Imagine that you are the supply chain manager of a big retailer that needs to show the sustainability and origin of its fruits and vegetables, considering that Gen Zers want to have transparent information about that as well. You then kick off a private blockchain project where sourcing data from farmers is recorded in a trustless and unhackable way, and that is retrievable in real time from all players (the distributors, operators, farmers themselves, customers and so on). In order to make this information available to end customers, you add a QR code on the products label, that can be scanned via a dApp and that shows the precise origin of the item, with details as specific as the land composition on which it was grown, the exact time and date in which it was planted, and so on. Impressive, right?

Or imagine also the following situation: you are a farmer and you are part of a cooperative, where you contribute with your yearly yield. You have certain voting rights, but it has been some years that your yield has increased and you contribute proportionally more to the cooperative, and get frustrated by this fact. But then the Cooperative changes its governance to a DAO, implementing smart contracts and rewarding yield proportionally and transparently with tokens: you then have the right voting power based on your yield, and are very happy about all this. 

"Andrea, how is all of this possible? How can you solve in minutes problems that the industry today takes weeks if not months to solve?". This sounds more like a fictional script from the Netflix "Black Mirror" series, right? 

But it is not: it is much more real than Black Mirror, and it represents some of the real-world applications of Web3 technologies to the agribusiness sector.

Let's go step by step.

First of all, what is Web3? Well, Web3 is considered by many the 3rd iteration of the internet, towards which we are approaching thanks to its underlying new technologies: blockchain, Metaverse, DAOs, digital twins, crypto, dApps (decentralized Apps), NFTs, all powered by A.I. and ML (Machine Learning), and so on: basically, a a new generation of Internet services that are built on top of decentralized technologies.

How did we get here, though? Let's look at the evolution of the Web: Web 1.0 came with the birth of the Internet and fundamentally digitized information, submitting knowledge to the power of algorithms (this phase came to be dominated by Google) and making it read-only for the most part. Web 2.0 came with social media, running mostly on Smartphones, and digitized people and subjected human behavior and relationships to the power of algorithms (this phase was dominated by Facebook), and made the internet not only a place to consume content, but also to create it. 

What about Web3? This third phase will fundamentally digitize the rest of the world and render it in 3D. In Web3, all objects and places will be replicable and readable by machines and subject to the power of algorithms. 

Recent statistics show the opportunity for companies to dive deep into the Web3, as the expectation for the market is to grow steadily: The global Web 3.0 market size reached USD 3.2 Billion in 2021 and is expected to register a CAGR of 43.7% up until reaching USD 81.5 Billion in 2030, according to a latest analysis by Emergen Research. 

As per some of its underlying technologies, such as the metaverse, the opportunity is very big as well: for instance, a new report by research firm Gartner predicts that by 2026, 25% of people will spend at least one hour per day in the metaverse for work, shopping, education, social and/or entertainment. It’s also expected that 30% of the organizations in the world will have products and services ready for the metaverse by 2026.

When it comes to blockchain, although the financial sector accounts for more than 30% of the complete market value of the technology (a market value that is poised to reach $ 67.4 billions by 2026, according to Markets and Markets), the value of the ecosystem has also begun to spread to other technologies, such as manufacturing (17.6%), distribution and services, (14.6%) and the public sector (4.2%). 

The truth is that, although in agriculture we might not be there yet when it comes to Web3 maturity, we see a strong acceleration of Digital Transformation in the sector. As a keynote speaker and researcher that works with most agro companies globally (including Syngenta, Corteva, Bayer, BASF, Cargill and many others), I am fully aware of the impact that Digitalization is having on the agro industry, especially after Covid-19: agriculture connectivity can unlock more than 500 billions in GDP by 2030, especially across cereal and grains, fruits and vegetables, but also livestock. At the same time, the addressable market for precision farming by 2025 is enormous: 2.4 billions USD for precision irrigation, 2.3 billions for field monitoring, and 1.9 billions for precision spraying. The impact is clear.

