Imagine you’re a cattle farmer with $200 to your name. The electric bill is past due, and your herd will certainly freeze without heat. Are you going to spend that $200 to keep the lights on, or would you invest in a technology that will only achieve its full potential at some point in the unknown future?
Farmers routinely face some variation of this scenario, and they overwhelmingly choose to pay the bills. The lack of industry-wide funding is a massive roadblock to blockchain adoption in agriculture.
So is the regulatory environment around cryptocurrencies. Digital currencies could be a standard unit of exchange in agriculture, but it won’t happen until regulators clarify their legal status.
Farmers also lack education about blockchain’s benefits. Many don’t totally understand its potential to raise crop yields, help manage inventory, and organize operating systems. Until the education issue is addressed, blockchain technology will seem an unjustified cost.
Here’s what experts have to say about the primary challenges to blockchain adoption in agriculture.
1. Emma Weston, CEO and CO-founder of AgriDigital
“A significant challenge [revolves] around regulation. As we’ve seen recently, cryptocurrencies have experienced wide fluctuations, with many unsure of their stability as a transactional tool. Furthermore, there is no single widely accepted or fully backed currency that can enable worldwide transactions yet.”
2. Michelle Klieger , Founder and President of Stratagerm Consulting
First, the global agriculture supply chain is long and complicated. There are millions of small and medium-sized farms globally. To provide the traceability and safety that blockchain promises, each one of these farms would need to be connected to the agriculture blockchain system.
Second, these farms and other agriculture operations cannot afford the costs to adopt this technology, even if the technology brings benefits to them.”
3. Carlos Iborra, CEO of FruitsApp
“From our point of view, and seeing those markets that we touch more closely, the main challenge we perceive in Europe is that the regulation of the use of blockchain between companies in this continent will not be easy, nor will it be fast.
All entities, both public and private, must be aligned so that their application is effective and efficient.
We have recently seen the president of France, Emmanuel Macron, officially requesting the application of blockchain technology for the agricultural sector. Now we must wait to see if its European partners support the initiative, so that the European continent will be able to counteract global competition against China, Russia and the United States, with a common agricultural policy of innovation.”
4. Daniel Pigeon, Technical Writer at Komodo
“Right now, businesses are reluctant to implement blockchain solutions because they don't quite understand the technology yet. There's a lot of coverage about crypto scams, 51 percent attacks, and hacks of centralized crypto exchanges, so people are afraid to get involved. On top of that, the prices of cryptocurrencies can be volatile, which some business leaders may fear would negatively impact their business model and, ultimately, their bottom line. But what many people don't realize is that using blockchain technology doesn't have to be related to cryptocurrency — they can be decoupled. Plus, there are now security solutions that make blockchain more secure than ever before.”
5. Braden Perry, Ag Business and Blockchain Attorney at Kennyhertz Perry
It seems as if every federal regulatory agency has chimed in on cyber issues, but none have taken the lead. The IRS has classified virtual currency as property, and the Commodities Futures Trading Commission (CFTC) has said they are commodities. The SEC has implemented a securities structure surrounding initial coin offerings (ICOs), and no agency has labeled virtual currency as an actual currency.
Until the regulatory structure is clear, many companies will be hesitant to use the technology to innovate their business processes.”
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