AUSTRALIAN technology company, AgriDigital, has conducted the world’s first live settlement of a physical commodity via blockchain, opening up new opportunities for grain growers.
Also known as distributed ledger or shared ledger technology, blockchain records all transactions for an asset in a new type of database that can be shared with many parties, but never changed or deleted.
Each record, or transaction, is entered into a ‘block’ and as more transactions occur, each block is chained on to the previous and subsequent blocks, forming a full and complete record.
It also allows smart contracts, where the terms of the contract are recorded in computer code and able to auto-execute on the shared ledger.
AgriDigital CEO and co-founder, Emma Watson, who was formerly with the AWB, said blockchain could be used to help farmers get paid in real time.
“Delivering grain and getting paid for it is not the same as buying a coffee at a café. When you order a latte and you get that latte, the barista is not going to accept you paying in another 30 days. He doesn’t know who you are or if you’re good for the payment,” she said.
“The reality is that’s what farmers do when they deliver grain to a silo. They don’t know if they’re going to get paid. We want to create a reality where a farmer’s payments are secure.”
Ms Weston believes blockchain has the potential to make trade more efficient, reduce fraud and make it easier to trace food through the supply chain.
“It creates a perfect audit trail for all parties. When you can absolutely depend upon that data, you can depend on the record of ownership. You don’t have to know or trust each other to do business confidently,” she said.
“We are highly motivated to create a safe ecosystem for farmers to operate in – payment security is a big part of this. Technology has a clear role to play in de-risking farming, reducing financial and operational stress and of course the emotional impacts on farmers, their families and local communities.”
Source: Austrade, https://www.australiaunlimited.com/business/emmaweston