If you have been following any precision ag media or technology news in general, there has been a lot of excitement and interest around blockchain. But what is blockchain? Where did it come from? More importantly, what does it mean to farmers and others in the ag industry? Is blockchain here to solve everyone’s digital problems or will its implementation be slightly less life changing?

First, a quick overview of blockchain. Wikipedia maintains an excellent entry on blockchain, the short version being a sequential distributed database. Breaking this down, a blockchain simply represents encrypted records (database) that are linked together (sequential) and shared with a group (distributed). Everyone in the group has a copy of all the records, and they are stored sequentially; meaning each new record is connected to the previous like the links of a chain. A “block” consists of the encrypted records people want to securely store, a link to the previous block, and the date and time it was created.

This structure makes it nearly impossible to falsify a record once it is in the chain since it would not match the distributed copies of the chain, and each block has a link to the previous one all the way to the original to ensure nothing has been added or removed. If someone does attempt to alter a record, the summary contained in the subsequent block would no longer match, indicating something had been changed. If someone tries to add or remove an entire block everyone in the group has their own copy of the entire chain so it is easy to identify any copy that does not align with the rest of the group.

An important aspect to emphasize is the records in each block are individually encrypted so even though everyone in the group has a copy of the record, they only have access to their record, or link in the chain. A good way to think of it might be that each record is first typed into the modern-day equivalent of the World War II enigma machine to protect the message. A record would appear to be a page of gibberish, but with the proper encryption key you could decode it. In this way people are able to securely store their information and it can only be retrieved by someone with the specific key to their individual record.

Blockchain is gaining a lot of interest in many different industries and applications. The most prevalent implementation has been cryptocurrencies. Bitcoin was the first to really make the technology popular as a form of currency, but Ethereum, Litecoin, Ripple, etc. all are based on blockchain technology. The benefits to these currencies are the security and distributed nature of the database of financial transactions. With there being no one central bank or singular ledger for someone to attempt to access, change, steal or hack all transactions are very secure. There are other more philosophical merits that can be debated but for the purposes of this article, the focus is what does this technology mean to the ag industry?

The predominate area blockchain is being used in agriculture so far is for traceability. This represents a logical application of a database/ledger technology. To enable traceability, the person on the receiving end of a supply chain needs a way to quickly and easily verify what happened to the product throughout the supply chain. Conceivably, a blockchain could record when and where a specific variety of a grain crop was planted, what fertilizers where applied, what crop protection products where used, when the crop was harvested and where in a field each load originated. Additional logistics information about what elevator, what shipping method, which processor and final distribution to the store shelf could also be recorded as additional links in the chain. Obviously, there is still work to be done to enable this vision, but it is not impossible.

High value crops that have more pressing needs for traceability are already doing this. Walmart announced last year they would require all leafy green suppliers to implement their blockchain system. The need for the technology is two-fold, first consumers who are ever more removed from agriculture want to know more about where their food comes from and how it was grown and processed. Implementing blockchain can provide this information to the consumer so they know more about their lettuce in Walmart’s initial implementation.

Second, more from the food safety aspect, is enabling faster and more accurate handling of health issues. Last year saw several outbreaks of E. coli or salmonella, tracking back to the source and determining what products were actually contaminated is time consuming and difficult using current systems. This not only can lead to more people getting sick, but is also very costly resulting in large quantities of product being thrown away simply because it can’t be proven it is unaffected. From Walmart’s research, current, predominately paper record keeping systems, take about seven days to trace through the supply chain. Utilizing blockchain they were able to shorten this to a 2.2-second turnaround. This means food is safer, costs are reduced since product is not thrown away unnecessarily, and consumers get the added benefit of knowing more about where their food originates.

This is all great for fruits and vegetables but what are the implications for the rest of farms that focus on grain, beef, cotton, poultry, or other commodities? This gets a little tougher, when dealing with commodities the issue of “commingling” is likely one of the most obvious hurdles to traceability in general. When a farmer loads a semi and hauls 1,000 bushels of grain to the elevator and dumps it into the 1.2-million-bushel bin, some of the traceability is lost since that load is now mixed with the grain from farms from all across the county. This aspect will likely result in different levels of traceability; consumers or products that want or need to know what field a crop came from would require specialized handling of the crop to preserve the identity of the crop and likely increase costs. For others knowing roughly the county where a crop was grown without major changes to current storage and handling practices might be adequate.

The ADC’s focus is on farm data, and this is one of the issues to be resolved before blockchain can be broadly implemented for traceability as well. Anyone that has been around precision farming knows it is not uncommon to see corn yield maps showing an average yield of 60 bushels. This low yield is not due to any weather or field conditions, but is caused by no one bothering to change the crop type designation on the in-cab monitor to soybeans from corn. Or many precision ag nerds know that the most commonly planted variety is 1, since that is the easiest button to push to get planting when the terminal wants the operator to enter the actual variety loaded into the machine.

There is also the issue of the planter being red, the sprayer green, fertilizer spreader yellow, tractor blue, and the combine silver. Each machine or terminal has its own file format making accessing and sharing a complete record of farm operations within a given field difficult. Groups like AgGateway and their ADAPT Toolkit are really moving the needle on interoperability from the file format standpoint. They are also starting efforts to take the next step and standardize meanings of different data elements. For example, one terminal may contain the crop “corn”, another terminal has “maize”, does that mean the yield map is for grain, silage, or round bales. Now that we are starting to bridge the gap of different data formats and “speaking the same language” we need to make sure we all mean the same thing when we use a term.

But not all issues are technical hurdles for the software developers to work out. There are some things farmers can do today to bring additional value to the data being recorded by their machines. Consumers are pushing food processors to know more about where their food comes from. This is a great opportunity for the agriculture community to highlight all the things done to ensure a quality product, and that it is produced responsibly. As technology improves the access to data, farms should take a leading role in providing this information and connecting to consumers who may not know the difference between a combine and a forage harvester. Making sure that data is accurately recorded and includes the relevant information is a relatively easy first step. This not only would help with creating the accurate data needed to record in a blockchain, but it also helps with operational analysis. It is very difficult to use data to determine what hybrid preforms best in a specific soil type if the variety planted was not accurately recorded.

A crucial first step is to ensure that the machines recording data are not only capturing yield or how much product was applied but exactly what product(s) were applied, what variety was harvested, and ensuring the machine was calibrated to capture accurate data. To learn more about data best practices several members of the ADC contributed to an overview of the pillars of ag data. The video includes many great points farmers should consider to ensure they are not the missing link in the chain connecting the consumer at the grocery store to the origins of their loaf of bread.

Blockchain is really just another tool or technology companies will use to meet consumer demand and improve overall supply chain efficiency. Regardless of the tool used, changes are coming regarding the expectations on how data is collected, stored, and shared throughout the supply chain.