News by Forbes: Benjamin Pirus
In a movement furthering technological incorporation, the government for the Mexican state of Tamaulipas now supports the incorporation of blockchain technology for the tracking of grain. For the movement, the state will utilize blockchain and Internet of Things (IoT) software provider GrainChain.
Similar to other recent blockchain projects tracing supply chain, the endeavor looks to bring clarity to the to the way grain is tracked from the farm to the kitchen. Tamaulipas Secretary of Rural Development Ariel Longoria Garcia explained to me in an interview:
“The vision of the Tamaulipas government, specifically in the area of rural development, is focused on helping all grain producers by monitoring the warehouses that the grain is stored [in].” Utilizing GrainChain’s software allows for greater transparency.”
Historically, the process for recording grain and its movement through the supply chain has been cumbersome and inefficient, often hosting mistakes along the way. Traditionally, people would need to record data by hand, such as the grain’s weight, its condition, etc., Garcia said. “Everything was done by hand, and that wasn’t very transparent at all,” he explained. “Sometimes that led to special circumstances where the grain producers were pretty much taken advantage of.”
Tamaulipas is utilizing GrainChain’s software for its sorghum, soybean and corn commodities to start with. Garcia noted Tamaulipas ranks the highest in sorghum production for Mexico, which is a key ingredient used in feed for animals. “A lot of people who raise cattle, and other species, depend on sorghum production to get the basis for their feed,” he explained.
GrainChain has received government backing, which provides assistance to those producing grain, as well as those consuming it, Garcia said. He sees the initiative as an important way to help bring technological adoption to processes which have not seen such innovation until now.
“Tamaulipas will be, and is, at the forefront of incorporating new technologies to agriculture and cattle raising in the near and medium-range future,” Garcia included.
Essentially, GrainChain’s software helps to verify the authenticity of the grain, providing clarity on their source, and the data surrounding grain. Similar to how Beefchain uses blockchain to track beef, GrainChain utilizes blockchain technology, in coordination with IoT technology, in order to provide precise tracking, data, transparency and reliability for this commodity during the supply chain, GrainChain CEO Luis Macias explained to me in an interview. GrainChain’s blockchain and IoT technology also make the process faster.
According to Macias, GrainChain’s products “allow for traceability from the field, all the way to the end marketplace.”
He continued to explain,
What we tried to do is provide extreme authenticity of the origins of the grain that you’re buying. We have a series of products that connect to IoT devices and sensor scales and grading devices that garuntee the quality of the grain, and all of that information is inventoried within the blockchain to be able to ensure that nobody can either modify or question where everything has come from.”
GrainChain is running an “initial pilot program” with Tamaulipas, Macias said, which includes grain tracking capabilities, as well as providing in-depth transparency to farmers and other involved parties. He also included the software greatly improves grain settlement times. “The set of tools that they are using are bringing them into the absolute forefront of technology,” he added. “We went from a lot of scales and silo operators writing things by hand and using manual weight scales to bringing them into all digital signatured grading systems that allow for extreme traceability.”
Data authenticity is vital in many aspects of business. Macias noted a history of fear regarding data manipulation across numerous sectors. Data manipulation, unfortunately, can sometimes lead to greater profit, via covering up information, lying about product origin or cutting corners for example. These dishonest activities then can make business more difficult for those trying to play honestly by the rules. Through utilizing blockchain and IoT, GrainChain looks to add transparency and efficiency to the market, solving many of these issues.
Deeper Into GrainChain
Macias explained GrainChain helps quicken the time between when the grain is dropped off at a silo, and when the farmer receives payment for his product. “They [farmers] drop off everything at a silo, and normally it takes quite a bit of time to process the paperwork before the farmer gets paid. Then the silo goes off and sells to the end user,” he said. Due to its blockchain and IoT software, GrainChain has the capability to greatly improve the efficiency of the process.
Providing me with an example of how things worked in the past, Macias explained this particular process starts with someone dropping off the grain. Someone would then weigh the grain, writing associated data on paper. Next, a handheld device would be used to gauge the quality of a sample of the grain, Macias detailed. During this quality check, “there’s quite a few different areas where things can go wrong, whether on purpose or by accident,” he said. Using a manual scale, those involved must read the data and write that data down. This manual reading and entry obviously could lead to errors. Additionally, he explained the mentioned sample might not even be a correct representation of the rest of the grain’s quality or status. That sample is also the basis for the amount the producer gets paid for that batch, he noted. “There could be penalties of up to 50 to 75% of your crop based off that sample.”
The process is quite different now with GrainChain. Macias said,
We digitize the scale. We’re grabbing signatures from the individual scales, and we put in professional grading devices that are all connneted to our system. When that actually comes in, none of that is manually entered. All of that goes straight into the system with signatures that gets written to our system, it gets written to our blockchain, that gets certified that the signatures matched and that everything is correct, and then a grading certificate is issued. That is an automatic situation, so that happens almost instantly. With that grading certificate, settlement can happen.
Going back to past difficulties once again, Macias said people formerly needed to write down information regarding the incoming grain. Then, “they would take you to an accountant’s office, they would enter in that information to excel, they would look for that person’s contract, they would apply it to that person’s contract,” he said. “[There are] three points of manual entry,” he included, also noting the amount of time it takes to complete those processes. Finally, the farmer would receive payment. These tasks sometimes can take as long as seven days. GrainChain is able to significantly cut down on these processes to “almost an instant,” while improving transparency and accuracy.
Macias also included that GrainChain’s system, with manipulation-resistant certificates and the like, could provide trust and a new type of marketplace where buyers and sellers would be able to transact with confidence on the marketplace without formerly knowing each other. The measuring devices and equipment involved in GrainChain’s system are also linked via GrainChain’s IoT.
Moving Forward In Tamaulipas
GrainChain has an entire suite of capabilities, which ultimately look toward providing a marketplace where buyers and sellers can come together to interact. This initial movement for Tamaulipas, however, primarily is for data purposes regarding statistical application, with further incorporation “in the near future,” Garcia mentioned.
According to plans, Tamaulipas will look to implement aspects of GrainChain starting this season, ramping up involvement as time goes on. “This is the first season that they’re implementing the system,” Macias said. “They are starting with the initial traceability and initial farmer settlement, so what we are doing is we are tracking where it is coming from, what the quality is, how much is going in and the initial payments to the actual farmers.”
This same application that Tamaulipas is utilizing has been in play in Texas since September of 2018, Macias told me.