The agricultural industry is increasingly starting to use blockchain. The four largest corporations, Archer Daniels Midland, Bunge, Cargill, and Louis Dreyfus, announced plans to standardize international supplies of agricultural products. Agrocorporations plan to use the distributed ledger technology (DLT) and development in the field of artificial intelligence for the global sale of grain.
At the first stage, the companies plan to focus on automating the processes after the sale of grain and oil, which are currently mostly manual and are an expensive part of the supply chain. Also, new technologies will help reduce the number of emails needed to complete the transaction. Agricultural corporations are confident that the entire industry will benefit from the transfer of paper processes to digital rails.
Ultimately, agricultural companies integrate distributed registry technology at various levels of the supply chain, including delivery, storage, and customer service. Representatives of corporations are confident that farmers are waiting for innovations that will help them in their work.
“Agriculture has always been a technology industry. Farmers and our customers expect us to deliver innovations that make them more efficient, effective and profitable. We embrace this as an opportunity to better serve the industry and ignite innovation through new products, processes and partnerships”, said David MacLennan, Cargill’s Chairman and CEO.
It is worth noting that this is not the first experience of agricultural corporations in interaction with DLT. Louis Dreyfus announced that it has successfully tested a blockchain-based transaction system developed by a group of financial institutions. Testing was conducted on soybeans. According to the companies that participated in the experiment, testing included shipping soybeans from the United States to China with all the relevant documentation, including a sales contract and a letter of credit, on the platform.
“In January this year, LDC completed the first agricultural commodity transaction through blockchain, which showed the technology’s capacity to generate efficiencies and reduce the time usually spent on manual document and data processing. By working with the industry to adopt standardized data and processes, we can truly harness the full potential of emerging technologies to improve global trade”, said Ian McIntosh, LDC’s CEO.
In May, HSBC and ING banks conducted a trade financial operation for the agro-industrial giant Cargill using a single blockchain system. Then the participants in the process stated that they were the first in the world to carry out such an operation. The deal was to export a shipment of soybeans from Argentina to Malaysia, during which Cargill Geneva sold the goods on behalf of its Argentine subsidiary, and Cargill Singapore received it on behalf of the Malaysian branch of the company. The transaction was carried out using a letter of credit on the Corda platform from R3.
The German software maker SAP and the Swiss blockchain startup Modum plan to use distributed registry technology in supply chain management in the agricultural sector. As part of the Farm-to-Consumer initiative supported by companies such as Johnsonville, Naturipe Farms, and Maple Leaf, SAP is developing pilot blockchain solutions to eliminate numerous stages in the interaction between different enterprises in order to establish automatic trust between the parties.
It is worth noting that tracking and payment of product delivery is one of the key problems of the agricultural industry. Increasingly, projects and companies are beginning to use the distributed register technology to solve this problem. Blockchain allows you to simplify a large chain to a single distributed registry. Buyers can contact the supplier directly and transfer funds instantly. It also simplifies and speeds up the work with documents.
Consumers will also benefit from the use of the blockchain in the agricultural business. With the help of a distributed register technology, manufacturers can enter product data in a special register. In the future, the buyer has the opportunity to check the history of the product right in the store and make sure that it is of good quality and origin.
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