BIXS and Blockchain: The Future of Meat Safety, Tracking and Financial Security?

For the uninitiated, Blockchain is the financial ledger of the future and yet it is a technology that is already here. For many in the agricultural sector, it is still a bit of a mystery. However, it could be the answer to dozens of problems facing agriculture around the world because it allows its users to record financial transactions and follow any supply chain simply and without fear of tampering or hacking

by Scott Taylor – a Canadian Meat Business exclusive

For Monica Hadarits, the Programs and Certification Director for the Canadian Roundtable for Sustainable Beef, Blockchain is definitely on her radar.

Amazingly, it started as a tracking program that served as the backbone to the cryptocurrency Bitcoin. Now, with a growing list of practical uses, it could very well be the way in which we track the supply chain, guarantee that protein products are safe for the consumer and make sure that farmers and ranchers around the world are being honestly paid for the products they are providing.

Of course, here in Canada, it’s already in use.

“Blockchain is certainly gaining momentum and appears to be a promising solution for traceability in agriculture,” said Hadarits, in an email interview with Canadian Meat Business. “The CRSB’s Certified Sustainable Beef Framework is outcome-based and therefore we have set requirements for traceability and chain of custody, but have not prescribed a specific platform to be used.

“(But) the CRSB is aware of this emerging technology for use as a traceability solution in agriculture. The CRSB’s Certified Sustainable Beef Framework sets the requirements for traceability (live cattle) and chain of custody (beef post-slaughter). The traceability of live cattle is audited at the primary processor, and then the chain of custody is audited through to the consumer. It is the responsibility of the supply chain to prove they are meeting the CRSB’s outcome-based requirements, so we have not chosen one data solution.”

Deborah Wilson is the Sr. Vice-President of BIXSco Inc. BIXS is currently being used in Cargill’s Canadian Beef Sustainability Acceleration Pilot Project. She is a passionate and enthusiastic promoter of traceability and sustainability in the beef industry and her company is already working with Blockchain technology.

“The Blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value”


– Don and Alex Tapscott, authors, Blockchain Revolution (2016)

 

BIXSco Inc. has been a CRSB member almost since its inception. Wilson herself sat on the Verification Committee as an industry adviser for two years and she’s currently on the Marketing-Communications committee. She is also a new member of the national council for CRSB. Wilson speaks to producers at numerous meetings throughout the year as well as colleges and universities on traceability, sustainability and what it means to processors, retailers, consumers and trade partners.

“I attempt to give producers a basic overarching view of the necessity for audits, and the CRSB, as well as chain of custody tracking,” Wilson explained. “We are also working with Blockchain technology as we move past the point of harvest of live animals.

“In the most basic sense the Beef InfoXchange System (BIXS) currently does what Blockchain does — chain of custody, which once data is entered by a producer cannot be changed by another — while protecting the privacy of the contributors of the data.

“This continues through the animal’s lifetime and on average a beef animal will move three to four times in its life. BIXS relies on its integration with the Canadian Livestock Traceability System (CLTS) to confirm and share data which ensures the veracity of the data, based on producer permissions. CLTS is the tracking system for animal and human health which operates under an MOU with CFIA, while BIXS is the value-added traceability system, not mandatory, but supported by CLTS. CLTS and BIXS have a strong, supportive working relationship.”

The importance of data management in farming and ranching has never been more important that it is today and Wilson is at the forefront of the industry. Wilson says that in Canada, “We are already 10-20 years ahead of the United States when it comes to traceability and sustainability.”

However, without committing to platforms such as BIXS and Blockchain to trace protein from farm to table, Canada could fall behind quickly.

“I correct many individuals, personally and on social media, when they say the beef industry needs to track animals and record what we do with them,” said Wilson. “We can do it and we are doing it, and the momentum from programs like the current Canadian Beef Sustainability Pilot (www.cbsapilot.ca) and the completed McDonald’s Verified Sustainable Beef Pilot, are driving adoption in the cattle industry. BIXS tracked chain of custody for the first pilot and is one of the organizations that created the second pilot.

“But what we need is more encouragement for the producers. Mt passion is to create an industry with a long-term future, but I worry about that. Right now, the United States has virtually no traceability compared to what we have in Canada and federally, we aren’t seeing much interest. But there are States that have reached out to us and I know from experience, that if the Americans get a hold of this, they will leave us in the dust.”

So why is traceability and as a traceability technology, Blockchain, so important to the agricultural industry in general and the beef industry in particular?

According to Bernard Marr, an author and data analyst, in Forbes Magazine, “Blockchain comes with a range of benefits that no other technology has been able to provide the agriculture and business community in the past.”

“Transparency and immutability: As it is a shared database, data are readily available to all parties involved in any kind of transaction, providing maximum transparency. The immutability of data makes it even more trustworthy as well. So, once the data are created, it can’t be deleted or altered.

“Process integrity and disintermediation: The parties in any transaction will know that everything will be done exactly as the agreed upon protocol dictates. Readily available and trustworthy data also eliminate any needed intermediation by a third party.

“Lower costs and faster transaction: Blockchains have a great potential to cut overall transaction cost and time by eliminating the overhead costs of exchanging assets and the involvement of third-party intermediaries. For example, the cost of the financing of invoices, can be reduced by as much as 25 percent because Blockchain reduces risks such as the multiple selling of invoices.