But if we can agree that Digital transformation is underway at the moment (and accelerated by Covid-19), we still have to admit that - besides some timid but much-needed experiments and pilot projects - the agribusiness industry is not very clear yet about the potential impacts and opportunities of Web3 on its business, from improving transparency in food supply chains, to microfinancing for the unbanked, from blockchain-powered carbon markets, to the metaverse for indoor farming simulations - eventually helping to do what the industry aims for since its inception: better feed the world, while taking care of the environment. 

This is why I have spent the last several weeks talking to experts from the biggest agribusiness companies across the globe, and have put together this article that describes what are the main impacts of Web3 technologies on the agro industry.  

1. Blockchain for more transparent food supply chains

Food supply chains have become exceptionally long and convoluted. Tracing the origins of products is incredibly difficult for retailers, let alone consumers. Blockchain, however, is able to record information of any product from field to plate.

With the help of smart sensors and artificial intelligence (AI) technology, it is possible to trace back the origins of a salad leaf to its exact location, and see whether it has been treated with fertilizer, when it has been picked, packed, transported and more. Walmart has been working on adding transparency to the decentralized food supply ecosystems on blockchain for a number of years, and other big retailers are following its example.

Let's first understand better what the Blockchain technology is: it is basically a distributed database that is shared among the nodes of a computer network, which stores information electronically in digital format. A blockchain collects information together in groups, known as blocks, that hold sets of information and that have certain storage capacities and, when filled, are closed and linked to the previously filled block, forming a chain of data known as the blockchain. All new information that follows that freshly added block is compiled into a newly formed block that will then also be added to the chain once filled, and when it is filled, it is set in stone and becomes a part of this timeline. Each block in the chain is given an exact time stamp when it is added to the chain. See? The blockchain is a distributed ledger technology (DLT), where that database is spread out among several network nodes at various locations, which makes it decentralized. 

And at Walmart, everything started in 2016, when the Vice President of Food Safety in the company, asked his team to trace a package of sliced mangoes to the source.  It took his team 6 days, 18 hours, and 26 minutes. While all the data was there in the system, arriving at the information took a long time. 

After partnering with IBM to create a food traceability system based on the Hyperledger Fabric (a project hosted by the Linux Foundation), Walmart could trace the mangoes stored in its US stores within 2.2 seconds, literally, the speed of thought! 

In August 2017 – Walmart announced a Blockchain partnership with big names in the supply chain industry such as Dole, Kroger, McCormick, Nestlé, Tyson Foods, and Unilever to collaborate and find new applications that could help increase food traceability. 

By September 2018, it was possible for the company to trace over 25 products from as many as five different suppliers-  including mangoes, leafy greens, strawberries, dairy products, meat and poultry, packaged salads, and even baby food. The system was so efficient that one could take a jar of a product or a salad box and trace the ingredients back to the farms from where they were harvested.

Another example? FAO is mainly involved in making sure there’s high-quality data to support transparency, traceability and sustainability claims for every food commodity.

A real-world example of FAO’s work in this area took place in Papua New Guinea. Here, rising global demand for pork presented new export opportunities, but only if farmers could prove the quality of their product. Together with the International Telecommunications Union, FAO worked on a distributed ledger system pilot – based on blockchain – that can track livestock and allow consumers to buy with confidence by verifying the history of the pigs.

Using radio-frequency identification tags and a smartphone app, farmers kept digital records of how they raised their animals – proving the pigs received a diet of sweet potatoes, for example or were administered the proper vaccines. Thanks to this digital history, buyers were assured of the product’s quality, while farmers earned a fairer return on their investment. The system was piloted in Jiwaka, and FAO is exploring the possibility of extending the pilot to other project sites.

See? Especially in a world where the consumer is expecting more and more transparency about the sourcing of the products they consume, blockchain comes in to help with that, among many other benefits. 

2. Metaverse and “digital twins” for precision farming

Forty Chances was the title of a best-selling book published back in 2013. It was written by Howard Buffett—farmer and son of billionaire investor Warren Buffett. The book’s story lines took deep dives into subjects such as world hunger and soil health, but in just two words, the book’s title transmitted the most powerful message of all. Its embedded inference is that typical farmers can expect to have about 40 growing seasons in their lifetimes, giving them just 40 chances to improve on every harvest.

