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Blockchain for agriculture: beyond the hype

May 29, 2018  By Tim Hammerich


Last December, Long Island Iced Tea Corporation announced that they were looking into how they might utilize blockchain in their business practices. As part of this announcement, they changed their name to “Long Blockchain Corp”. Shares of the company rose 200 per cent following this news.

Clearly, the true value of the business did not go up 200 per cent by changing their name and “looking into” blockchain technology. Unfortunately, events like these have led many to believe the idea of blockchain is over-hyped.

Blockchain is the technology behind bitcoin and other cryptocurrencies. It uses cryptography to allow data to be stored on a distributed “ledger” of assets and transactions. It’s kept in multiple places, keeping data distributed throughout a network rather than in one central location to prevent hacking. It’s encrypted and cannot be tampered with. People known as “miners” compete to validate the transaction by solving a complex “math” problem incentivized by a token or cryptocurrency. Only verified transactions are recorded on the ledger.


This shared ledger works not just for currency transactions, but for all assets and transactions from the crop being grown to the final product being purchased at the grocery store. A record of agricultural products, data, and transactions can be shared across platforms in a way that could smooth out inefficiencies in supply chains, protect the integrity of the products, and offer more value to the consumer. It’s the universal source of truth that everyone in the supply chain can trust.

In practice, it might look like this:

Better feedback loops. Through a supply chain recorded on the blockchain, consumers get information on how their products were grown (location, growing practices, etc.) through network-connected sensors and devices known as IoT (internet of things). This speaks directly to the consumer’s growing desire for transparency. Those consumers can then provide feedback based on their more subjective preferences like taste, texture and freshness. This creates a feedback loop between grower and consumer that could before only be captured in a hyper-local transaction on a small scale. One cool startup doing interesting work in this space is

Greater accountability. Who is accountable for product that does not meet standards in terms of quality, safety, and other specifications? There is not always a clear answer. When there are just two parties involved (a buyer and a seller), then it’s fairly straight forward. But what happens once you add in brokers, packers, shippers, warehousers, customs agents, third-party logistics providers, processors and others? The more participants in the mix, the more complicated the issue of accountability becomes. However, if all transactions are recorded on the blockchain, accountability can be tracked and the right parties held responsible. Walmart has been a leader in piloting blockchain technology to establish transparency, safety and ultimately accountability among their vendors.

Decreased transaction costs. One interesting application of blockchain technology is ‘smart contracts’. These are basically “if this then that” statements – clauses that are automatically carried out once certain conditions are met. One example could be, as soon as delivery of a product is verified, then everyone in the supply chain gets paid instantly. This is possible without blockchain, but very difficult to get all participants to put their complete faith in the agreement. With smart contracts, everyone can verify that the funds are available and that the terms of the contract are set so they will get paid for certain when delivery is received. This is just one example of the numerous applications for smart contracts in supply chains. AgriDigital has already commercialized a similar application that is being used in the Australian grain supply chains.

Similar to the early days of the internet, it’s still difficult to predict exactly how this technology will change the way we do business in the future. This technology will most likely operate in the background through network-connected devices, gathering data on all aspects of the growing and shipping process and storing it on the blockchain.

What we do know, is that these are all real problems that could be solved using blockchain technology, and these applications are likely to be around long after the hype has subsided.

Tim Hammerich is the host of the “Future of Agriculture” weekly podcast. He recently completed a 10-episode series on blockchain in agriculture. Learn more at or through your preferred podcast distributor.

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