Powering Innovation in the Agri-Food Supply Chain
“Any enterprise CEO really ought to be able to ask a question that involves connecting data across the organisation, be able to run a company effectively, and especially to be able to respond to unexpected events. Most organisations are missing this ability to connect all the data together.”
Early Days - Web 1.0
It was 1997, I was studying for my masters programme at the Indian Institute of Technology (IIT), Kharagpur. Those days, I got into writing web pages. The web pages were handcrafted in HTML using an editor like vi and then files copied over to the institute’s web server using File Transfer Protocol (FTP). These were passive, read-only, static pages, i.e., any changes to the content were done by modifying the HTML files directly.
Those were also the days of AltaVista, Netscape Navigator, a text based browser (yes, you heard it right!) called Lynx and an email client called Pine. Those were the days of Web 1.0, the first stage of the evolution of the WWW.
Then came Web 2.0, the era of dynamic web pages (a read, write interactive web) which is the second stage of the WWW evolution. The tech industry was just coming out of the dot com bubble and heady years of browser wars. The world of social media was emerging and this time around I was studying for my PhD programme at Loughborough University, UK.
I remember writing a dynamic website for the International Students Association and a couple of other web applications - one was for our departmental research group to order groceries for the shared kitchen and split expenses. It was the time PHP and MySQL ruled the web and LAMP stack was a de facto standard of a dynamic website. New web applications like Blogging, Social Networking, RSS feeds, and a whole host of user interactivity tools were being launched.
We were getting used to remembering user logins/passwords for multiple sites, using shopping sites like Amazon, eBay and Google was becoming a part of our daily life. The launch of smartphones and mobile apps in 2007 truly accelerated the Web 2.0 adoption making the internet a massive app store. Crucially, we also learnt how to interoperate across different web applications using Application Programming Interfaces (APIs). Web 2.0 is powered by the advances in mobile, social and cloud technology.
However, Web 2.0 also took us to a centralised computing infrastructure model where few large tech companies control the power and have an ability to monetise the personal data at a massive scale.
While the Web 2.0 wave continues, we are now being ushered into the third generation of internet services called Web 3.0 (or Web3) or an Intelligent Web. Initially, Web 3.0 was thought to be a Semantic Web, a term coined by Sir Tim Berners-Lee. Although, Semantic Web did not take off, Web 3.0 takes us to a more autonomous, intelligent, and open internet as originally envisioned by Sir Tim.
Web 3.0 is about decentralisation, peer-to-peer networks, edge computing, semantic web, connected devices, and Machine Learning (ML)/Artificial Intelligence (AI). Deloitte calls Web 3.0 as a Spatial Web. I believe, it will undo the big centralisation of computing infrastructure and the data which happened in Web 2.0.
Dr Gavin Wood, Founder of Web3 Foundation and the Director of Parity Technologies defines Web 3.0 neatly in a few points as below. I recommend you see his conference presentation on “The Journey to Web3” .
Web3 is an extensible framework for creating massively multi-user, economically strong applications - extensible overarching software framework in which software can run and interact with other pieces of software allowing large number of users to join in. These economically strong applications will allow users to transact value or create agreements between them.
Web3 is a reliable, robust means of helping your applications to stay useful in adverse conditions - adverse conditions could be technological, environmental, or political conditions in which the application still does something when the conditions deteriorate.
Web3 helps you prove yourself, your identity, your intention - for example, in an economic interaction between two users we trust the central authority with the trust certificates, HTTPS and take that the data as legitimate. This is a one directional, centralised way of doing things which will change in Web 3.0.
Web3 is open, extensible and future-proof - it is not a closed shop, it is an open group of protocols which will allow developers to pick and choose the lower level of development tools.
Web3 is a new way of architecting web applications - as a human being, we naturally think in a centralised way. Web 3.0 is a way of taking tools and solving problems in a decentralised way.
Web3 helps remove the divide between users and service providers - in the current model of web, we have two different groups of people, the one who provides the service and the other who consumes the service and pays for it. In Web 3.0, there is no such distinction. The users become service providers and the service providers become users. The value capture will happen through a clear, agile and a bi-directional incentivisation frameworks, delivering an efficient and inclusive service market. A good example of this is Brave browser.
The Web 3.0 Stack
Thus, the building blocks of Web 3.0 are Distributed Ledger Technologies (DLT) like Blockchain, distributed data infrastructure, edge computing, artificial intelligence/machine learning (AI/ML), further augmented by advanced networking (5G), geolocation technologies, Internet of Things (IoT) and sensors.
Web3 will help us operate in an open, trustless and permissionless networks.
Open: built from open source software, built by an open and accessible community of developers and executed in full view of the world;
Trustless: meaning the network itself allows participants to interact publicly or privately without a trusted third party; and
Permissionless: meaning both users and suppliers, can participate without authorisation from a governing body.
“The ultimate outcome of these new open, trustless and permissionless networks is the possibility to coordinate & incentivise the long tail of work, service, data and content providers that are the disenfranchised backdrop to many of the worlds most acute challenges such as health, food, finance and sustainability.”
How Will Web 3.0 Impact Innovation in Agri-Food Supply Chain?
