Opportunities and challenges of blockchain for agri-food

What are the most recent developments in the realm of blockchain applications? What opportunities and challenges does the technology present to the agri-food sector in the Netherlands? And what would help blockchain applications grow and accelerate? Wageningen University & Research takes a realistic look at the current landscape, best practices and key problems, and considers how blockchain could be scaled up in future.

Blockchain is essentially an information technology for the exchange of data and information between different parties. 

Opportunities

From a strategic and policymaking perspective, blockchain is relevant to agri-food in terms of:

• Transparency in sustainability and contribution to climate objectives and circular agriculture (monitoring of KPIs in sustainability, emissions, soil/water/air conditions, preventing and combating fraud in areas such as fertiliser transport)
• Traceability for food safety and value chain optimisation (prompt recalls in emergencies, reduction of food waste)
• Information for consumers (origin and quality of food, fair prices for food products, health, climate impact and contribution to climate objectives)
• The position of farmers and revenue models in the data economy (access to data infrastructures, governance, regulations on data exchange)

Challenges

The key challenges in the application of blockchain for agri-food are:

• Dealing with the complexity and governance of the technology: It’s often unclear what exactly people understand blockchain to be, as there are different types of blockchain and different aspects of blockchain applications.
• Getting past the chicken-and-egg problem: There’s a wide divergence of perceptions and expectations around the advantages of blockchain, and these are difficult to prove unless people are willing to make serious investments in terms of time, money and process change. But without that proof, many people will have trouble committing to blockchain.
• Linking blockchain to existing databases and legacy systems: Farmers and horticulturalists already have a patchwork of digital platforms to deal with. The added value of blockchain isn’t clear.

Towards scale-up

The application of innovative technology opens up an important role for the government to promote initiatives and experiments that contribute to the achievement of societal objectives and to facilitate mutual learning between different experiments. Public-Private Partnerships (PPPs) are also an essential way of ensuring broad application and adoption. This will require a focus on the following issues:

• Encouraging the use of standard messaging (such as e-Lab in the AGF-Chain use case), interfaces between different systems (in particular between RVO, NVWA, CTGB, e-CertNL, and crop registration systems such as CropVision and Dacom Farm Intelligence)
• Reducing certification costs (audit, inspection, data accreditation and validation) for growers and other parties in agri-food chains by using AI for data validation
• Demonstrating how blockchain works (‘playgrounds’) and identifying obstacles for farmers and other parties in their digital transition to the data economy
• Preventing ethical key problems by ensuring strong governance agreements
• Developing an accreditation and validation system for blockchain data (‘Oracle’)

The implementation of blockchain applications goes hand in hand with a range of technological and organisational changes that form an essential part of achieving more transparent and efficient forms of collaboration. As many people have already found, it’s a complex process. However, there are practical steps that we can take to unleash the potential of blockchain for a sustainable agri-food sector. It’s up to all of us to make it happen.

Wur.nl/en