“Agritech” at one time would have meant new equipment such as tractors and combine harvesters, but today it refers to the wave of digital innovation sweeping through agriculture.
So far, that has extended to Big Data, artificial intelligence (AI), and the increasing use of drones to deliver “precision farming.” However, several Australian companies are also working with blockchain in the agricultural context and discovering there could be significant value there too.
There is an increasing recognition that the transactional nature of the distributed ledger in blockchain has strong potential in agriculture.
For many producers, their business is all about sending goods and tracking transactions across multiple remote locations.
Just the job for blockchain and Australian farmers have been at the forefront of early use cases.
Full Profile, a firm based in New South Wales, was the pioneer in December 2016 when it connected its cloud-based transaction system to a private blockchain network to settle a physical commodity purchase.
In that first transaction, a wheat farmer from outback NSW delivered 23 tons of his produce to an exporter, and the blockchain-enabled system settled the payment within minutes of arrival.
Full Profile has created a blockchain platform called AgriDigital, which is still in the pilot phase but is designed to ensure that rural producers get paid in real-time, and not wait for weeks and months as in the past.
The startup is developing commodity management and settlement software using agri-blockchains and smart contracts, as well as exploring other products such as financing and solutions for livestock, wool, rice, cotton and horticultural industries.
AgriDigital works on a variety of devices and enables those at either end of the transaction, buyers, and growers, to create, view and manage delivery and payments.
Conceived and created by farmers, and not technologists, AgriDigital raised AUD 5.5 million in Series A capital this year and is exploring the development of its digital currency for the agricultural market.
“For farmers, the counterparty risks they take on can be reasonably extreme, so we’re looking at ways to remove or mitigate that risk,” Founder Emma Weston said.
"We're coming at it from a problem first space, rather than a tech-first space," she added.
Another Australian startup, BlockGrain, recently raised AUD 3.5 million in startup funding and has launched a public offer to raise another AUD 25 million.
Its solution is about tracking farm produce from the farm to the buyer and minimize waste, using advanced encryption.
The company claims that 30% of the value of bulk commodities is lost due to inefficient supply chains, with the figure at 50% in the development world.
BlockGrain’s focus is on data transparency in the food supply chain, and like AgriDigital it enables farmers to create, manage and track commodity contracts.
The technology may not boost production, but the use cases that are under trial at the moment show that it can drive transparency and efficiency through the supply chain, and ensure prompt payment to rural producers for whom cash flow is often a significant problem.