“Access to high-quality data to everyone: All parties involved in a transaction will have accurate, timely, consistent and complete data they need to know to make a well-informed decision.”

Don Close, an animal protein analyst with Rabobank told Bloomberg News that the “Need is there to use Blockchain technology to track the movement of cattle, cattle payment and ownership.

“Overall, there is incredible potential in agricultural commodity sales, both in the U.S. and globally,” Close continued. “They are using Blockchain in wheat merchandising in Australia and a lot of the attention has been given to that development because if it’s successful in wheat trade there, there will be interest to adapt the technology into other agricultural and livestock markets as well.”

In 2011, the United Nations indicated that worldwide, agriculture is the largest financial sector in non-urban areas – 70 per cent. However, it also provides some of the world’s poorest people with their only source of income. According to Bloomberg News, it is also the industry that provides the biggest disconnect between supplier and retailer.

“Using Blockchain, a more direct link can be established, ensuring that farmers receive fair payment for their produce and enabling retailers to verify that they are getting what they’ve paid for,” said Close.

And it’s not as if Blockchain isn’t already being tested in the United States. In fact, Wal-Mart is already trial testing a tech project it developed with IBM to monitor produce in the United States and pork in China. The goal in this case is to improve food safety.

For Wal-Mart and other large merchandising firms, Blockchain can be used to automate all supply-chain certification processes and to protect global supply chains from counterfeiting. Forbes Magazine has also indicated that there are “innovators researching ways in which DNA can be recorded and tagged to an animal, and recorded in the Blockchain.”

“It is information that can easily be made available to end users and customers using mobile phones and apps,” Forbes added.

Dr. Marek Laskowski of York University, the University of Guelph and Seneca College in Ontario, received his Doctorate in Electrical and Computer Engineering from the University of Manitoba in 2011. Together with York University’s Dr. Henry Kim, he wrote a paper entitled Agriculture on the Blockchain: Sustainable Solutions for Food, Farmers, and Financing.

Their paper was updated on Dec. 18, 2017. In it, the two scholars write about food safety and the important role that Blockchains can play in guaranteeing high quality food from farm to plate.

“Food quality is clearly related to chronic illnesses such as heart disease, liver damage, stroke, diabetes and cancer, to name a few,” Kim and Laskowski wrote. “We can significantly reduce chronic illnesses by improving the quality of food available. That requires an answer to the following question: Why do we eat poor quality food? This large problem can be divided in three parts: production, delivery and sale.

“Food production starts at the farm. Farming always implies high risks — natural disaster, harvest failure, accidents, etc. — that directly affect what a farm can offer. Market conditions and large agricultural corporations can also make the lives of small farmers challenging. The companies often abuse their positions by using expensive fertilizers and patented GMO-seeds to gain competitive advantages over smaller operations.

“Another problem is in the logistics of food delivery. Modern agriculture is under the siege of large chains’ producer-distributor-consumer model. Large-scale food producers often organize industrial food production in developing countries. They then create large-scale distribution networks to sell the food globally.

“Producers are often unable to sell their products directly to consumers, having to appeal to traders or distributors who buy their product cheaply. Large companies are able to cheaply mass-produce food and fill the distribution channels, but this food is never completely consumed. The result is the creation of a new problem: food waste and disposal. Resources like fuel and fertilizers are used to produce and distribute food that will never be consumed, creating waste.

“Fortunately, health, eating, farming, agriculture and logistics are interconnected, and we can solve these challenges through modern technologies, utilizing experts who understand the systems. Blockchain technologies offer good financial instruments to provide farmers a timely and complete payment for their efforts. Using these technologies will help to avoid risk and make the farmer’s life easier.

“This means Blockchain technologies must be simple to understand and use. A number of startups have been working in this space. One such company has developed an entire platform to make Blockchain use simpler for farmers.”

Back here in Canada, traceability is and has been an important part of the nation’s supply chain. It could be said that it’s the fastest growing aspect of the Canadian Roundtable for Sustainable Beef.

“The CRSB will be providing background on sharing the certification status of a beef operation, as data sharing is required to participate in a beef supply chain that is sourcing product from certified operations,” said Hadarits. “However, this is not required for a producer or process to become certified.

“The CRSB has hired NSF International to serve as the third party Oversight Body of the framework. CRSB and NSF International will work together to complete different data management functions (e.g. compiling data being reported by certification bodies). However, neither will take on the role of traceability tracking.

“There will be many things to learn over the next year. We are moving into the implementation phase, which includes raising awareness of the framework, training auditors, accepting certification bodies, providing interpretation guidance, and supporting supply chain participation.”

In the meantime, technologies like BIXS and its relationship with Blockchain continue to expand.

As Forbes points out, “At its heart, a Blockchain is simply a digital ledger.” According to its creators (2008), an anonymous single person or group of people calling itself Satoshi Nakamoto, “Blockchain is a decentralized database that records transactions of almost any type and enforces contracts related to them automatically, based on conditions defined by the participants. The transaction history is appended to the chain rather than tracked via a paper trail. Because the system is distributed and encrypted, it’s difficult to tamper with or hack.”

It is the future of economics, of supply chain tracking, of food safety and of fair and honest transactions. And thanks to passionate people like Deborah Wilson, it’s already a big part of Canadian beef production.