Of all the presentations at the Primary Industries NZ Summit in Christchurch earlier this month it was a session on blockchain technology that lit up the eyes of Andrew Hoggard more than any other.
The Federated Farmers President has made better data interoperability a mission. Like most farmers he detests having to enter the same farm and production numbers a multitude of times across various platforms that don’t ‘talk’ to each other. With all the compliance and auditing requirements now thrown at farmers, solutions are even more important.
The presenters were Jason Potts, co-director of the Blockchain Innovation Hub at Melbourne’s RMIT University, Trust Alliance NZ Chairman and Potatoes NZ CEO Chris Claridge, and the trust’s membership services director, Samanie Cato.
The trio made an excellent fist of translating complex information into something understandable but Feds Southland Vice-President Bernadette Hunt would by no means have been the only one in the audience whose head was swimming at the end of it. She asked two things:
- Would the solutions they were describing meet the needs of banks, supply companies, councils and myriad others demanding information on whether a farmer was meeting environmental, animal welfare and allied auditing requirements.
- And from a privacy perspective – “and an aspect that freaks us all out a bit” – could farmers decide who gets what information, and that it can’t be shared without their permission?
“The short answer is ‘yes’,” she was told.
Jason Potts kicked things off. He described blockchain, the technology behind crypto-currencies such as Bitcoin, as the third generation of the internet. What we currently have offers all manner of “amazingness”, he said – not least we can send information to anywhere in the world, at next to zero cost. But blockchain enables a digital economy to be built by creating digital scarcity.
“Digital scarcity is a digital object that is mine and when I move it to you, I don’t have it any more. That’s not how the internet works; when I send an email, I still have that email. If you can copy, you don’t have digital scarcity,” Jason said.
The first and obvious use of blockchain was money – or cryptocurrency. The second use involves identity, or more particularly decentralized identity management. Being able to prove who you are exclusively on the internet opens up the ability to capture property registries and property rights, and NFTs (non-fungible tokens – a unit of data on a blockchain that certifies a digital asset to be unique and therefore not interchangeable).
Why is this important to farmers and others? “You produce three things,” Jason told Summit participants, “food, fibre and facts. Facts are the things that are all the information relating to the stuff you’ve produced.
“At the moment, you regard them as just a cost, a hassle. It’s the data, the compliance, and the other things needed to prove this is yours – it’s this quality, it’s this big….just a whole lot of information that then moves with the thing and creates value.”
As well as food and fibre moving through the supply chain – producer, processor, transporter, marketer, etc – data moves with it that verifies quality, verifies ownership, verifies what environmental and other standards have been met.
“Anywhere from a third to half of the value produced is managing and dealing with facts – ownership, identity, quality, provenance, all the descriptions and stories, the regulatory compliance. The longer the supply chain, the higher the cost in verifying and auditing that information.”
We tend to economise on the costs of all this by just bundling stuff into big cells, and everyone gets the full price, Jason said. But anyone in the high quality production businesses – “and I’m meaning New Zealand agriculture, and Australia’s too” – can use blockchain to capture the value of that special provenance and other data.
“At the moment you’re getting none of that value of that information and all of the cost.”
Chris Claridge said Trust Alliance NZ was born at the very first Primary Industries Summit in 2019.
“A presenter asked the audience if any of us had experience with blockchain. I put my hand up and there was only one other hand raised – and that was Semanie’s [now the trust’s membership services director].”
Chris said the trust they launched soon after has since built up a consortium of more than 35 organisations representing all the agencies along the primary sector supply chain. Via these representatives, they’re confident they can digitally connect to every farm in New Zealand.
“What we are able to do is enable farmers, processors, exporters and everyone who interacts in the primary sector supply chain to capture, protect and share data. We can start to solve the problems of simplifying administration, data input compliance and enable the owners of the data to share by permission their data.”
The trust has four objectives:
- Enhance sustainable farming by providing better decision-making tools to farmers
- Provide consumers with improved information to verify product quality and provenance
- Increase efficiency and productivity across the value chain by better measurement and reporting, and
- To mitigate risk for all stakeholders by controlled transparency in the supply chain.
“In summary, you’ll be able to capture the data once, share the data when required in a permitted way and turn compliance into value.
“We’ve heard loud and clear from farmers in the last two years that duplication of information requirements and poorly designed forms are a real pain point for the sector. What we aim to do is simplify that sharing of information so farmers and growers can do what they do best – supplying world-class food and fibre to the rest of the world.”
Semanie Cato said secure digital identity needed to be at the start of this process, and remain to the fore.
“There are 40,000 farmers in New Zealand and each of those farms have to enter the same base credentials multiple times every day.”
The requirement for everyone to have Farm Environment Plans by 2025, and ongoing ‘social licence to farm’ pressures, “are going to make things even more admin heavy for farmers and growers.
“So how cool would it be if we could give our farmers their own ‘filing cabinet’ or ‘digital wallet’ to store all of their information – a place where they’re in charge of their own identity and new data, where they can capture and enter the data once, protect that data, and share it when, where and to whom (they deem appropriate).”
All three speakers said there was plenty of work still to be done on the concept but the Trust has been working closely with the likes of Federated Farmers, Farm IQ, Silver Fern Farms and many others. The government was developing legislation due for release later this year around digital identities, and the creation of distribution of identities by accredited providers (and Trust Alliance NZ aims to be one of those providers).
Chris was asked how much this would cost farmers.
“Based on some of the models internationally, we don’t believe there should be charges to farmers,” he replied. “The technology is not particularly costly. But what it does mean is that current providers of services to farmers need to co-operate and work collaboratively, and not create siloes of data from which they perceive some business advantage.”
What about all those farmers who still have patchy digital connectivity?
“Fair question, but you just have to start,” Chris said. “We can’t wait for every farm to be connected. If we did, we’d never get anywhere.
“So, you just have to start and hope that governments or companies will allow that connectivity to occur. Yes, it’s a barrier but it’s not a rationale not to move forward.”
Sure – but is it secure?
Is data on blockchain secure? “Phenomenally,” Jason Potts insisted. And after laughter from a comment that the Waikato DHB needed it had died down, he went further – “it’s the most secure thing that has ever been invented by humans”.
The Bitcoin blockchain has never been hacked, for example. The prize for anyone who succeeded was around a trillion dollars, but it hadn’t been breached. “It’s been battle tested over and over again.”
But while the blockchain itself is seen as impregnable, there are concerns with the ‘on ramps and off ramps’ – “the point where you’re dealing with the old [internet] economy, where there are still a lot of problems with identity management”. Efforts are ongoing to improve this.
Jason said it was also important to understand the difference between a web 3 blockchain type solution and web 2 large corporate solutions.
“In the world we’re currently dealing with, large amounts of data, identities and government data is stored in big data siloes or with big companies. We put up security numbers, passwords and all sort of things to stop people getting into those huge siloes of data.”
Blockchain is the opposite of that. It’s basically little packets of data that are peer to peer shared over the internet. The data is never in one place; there’s never a big honey-pot. That’s the nature of blockchain and distributed ledger technology; it’s a ledger, it’s distributed everywhere.