With only 40 or so opportunities, there is bound to be a lot of pent up “what-ifs” left on the kitchen table. But what if there was a way to experience more? What if there was a place where you were not constrained by the Earth’s journey around the sun, the rules of Mother Nature or even time itself. An alternative universe per se.

Well, the metaverse and Digital Twins can help us solve this problem.

"Meta-what?": I am sure this was your reaction to Mark Zuckerberg's recent announcement of Facebook's rebranding to Meta. At least, that was mine. But interestingly enough, now we all talk about the Metaverse thanks to that announcement and although it is not a new idea, we only recently are able to better understand its implications for agribusiness companies, especially for the way they conduct surgeries and interact with patients.

But let's first understand what is the Metaverse: the term was born from the junction of the Greek prefix "meta" (meaning beyond) and "universe", and fundamentally is a virtual and collective shared space, created by the convergence of virtually enhanced physical reality (represented by the "Digital Twins", of which we will talk about), and the virtual space that already permeates the physical world (in particular Augmented Reality, also called AR). Confused?

Think of it this way: today we are basically online when we access the Internet, but with new devices, greater connectivity such as 5G and cutting-edge technologies, we will be online all the time in decentralized, immersive and persistent worlds.

One of the great opportunities that the Metaverse is providing to the  agriculture industry is in the area of indoor farming. According to a research report from MarketsandMarkets, the market value of indoor agricultural technology will reach $24.8 billion in 2026. Already, this segment uses augmented reality to digitize and monitor crop physiology, growth processes and related data. Everything from training to traceability to the customer experience will be wrapped up in the growing market of food that is produced indoors.

farmers have the potential to create an authentic digital replica of their farms—everything down to the pickup truck and the dog.

For example, farmers could see how new farm equipment would boost efficiency before purchasing. Thinking about a new high-speed planter? Have your avatar take it to the field first in the metaverse. 

The metaverse may also give agriculture a way to connect with its city cousins and better tell the story of where our food comes from. There are already QR codes showing up on food packages that can bring the consumer directly to the farm where the primary ingredients were produced—whether that be a corn farm in Illinois or a dairy farm in Wisconsin. Such a virtual experience finally opens the opportunity to bring the farm closer to today’s dinner table and tell our story firsthand.

An example? Bayer has 9 corn harvesting and processing sites in North America, and Bayer’s project called “Shaping Business Strategy and Future Operations Through Virtual Factory”  has created a dynamic digital representation of the equipment, process and product flow characteristics, bill of materials, and operating rules for each of the nine sites. These virtual factories enable Bayer to perform ‘what-if’ analyses for each site.

As the commercial team introduces new seed treatment offerings or new pricing strategies, the business can use the virtual factories to assess the site’s readiness to adapt its operations to deliver those new strategies. The virtual factories can also be leveraged for making capital purchase decisions, creating long-range business plans, identifying new inventions, and improving processes.

This happens through what are called Digital Twins, and just for who is not familiar with the concept yet, a digital twin is, according to IBM's definition, a virtual representation of an object or system, or even person as we saw, that spans its lifecycle, is updated from real-time data, and uses simulation, Machine Learning and reasoning to help decision-making. Imagine a large manufacturing company having digital twins of its equipment: through them, an engineer from his home will be able to solve problems in a factory on another continent through the Metaverse.

3. A.I./ML for “smart farming” 

I would like you to imagine the following scenario: you are the pilot of an airplane, and one day, while in the middle of the flight, one of your engines breaks down. Terrible, right? It happened suddenly, and seemingly nothing would have been able to preview that. 

But the truth is that, yes, it might have likely been possible to preview it if the airplane was filled with sensors that capture data in real time, and through A.I., it would be able to anticipate an engine stopping through correlations and simulations based on the Big Data it collects (pretty much like a Tesla is able to do, differently from most cars).

