INTRO: Welcome to Organics Unpacked, a podcast for the business-minded organic grower, where we hear from top experts in the commercial organic industry. With a focus on the business elements of organic growing both in and out of the field, you will gain insight and grow your operation. This show is brought to you by Avé Organics, a Wilbur-Ellis company. Here’s our host, Tom Buman.

Blockchain Technology & Sustainability

TOM: Back with me today is Henry Ines, CEO of Chainparency. Henry, I know that you’ve been working with a lot of companies on blockchain and making progress, but there’s one that I wanted to really focus on today. I wanted to talk about sustainability. Since we talk about organic farming on this podcast, I wanted to bring something that you’re doing to life that is around sustainability. And one of those is around wood products. Tell us a little bit about this project. And what I really want to do is give the listeners ideas of how they could take Chainparency, the blockchain system, or any blockchain system and then use it for their products.

HENRY: We’ve had a great opportunity to be able to work with all sorts of different customers across different industries and sectors. But one of our really great customers is a real champion in transparency, and that’s the company Enviva. So Enviva is a New York Stock Exchange publicly-listed company. And they’re the world’s largest producer of industrial wood pellets, which, essentially, is a coal alternative. Very important for Enviva is that they have a very strict process for maintaining responsible supply chains. All of the fiber that goes into these industrial wood pellets have to come from a sustainably-certified tract of land. This is critically important. So they’ve already had a very robust track-and-trace program to ensure that these pellets are coming from these particular forest tracts. But because they’re champions of transparency and, really, leaders in the biomass space, they wanted to take it to the next level. So they basically said, ​‘We’re going to adopt blockchain technology.’ And after having an opportunity to take a look at the available products and solution providers out there, fortunately, they connected with us. And today, they’ve been advancing it through multiple pilot stages but deploying our GoTrace track-and-traceability solution throughout forest tracts in the United States.

Blockchain in Organic Farming

TOM: The reason I love this example is that it mirrors organic farmers so much, people that are producing grain or vegetables/​fruits under an organic-certified system. So they’ve got their certification down, much like what you said in the forestry certification program. So it makes sense that if we can do this with forestry products and track those through the system, we ought to be able to do it with organic grains and vegetables and fruits.

HENRY: Absolutely. On the organic farming side, there’s so much recordkeeping and audit trail that’s required for that, down to the lot number and what’s being harvested and parsing out between conventional and organic harvests. So, when you have all these opportunities to capture and record this data to withstand any audit and organic certification process, that’s a critically important time where you need to have this kind of high-fidelity data, right? Real-time accessible data that’s secure and reliable and fault-resistant. And that’s something that we’re very good at. We can basically help companies to record this high-fidelity data on a public blockchain ledger that becomes the single source of truth for any certification process or, really, validating any claims that they’re making in the marketplace. So, for Enviva, when they say that all this fiber is coming from a sustainably-certified tract of land, that’s really critically important for all the consumers who are purchasing their industrial wood pellets. Obviously, it’s a coal alternative, so they have to make sure that this is the right kind of fiber. These are low-value fiber. Think about typically discarded limbs that fall. You can’t be just cutting down trees, right? These have to be sustainably-harvested fiber. And they have to come from these particular tracts of land. So, through using blockchain technology, real-time GPS events tracking latitude/​longitude coordinates all from a geo-fenced area, this really becomes the basis for the truth that you’re making around the claims that are being made to validate the kind of fiber they’re using.

How the Blockchain System Works

TOM: So give me a nut-and-bolt, step-by-step process of how this works, starting at the forest. Again, we want to make this so we can parallel organic products, but we’re starting at that forest that’s been certified for certain practices. Walk us through how the blockchain system works all the way to the end of the retailer that is selling those wood pellets or wherever they’re going.

HENRY: So, really, we’re talking fiber here. But, really, let’s just take a step back and talk about any product that’s being tracked and traced through a supply chain. And this will depend on what the product is, but every product will have to be tagged or labeled on some level, right? So, when we talk about global supply chains, maybe we’re talking about a QR code. Maybe it’s a GS1 barcode. It could be an RFID tag. It could be anything that enables a unique way to identify some particular asset. And for us, we’re sort of agnostic to how you do it, but we will work with our customers to understand how they tag and identify particular assets. From there, we can then, essentially, create a digital twin of that on the blockchain. So, if it’s fiber, maybe you start out by tracking and tracing particular trailers or trucks that are going into a geo-fenced area at a particular time. And you can have data around the pounds or the tonnage of fiber that’s going into these trucks. And that becomes the basis for measuring the movement of that fiber as it’s going through the supply chain. If you’re talking about a farm, maybe you’re talking about a pallet or a container that is uniquely identified or labeled that contains produce or whatever it is. And that, then, gets placed into a truck, which is also uniquely identified. And as that truck is moving through the supply chain from point A to point B, you’ll see all of that, all of that granularity, the timestamps, the latitude/​longitude coordinates, GPS pings at the minimum. These events will be recorded on a blockchain and, of course, a chain of custody and the unique digital identities associated with all the assets. So this is just an example, but this is something that we typically deal with, as I mentioned, for any kind of product globally across all different types of industries and sectors. So you need some sort of unique digital identity. That identity becomes a basis for the particular asset that you’re tracking. Then all the data collection along the way, we learn what kind of sensors are being used. Is it a manual scan? Is it a passive IoT/NFC-type data collection? All these things can be incorporated into a digital track and trace. It just depends on the supply chain that’s being utilized to move these products.

Making Supply Chain Recommendations

TOM: But you can help customers walk through that if they call up and say, ​‘I don’t get how blockchain technology fits into my world.’ That’s something that you’re there to help them talk through, right?

HENRY: Right. We try very hard to preserve and maintain the existing supply chain operations. We certainly don’t want to add any additional layer of work, unnecessary amount of work, to the supply chain. But yeah, we would look at the supply chain. We would certainly make some recommendations. Especially because if you’re making a particular claim, let’s say in the case of organic, you have to do so much to make sure there’s no cross-contamination and commingling of these assets. Beyond the technology, we would look at the supply chain to make recommendations because, obviously, you might need to silo or compartmentalize how somebody’s assets are being handled as they move through the supply chain. So we certainly would be there to make technical advice on technical elements for traceability. But just also, as the particular assets move through the supply chain, we may make some recommendations to ensure that there is this integrity of the assets as they are moving through the supply chain and the track-and-trace operations.

Using Blockchain to Prove Organic Claims

TOM: Every once in a while, you read an article about a farmer that was caught selling products that said they were organically certified, but they weren’t. Just recently, there was an article, and it was a very large scam. So, if people are trying to work around that and have real integrity in what they’re doing, blockchain would be a solution for that kind of chain of custody and tracking it through the supply chain to make sure that what they said was happening was actually happening.

HENRY: Absolutely. In cases like that, it’s so unfortunate because of all the hard work that the farmers are already doing to make these kinds of claims, the sacrifices and the cost that they’re incurring. So, when people cheat the system, obviously, that’s really unfortunate. So using digital applications to include blockchain-based applications 100 percent is an excellent way to be able to capture that data for the audit trail that’s required for claims around being organic or any other compliance requirements that you may have. Blockchain is excellent for that.

TOM: Well, Henry, thanks for helping us think through blockchain in organic farming. It’s been another great episode, and I look forward to having you back.

HENRY: Yeah, thanks again, Tom. Really, really enjoyed it.

OUTRO: Thank you for listening to Organics Unpacked. If you enjoyed this episode, please consider subscribing and giving this show a five-star rating and review, so we can continue to help organic growers improve their operations.