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Is Blockchain the New Autosteer?

November 10, 2023 - Michael Gustafson

The South Dakota Blockchain Institute[1] held its first symposium[2] in Sioux Falls, SD on Thursday, November 2, 2023. Most, if not all, reading this article have heard of blockchain and its association with Bitcoin or cryptocurrencies. To some, just mentioning blockchain can initiate great enthusiasm while others dismiss it with the wave of a hand.

The Board of Directors[3] of the South Dakota Blockchain Institute are some of the leading representatives in the fields of law, education, medicine, and finance in South Dakota. Understandably, so much effort and momentum is being gained to bring some clarity to crypto in the world of finance, but are there other applications for blockchain other than crypto? Healthcare, personal information security, and AI (artificial intelligence) were several fields discussed using blockchain during the symposium, with a mention of food security that caught my attention.

What is blockchain’s value to agriculture and farmland?

If you’re a farmer, think back to 1999 or 2000 when you first heard of autosteer[4] and your young son or daughter told you that autosteer would change farming.  I want to see a raised hand for all of you that waved off your ‘young one’ and said, “That will be the day.” Today, if autosteer is not working, you can admit that “you don’t farm until it’s fixed.”

I doubt that many farmers using autosteer understand the satellite technology that makes autosteer operational. But reading the maps and understanding the variable rate applications has become second nature. Why? Because autosteer made farming a little easier, and more precise, which increased productivity.

It appears that blockchain technology is arriving at the doorstep of agriculture, much like autosteer in 1999, but from a different motivation. With autosteer, the motivation or benefit was to improve a farm’s performance. With blockchain, it appears that it would be required to meet the expectations of consumers, such as ‘farm to fork’ requirements.

For example, companies such as IBM have developed IBM Food Trust[5] on blockchain to provide “…a collaborative network of growers, processors, wholesalers, distributors, manufacturers, retailers, and others, enhancing visibility and accountability across the food supply chain[6].” What types of problems will systems like IBM Food Trust solve? For one, it could address data requirements for the Food Safety Modernization Act (FSMA)[7] for those that will fall under its mandates.

What is a blockchain?

Simply put, a blockchain is a shared electronic database or ledger. Pieces of data are stored in data structures known as blocks, and each network node has a replica of the entire database.[8] For example, paper documents that show proof of ownership, a land title for example. Another potential example is the complete history of all the components that were fed to a steer and the processing steps it took to reach a consumer’s dinner plate. This information could be contained in an electronic format of a blockchain, called a digital asset, and can track changes in the immutable ledger and be shared between multiple people and organizations. If this sounds a little farfetched… think satellite imagery and autosteer in 1999.

Will blockchain be as pervasive as autosteer?

Maybe, but you probably won’t know the product as blockchain, as the ‘product’ will contain blockchain as the technology ingredient that makes the ‘product’ desirable. One of the phrases heard several times during the symposium was that adoption could be “gradual, then sudden.”

Starbucks for example, with their new rewards card promises “…members the ability to earn and buy digital collectible stamps (NFTs) that will unlock access to new, immersive coffee experiences.” Blockchain is the technology behind the new rewards card, but people will be talking about the card’s benefits, not blockchain.

What are the Pros and Cons of Blockchain?[9]

The potential future of blockchain in agriculture

Regulations on the federal, state, and county levels would certainly require change and adjustment to incorporate a blockchain model. In farmland real estate, think about the history and real estate law surrounding the "bundle of rights." [9] Introducing a blockchain format into farmland real estate to replace paper documents would require a reevaluation at every level. With that, it will take time and a purpose for the change.

The purpose could be driven by consumers and federal regulations, such as the previously mentioned FSMA. If the federal government drives the requirement for open and shared information regarding our food and where it comes from, to a detailed level, all kinds of creative solutions using blockchain would likely be developed. But it may not stop there, what if the requirement of ‘where food comes from’ includes the land from where grain is grown, for example? And what if all farmland sales transactions were required to be open and shared electronically instead of using the current paper documents? The purpose of change using blockchain would be the driver and the time for the change would be dictated by regulations. But that is just one imagined scenario, it’s almost guaranteed that the ‘blockchain go-to-market’ in agriculture and farmland real estate would be multifaceted.

What can we do to prepare?

Autosteer and its follow-on farm applications have become second nature in agriculture. I don’t believe farmers attended classes to learn about satellites before they implemented autosteer, but they did educate themselves on mapping and precision agriculture to bring the associated benefits to their operation. Similarly, farmers, land brokers, appraisers, land managers, and county assessors probably won’t be attending classes on blockchain. But as regulations and consumers push for more clarity regarding food tracking, new applications and procedures using blockchain will be developed that will replace the current ‘way of doing business.’

Change occurs every day in the business of agriculture, sometimes it’s gradual… then sudden. The leaders in South Dakota who created and continue to guide the South Dakota Blockchain Institute are investing their time and efforts for a reason, as they stated during the symposium - “The future is the future.”

Think of the future opportunities for your operation as technology rolls out new approaches, processes, and products. It will take your time, and will certainly require effort to adjust, so stay informed. By the way, your young son and daughter could be a great information source for you regarding blockchain as they are already using digital asset tokens playing their video games!

[1] https://www.southdakotablockchain.com/
[2] https://www.southdakotablockchain.com/2023-fall-symposium
[3] https://www.southdakotablockchain.com/board-of-directors
[4] https://www.ers.usda.gov/webdocs/publications/105894/eib-248_summary.pdf?v=7068.7
[5] https://www.ibm.com/products/supply-chain-intelligence-suite/food-trust?mhsrc=ibmsearch_a&mhq=IBM%20Food%20Trust
[6] Ibid
[7] https://www.fda.gov/food/food-safety-modernization-act-fsma/full-text-food-safety-modernization-act-fsma
[8] https://www.investopedia.com/terms/b/blockchain.asp#citation-37
[9] https://www.investopedia.com/terms/b/blockchain.asp#citation-37