The power of Big Data is processed by Artificial Intelligence. By definition its computer systems are able to perform tasks and solve problems that normally require human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages, among others. It helps us to predict more and react blindly less. Consider that we already live in a world with lots and lots of data, where more than 90% of the data generated since the beginning of humanity was generated in the last decade, and where today we got to the point of 97 Zettabytes of data by the end of 2022 according to Statista (which just to give you an idea, a Zettabyte is a number with 12 zeros…that's a lot of data!). 

So how can Big Data and A.I. impact the agriculture sector?  The truth is that, together with IoT, they give rise to a new concept called “ Smart Farming”.

Smart farming means the use of various technologies, including UAVs, Artificial Intelligence, machine learning, robotics, and IoT, to monitor farming operations, reduce human labor and boost the quality and quantity of farm produce.

It’s the integration of modern ICT (information and communication technologies) into agriculture to optimize and streamline crops and livestock production.

Today, their several technologies farmers can leverage to manage their farms, including:

Location systems like GPS and Geographical Information Systems (GIS) and Satellite Imagery

Sensors for monitoring humidity, water levels, Soil Ph, Sunshine, and temperature

Agriculture specific software that merges agronomy and cybernetic to make farm management hassle-free

Communication via Cellular IoT solutions and Low-power wide-area networks (LPWANs)

Data Analysis systems that provide farmers real-time data on crop and animal health

These technologies provide farmers with full control of the activities in their farms. They also help them make informed decisions that will benefit their crops and livestock.

Smart farming is dependent on Internet of Things (IoT). IoT binds all these technologies together, creating a data-based system that farmers can depend on to manage their farms. The best part is they can do all of this via their smartphone or tablets. They don’t have to travel to their farms regularly. 

Through smart agriculture, farm owners can collect and analyze data to identify problems with their crops. Using the analyzed information, they can decide the best way forward to address the challenges. Whether it’s low levels of water or depletion of essential nutrients, they will know what to do.

The end goal of smart agriculture is to increase crop yield while reducing the cost of production. It also supports the efficient use of resources, ranging from human labor to fertilizer and energy to water consumption.

A company that is working very much towards the advancement of Smart Farming is John Deere, the leading producer of tractor and farming equipment, with which I worked together in their annual LATAM dealership convention in Miami, in November 2022: they are becoming more and more an analytics company, providing farmers with actionable insights: In the last 12 months, data from 230 million acres of farmland in 100 countries has been uploaded over cellular networks to the John Deere Operations Centre, the firm’s cloud compute platform and data dashboard.

And the power of such data is enormous, especially if processed by A.I.: Crop yield prediction is difficult because many factors come into play, like environment and genotype. We can only attain accurate yield prediction after understanding how these factors influence crop yields. That’s where artificial intelligence comes in.

By feeding machines with the right datasets, it’s possible to predict crop yield. AI systems can use historical crop yield data and compare with recent data, and over time, accurately determine crop yield.

Accurate yield prediction will allow growers to make data-driven decisions about farm management, and let’s not forget about their finances.

4. DAOs for better cooperation in the field

Do you know how a cooperative works? I do a lot of speaking to cooperatives in Brazil, especially in the finance and agro sectors, and I have always been amazed by the way they are able to be more customer-centric and collaborative, because of their "ownership" structure - that, to explain as briefly as possible, is basically a model in which the organization is "owned" by its customers. 

This definitely makes accountability much more important, makes the division of profits more egalitarian, and as I mentioned before it makes the organization more customer-focused (as the cooperates, namely the customers-owners, make decisions about the cooperative strategy during regular meetings).

And while traditional cooperativism was born in 1844 in England, we now see a new form of cooperativism on the rise through Web3: namely the one brought about by DAOs, or Decentralized Autonomous Organizations. 

What are DAOs, to start off? A DAO is a new kind of organizational structure, built with blockchain technology, that is often described as a sort of crypto co-op. In their purest form, DAOs are groups that form for a common purpose, like investing in start-ups, managing a stablecoin or buying a bunch of NFTs. ConsenSys, a blockchain organization, defines DAOs as “governing bodies that oversee the allocation of resources tied to the projects they are associated with and are also tasked with ensuring the long term success of the project they support”. Once it’s formed, a DAO is run by its members, often through the use of crypto tokens. These tokens often come with certain rights attached, such as the ability to manage a common treasury or vote on certain decisions.