My previous article describes the agri-food supply chain and the data challenges it faces. To summarise, there are a number of actors in the supply chain - farmers or growers, agri-input manufacturers/suppliers, aggregators/intermediaries, retailers/food processors and consumers in the supply chain. Farmers are at the upstream end of the supply chain who produce the food and consumers are at the downstream end who consume the food either directly in a fresh form or in a processed form.
The simplified version of the supply chain is as below:
The Web3 stack can be a big enabler for:
Breaking the siloed data in the supply chain;
Extracting insights from the data and delivering it to the relevant users in the supply chain.
Below are some of the specific Web3 technologies that will drive innovation in the agri-food sector:
Decentralised data networks and distributed computing: 1Point5 team have been working on different aspects of the agricultural software for eight years now and network connectivity and questions on data ownership remains a challenge in both developed and emerging economies. Data I/O from the farms, packhouses, and remote hardware devices remains a bottleneck. I am particularly excited about distributed data/computing architecture using blockchains and decentralised applications (dApps) running on the blockchain. For example, Dfinity’s Internet Computer, a distributed public computing network and a smart contracts infrastructure will be game changing. This will re-define the way we build web applications. Today’s complex web stack will potentially be replaced with the Internet Computer. Most importantly, it will allow blazingly fast apps to be deployed closer to the user and let them not degrade the way they do in the centralised architecture. In addition to this, farmers can be a part of the data economy by trading their data. What if an aggregator/retailer buys a tonne of Potatoes and all of the data associated with that tonne of Potatoes by paying a separate price for it?
InterPlanetary File System (IPFS): IPFS is a distributed system for storing and accessing files, websites, applications, and data (check IPFS 101). IPFS has a decentralised data model that allows aggregation, synchronisation, and distribution of massive amounts of data. Its content-addressed architecture provides verifiability of the data. This is a perfect use case for storing, moving, analysing and decision making using large satellite imageries and weather datasets.
Smart contracts: Smart contract is a piece of code which runs on a blockchain (decentralised and distributed) when pre-determined conditions are met. These transactions are automatically run without any human involvement. Further, they are transparent, trackable and irreversible. This can be used for crop insurance payouts - for example, the smart contract could have rules based on temperature, rainfall, wind speed etc and when certain conditions are met, the payout could be triggered automatically to the grower. The same can happen when the produce or commodity is delivered. The intake Quality Control (QC) checks can log the quality parameters of the produce, the total weight and based on that the payment can be triggered automatically using smart contracts.
Non-Fungible Tokens (NFTs): When I heard of NFT first, I thought this is another fad. However, after researching and thinking on it, I don’t think it is. Basically, non-fungible means something unique, something you can’t replicate or replace it with another. And a token is something which has a value. In short, this is a digital asset which is unique and not interchangeable. A field or a plot where a particular crop is grown in a particular season is unique. Let’s say if that crop was Grape then the punnet of grapes packed from a particular field is unique - grown in that field (unique), harvested at a certain time, transported by a certain truck/ship etc. So each field and/or punnet of grape can have a digital twin, a.k.a., a NFT which is attached to it - the only one in the entire world. This way the traceability and provenance is full proof. Most importantly if this was a combinable crop like Wheat or Oats, traceability becomes difficult as the grains are co-mingled in the final product. This problem can be addressed by creating a “synthetic NFT”. For example, a synthetic NFT constructed from the Wheat which came from two different fields which in turn have their own NFT.
And some of the key areas where these technologies will be used:
Digital identity: creating a digital identity for growers, farms and fields with data privacy and control with growers.
Payments and financing: agri-food supply chain is a multi-trillion industry and currently payments are often decoupled from the delivery of the produce or a commodity, often taking weeks to arrive. This could be changed by real-time payments using smart contracts. The transaction costs will be lower as well. In a same way, trade financing options in both developed and emerging economies will improve through some of the innovations happening in decentralised finance (DeFi) and also in centralised finance (CeFi) space like open banking API. I also think the launch of Central Bank Digital Currencies (CBDC) will accelerate that innovation further.
Crop insurance using smart contracts: as mentioned above, parametric crop insurance with automated pay-offs when certain conditions are met will transform the crop insurance and insurance markets in general.
Traceability using NFTs: NFTs will allow to create unique tokens attached to a farm, field and/or even a particular tree in an orchard or a particular livestock. Retailers, consumers demand traceability of the produce and through the smart use of NFTs this can be provided for fresh produce, combinable commodity as well as livestock.
Sustainability, net zero, carbon footprint dashboards: There is no question that we need to change the way we grow the food and the way we supply it to the end consumers. This means we have to move to regenerative farming, make farms more biodiverse, learn to look after soils, optimise agri-inputs, and make the growers all over the world financially independent by providing them access to knowledges, skills and education. This also means that the data needs to be captured, measured and the supply chains are monitored. The distributed ledger technology will allow to capture the data in a tamperproof environment and provide full validity and visibility of such data. This will allow supply chain players to create and share the sustainability and carbon footprint dashboards in an impartial way. This information will be readily available to consumers by simply scanning the QR code or a bar code on the product or the fresh produce pack.
At 1Point5, we believe tomorrow’s food supply chains have to be efficient, transparent and sustainable. Web 3.0 technologies will play a crucial role in building the digital infrastructure to support this vision and make the supply chains more resilient.
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