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How Big Data and Blockchain Are Changing the World of Agricultural Commodities

· Blockchain,Agriculture,Agrarian Economy

How Big Data and Blockchain Are Changing the World of Agricultural Commodities

From smart fridges to the digitalization of factories, IoT, Big Data, and blockchain have revolutionized the way we shop, work, and plan for our future. Now, as we struggle through the coronavirus pandemic, these three technologies are poised to revolutionize the agricultural commodities markets in fascinating ways.

How could better decision-making based on technology impact the prices of many agricultural products as well as the trading of futures and other financial instruments?

Problems and Solutions in Agricultural Commodities  IoT, Big Data, and blockchain provide real-time data, predictive analytics. provenance, and traceability, all of which are critical in agricultural commodities markets. 
As big data entrepreneur Sara Menker explains, agriculture is more complex than natural gas or crude oil. For one, the latter are specific products. They are consolidated, heavily regulated, and related data is easily available and transparent. 
Here are a few ways that supply chains and risk are being re-shaped.
Big Data for More Resilient Supply Chains

Big Data involves analyzing massive amounts of data to uncover hidden trends and insights. The use of Big Data has helped companies better understand their customers and predict consumer behavior. It has even made it easier for doctors to make more accurate diagnoses.

It could also have a significant impact on our food supply chain in the coming years.

Gro Intelligence

Sara Menker is a major player in the Big Data industry. Once a commodities trader, she is now looking at ways to bring data to bear on the problems faced by our food supply chains, which are critical to feeding the world.

Gro Intelligence,

Menker's software platform, analyzes vast amounts of global agricultural data — processing 650 trillion data points each day. All of this data is used with models to create actionable predictions for everyone in the supply chain from farm to table, allowing them to make optimal decisions.

The data span a wide range from agricultural data to commodity prices to trade data. Their models provide outputs on yields and allow key players in the industry to prepare for risks such as floods and other unpredictable events.

Gro Intelligence's data can also be used by investors and manufacturers to determine, for example, future prices.

Blockchain and Supply Chain Monitoring

When many people think of blockchain, cryptocurrency comes to mind. However, blockchain has many applications outside of digital coins.

Blockchain creates a secure, transparent ledger. When used with the agricultural commodities market, this allows participants to reduce food waste and quickly track the origins of ingredients used in food products. It can also be used to prevent fraud such as incorrectly labeled products (e.g., caged chicken being labeled free-range).

Using blockchain, each step in the food supply chain would be verifiable by each market participant — from farmers to the store that sells the final product. Many of these benefits are already coming to fruition.

For example, Australia's Full Profile has launched AgriDigital, a cloud-based management platform that uses smart contract workflows to make it easier to trace agricultural commodities.

The first sale of wheat on a blockchain was executed in 2016 on the AgriDigital platform.

IoT Transportation Optimization 

Transportation, and their associated costs, are a key component of the agricultural supply chain. The cost of transporting wheat, for example, can impact the prices of a variety of products, including flour and bread.

The ability to reduce those costs could have a strong impact. Using IoT and real-time data, businesses can quickly determine the most efficient routes — reducing the cost of fuel, machinery, and allied transportation costs.

RFID (radio frequency identification) technology is making it easier to track and monitor commodities.

For example, an orange juice truck could be monitored to determine if it is maintaining the correct temperature.

This same technology could also help reduce truck downtime by signaling when it is due for maintenance.

The agricultural field has long been viewed as a manual process that requires people to perform much of the labor. And while it’s the most complex of all commodities markets, it’s also the market that has most lagged in terms of technology.

As we've discussed, IoT, Big Data, and blockchain can have, and to some extent already have had, a great impact on the cost of bringing agricultural commodities to market.

Written by the Rebellion Team, Edited by Alexander Fleiss & Samson Qian

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