And how can DAOs make an impact in agriculture? Well, the actual market model currently is that there is an intermediary in between the market and the farmers which finally design how much they buy the product and how much they sell it to the market and who to sell it, thus farmers most of the time get less amount of money and market receive a more expensive untrusted product that is not sure where they come from. DAOs can help us with that.

Imagine a cooperative platform, empowered by Blockchain and smart contracts: Farmers first need to register in the cooperative platform then they will be set up by a wallet and they get the membership to vote for their representatives which uses utility tokens 1 FMP (Farmer Power Token) to vote, they could perform their transaction on the network with asset tokens which these asset tokens are backed by real agricultural product for instance 1 FMP is equal to 1kg of potato. Through the platform, they receive the data on market demand and what the market needs do they focus on those products more.On the other side of the structure, there are suppliers who are responsible for transportation, packaging, selling, and storage. They are individuals who have one or more of these services. As of the city intervention, the spare spaces are going to be filled with agricultural products and new selling hubs would be opened like open area markets. The suppliers also connect with supermarkets to sell their products with the certificates that cooperative platforms give them. This way every individual with one of the services that they could provide will have a job. And finally, a cooperative platform sets them an individual wallet for them to receive their commissions and payments in asset tokens of the actual FMP asset tokens. In phase 2 there will be an e-Contract, namely s Smart contract, set by cooperative platform for farmers and suppliers, and the percentage of revenue that goes to suppliers going to be kept into the safe up until the service done to assure the quality of service. As highlighted earlier they get paid by asset tokens which are backed by agricultural products.  The market also could pay through the network and it also kept it safe to assure the quality of the product in the city. After all the assurance of the quality of service and quality of products happen, the safe will unlock the tokens for the payments. The certification for the farmers and suppliers and their score will happen in the cooperative platform where they vote for suppliers and farmers.

This is very powerful!

Up to today, I have not yet seen any concrete example of DAO in agribusiness, but please ping me in case you do! I am very confident that DAOs can enhance cooperatives - which are already big and powerful, but not always have efficient processes. DAOs can solve much of these problems. 

5. NFTs for Sustainable Agriculture infrastructure

Who hasn't heard of the NFT buzzword lately? It is basically impossible not to have been impacted by this term, which for the most part is related to "digital art"- "Andrea, what does this have to do with agribusiness?". 

Well, to start off we have to understand what are NFTs, or Non-fungible Tokens, in order to understand that their applications go much beyond only art and gaming, and are not only the speculative bubble that we are seeing now.  

What are NFTs, exactly? NFTs can be thought of as a signature for digital assets, which rely on blockchain technology to prove authenticity through a ledger. By confirming authenticity, NFTs establish ownership of one-of-a-kind online assets which can range from a simple pixelated image to a complex set of data, making it impossible to duplicate without permission (to clarify, this means that a set of data can be imitated, but the original is always clearly identifiable: for instance you'd be able to read Jack Dorsey's first Tweet on Twitter all over the internet, but the original one has been auctioned for $ 2.9 millions and is owned by crypto entrepreneur Sina Estavi. Identifying where data comes from and verifying its validity is a key pillar of the industry today, making it likely that it will continue to be a major topic of interest going forward.

Contrary to the wide draw of NFTs as investments, the applications of NFTs in agribusiness are not meant to inherently just generate profit. 

See? Using an Ethereum (or any blockchain) based non-fungible token (NFT) to incentivize sustainable agriculture practices is an interesting thought experiment. A simple system is built on 3 tenets is fun to think through:

• Buyers want access to a variety of sustainable agriculture practices
• Producers want freedom of choice to manage their farms
• Validators leverage there existing authority: Identity or value

The validators in this scenario drive the value of this system so it may be easier to understand from a worked example. On the identity validator side, in most sovereign nations all actors are generally already known (producers, land utilisation, land owners). In America, they are known by the United States Department of Agriculture (USDA), mostly for taxation purposes. They are already implicitly acting as validators, although not in a transparent manner. However, we can harness this attribute and leverage it by combining it with other unique attributes only known to producers and the USDA to create an Ethereum wallet.

