U.S. Government Believes Blockchains Will Play 'Essential Role' In Agriculture

A farmer holds a handful of beautiful red tomatoes
Credit: valentinrussanov for Getty Images

By Landon Manning

A division of the U.S. Department of Agriculture claimed this month that it envisions distributed ledger technology becoming integral to the functioning of complex agricultural supply chains in the future.

This claim was printed in the Federal Register, the official journal of the United States federal government. The specific article in question was written by the Agricultural Marketing Service (AMS), an agency within the Department of Agriculture. The AMS “will continue to work toward its goal of full supply chain traceability and fully verifiable organic products,” it claimed, and that the “AMS expects electronic tracking systems, including digital ledger technology, will play an essential role in supply chain traceability.” 

While acknowledging that implementation of these technologies will be an involved process, this report lauded multiple advantages of integrating blockchain technology into the food distribution networks within the United States, not the least of which were the instant, transparent, secure and verifiable aspects inherent to the platform. 

However, the AMS said it was critically important that blockchain “can also protect confidential business information and trade secret information by automatically restricting sensitive information to authorized entities.” 

Further, the report said that, although there will be difficulties in turning case studies into industry standards, “the utility of electronic tracking in food systems has been demonstrated by several successful, high-profile pilot programs.”

The scale of these pilot programs has been wide across food supply chains, both with large companies like Walmart and Nestle using IBM blockchain technology to track products in their existing intra-company networks, and independent firms like GrainChain receiving significant investment to piece together a blockchain infrastructure out of several disparate parts of the produce life cycle. 

If the federal government sees the advent of widespread agricultural blockchain usage as inevitable, it has its work cut out for it as to what it can do to actively foster this development. For starters, there has been little regulatory consistency in the status and use of blockchains at the state and federal levels, and a more robust framework could help even before trying to establish public/private partnerships in blockchain firms, or wholly state-backed projects.

Of particular note is the contrast between the United States’ relatively relaxed attitude and the Chinese government’s direct involvement with massive infrastructure projects. For instance, the Blockchain Service Network (BSN) is set to develop a base for all manner of blockchain use cases throughout major Chinese cities, as well as internationally, and is led by a mixture of government action and a wide array of private firms. The BSN project has made further progress in August 2020, with an international site being launched on August 10. 

Considering that the United States’ largest geopolitical rival is taking a more active hand in developing the new world of blockchains, the United States may wish to take charge of its own sectors. It is likely, as the Department of Agriculture has claimed, that blockchain technology will be essential: the only question is how it develops into the future.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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