing resources judiciously by using sensors and drones to monitor greenhouse parameters, soil moisture, fertilizer levels, pH, and crop growth.
Water is a scare resource in many locations. Depending on rain water for crops is not enough. But utilizing smart sensors in irrigation systems, farmers can track the quantity of rain. The extra water needed for a healthy crop can be calculated for minimizing extra watering sessions. Famers also monitor and collate important metrics from sensor and drone data like plant health indices, chlorophyll content, soil nitrogen content, weed pressure, and canopy cover mapping to get significant yields from smaller farm area. By storing data points in a blockchain, farmers can benchmark it against the right crop varieties to harvest bumper crops.
In the context of modern farming practice, there’s no better example other than the story of Stara (a manufacturer of sprayers, tractors, planters and agricultural business machines). Leveraging SAP Leonardo, they were able to eliminate downtime on machines bring efficiency, and reduce the burden on environmental footprint, producing a better economic impact on Brazil’s agribusiness that accounts for approximately 25% of its GDP. Cristiano Buss, Stara’s Director of Research & Development, notes, “The Internet of Things (IoT) revolutionized our business model. Previously, we viewed the machines and the farmers as separate entities. Now we can connect machines to machines and people to machines.”
Little do we know that the everyday objects, that form an indispensable part of our lives, travel through a long winding path before they reach us. From manufacturers, distributors, and transporters to retailers their journey becomes an unexplored dimension.
Blockchain can trace the journey of a food product from farm to fork without depending on a single system. It allows quickly storing data in a transparent environment. All ingredients that come together to ‘build’ a particular food product can be shared between all the players in a supply chain.
“In a recall, farmers could quickly match the tainted product to supply chain records. They could more accurately trace where their food went and assess the size and expense of the recall”, says David Schatsky, Senior Manager at Deloitte. When it comes to auditing processes for crop certification, blockchain enables easy tamper-proof documentation and authentication. It allows collection of real-time data linked to a field within a particular area and the total area of land that is being sustainably managed. During crop plantation, the producer can record crop variety, date and other metrics that will form the first block of a particular years’ farming record. Every application of pesticide, herbicide, water and fertilizer together with the volume of area of application and standard practices followed to raise a crop is duly recorded. As every entry is made in real-time, lag time and manual entry is minimized. A producer can easily demonstrate the production compliance with good agricultural practices (GAP).
Food traceability is not a one-way street. Food traceability stands as a litmus test to consumers who demand food safety and quality. Blockchain provides a traceability system that lends information on the origin, manufacturing, selling and final destination of food products. With the aim of increasing customer confidence, Walmart pilot tested with mangoes to see how long it would take to retrace the farm from which it was sourced. Without blockchain it took about a week. With blockchain? A mere two seconds.
Though millennials are presented with a wide variety of products, their purchasing habits are strongly grounded in values. They are likely to gravitate towards brands that manufacture products sustainably and match their deeply-held personal values. Out of 200 millennials surveyed by A.T. Kearney and The NPD Group, 149 preferred product sustainability above everything else. Manufacturers are embracing blockchain technology to ethically source goods.
Starbucks is likely to pilot blockchain technology to show that their beans are responsibly sourced and trace the journey of coffee from bean to cup. Dr. M. Sanjayan, chief executive officer at Conservation International, opines, “The promise of connecting coffee farmers to coffee drinkers is an extraordinary leap in transparency and accountability, and it speaks volumes about Starbucks commitment to creating a product that is good for people and for the planet.” By allowing socially conscious customers to track the provenance of food, blockchain seeks to establish fair trade that eliminates farmer exploitation and negative environmental impact.
Blockchain finds application in food manufacturing, too. To manufacture defect-free products that meet quality standards, auditors must conduct frequent evaluation of all manufacturing process control systems and verify environmental conditions within the plant. Using traditional methods, this is time consuming and susceptible to fudging figures. Not so with blockchain. Blockchain creates an immutable record that prevents tampering by individual members in the network. Photographs and documentation stored with time and location stamps in a blockchain form a digital fingerprint that cannot be counterfeited.
In short, the marketable result is accountability through transparency. The business result is increased profits through higher prices by positioning the product in a class by itself to consumers who care – and spend to prove it.
Digital Farming – The Future
Connected agriculture is sure to become more of a norm than a choice. There’s no doubt that marrying cognitive IoT technologies with blockchain will bring transparency and efficiency in agricultural supply chain more than ever. The farmer of the future will authenticate data collected from the journey from farm to table and separate themselves from the competition.