The value validators act as technical authorities. Institutions like ICROA and Verra can quantify via physical methods or remote sensed methods. The burgeoning remote sensing technologies will be crucial for scaling these methods. The future state would all 100% code-based open-sourced algorithms taking raw data from instruments and transforming them into human readable attributes. The value is derived from both the quantitative attribute as well as which technical validator is signing the metric. It is entirely plausible the market will ascertain which metrics have the most value and which signers are most trusted. This gives an implicit incentive to validators to be accurate and trustworthy–a key feature of aligning the interests of the system.

The buyers have the most technically simplest path. They browse the year-acre NFTs from some marketplace for any attributes that align with their interests. Unlike most traditional implementations of NFTs this far, there is no picture and the value is derived by the attributes signed by ‘trusted’ validators. In the example below, this NFT is assigned a unique ID/key that would ideally be consistent across years and has a valid physical real-world location that is valid for a calendar year. From the attributes assigned by ‘trusted’ validators we can infer this parcel of land was used to grow corn and seemingly had a cover crop on it (rye). Other, quantitative attributes can be assigned, ranging from water buffer strips to help water quality, various soil health metrics, and greenhouse gas emission/sequestration.

The producers in this scenario have the next simplest path. They can create their wallet and any acres under their control and accept bids on their NFT acres (if any exist) or place asks if they have a different pricing model. Both the identity validators (government agency most likely) and value validators act independently of the producer but provide a key service of ensuring the producer is who they say they are. Producers are not locked into a contract and can act in their best interests for both business and sustainability decision. Deals can be brokered by producers to ensure producers maximize what buyers are seeking, but this is not required. The producers also have the least friction in this context, as they can simply change practices and let the system pick up on its value.

How does the money flow in this system? All three components are key and the system breaks down without a single one, so validators would need to be compensated to incentivize truthfulness and accuracy. Perhaps there is a built in fee (10%?) for the total transaction that is sent to validators for each transaction involving a NFT with their signature. A penalty system (in addition to real world reputation cost) would have to be thought be ensure validators are not blindly signing acres to maximize revenue.

The framework above is not truly 100% decentralized and relies on existing, ‘old-guard’ regulatory bodies but I don’t think this is a necessarily a bad thing. It is entirely plausible to envision a mostly autonomous value validator and a non-sovereign state DAO entity assuming the role of the identity validator. Those system can be built in time, but for the time being it would be prudent to harness and leverage existing infrastructure. After all, the technical solutions are only intermediaries to solving real, physical problems: incentivizing sustainable practices in agriculture production where producers, owners, society, and the environment ultimately win.

The above framework works better from a societal point of view. It is currently en vogue for corporations to be environmentally friendly, reduce carbon footprints, increase sustainability, etc. It’s buzzword soup. This system can provide accountability. How many acres and/or what practices have you purchased, and for what price? Having a blockchain compatible way to verify all these claims keeps the entire ecosystem healthy. Corporations or any entities wanting to increase agriculture sustainability can adapt this system and point out everything is verified: who, what, when, where. The beauty of this framework is its flexibility from agroforestry, traditional row crop farming, and aquaculture.

An example? A Wyoming cattleman recently started a four-person shop called CattleProof to help fellow ranchers create NFTs for their cows (the same guy also founded BeefChain, which aims to help ranchers sell blockchain-validated meat — call him a crypto bull). Here’s how CattleProof makes it easier to track and sell cattle:

• Connected cows: Ranchers attach sensors to their cows and upload their bovines’ data (like: weight, birthplace, birthday). Then they mint NFTs with that info on the ethereum blockchain.
• Digital records: Many ranchers still use paper records, which can be lost or altered. But CattleProof NFTs can’t be edited: when cows are sold, they’ll have “driver’s licenses” with accurate digital info about their origins and medical histories.