Research courtesy of the Blockchain Research Institute explores how the blockchain will be the foundational technology of the multi-sided technology platforms of the future. In this case study, a platform that consists of everything from drones to proprietary connected devices for food production can contribute to a strategic pivot to large-scale sustainability practices in the agriculture industry sector. All powered by the blockchain.
Platforms for Sustainable Food Production
Author: Jenessa Mellen
Release Date: January 6, 2022
“Global climate change is destabilizing many of the natural processes that make modern agriculture possible.” – National Geographic
Abstract
This brief shows how blockchain technologies, combined with mobile access to drones, sensors, satellite imagery, artificial intelligence, the Internet of Things, and other innovations, can secure our global food supply, one farm at a time. The solutions it explores focus on topsoil to mitigate the harmful effects of chemicals, aggressive tillage, monocultural crops, and climate change. The goal is to give smallholders—often the poorest farmers with less than two hectares of land in jurisdictions hardest hit by environmental and humanitarian crises—the tools and training they need for sustainable food production, transforming the long-term viability of their businesses and the future of their families in the process.
Description
In this brief, we show how blockchain technologies, combined with artificial intelligence (AI), the Internet of Things (IoT), and other digital innovations, can secure our global food supply, one farm at a time. The solutions we discuss focus on topsoil—mitigating the effects of chemicals, aggressive tillage, monocultural crops, and climate change. The goal is to give farmers the tools and training they need for sustainable food production, transforming the long-term viability of their businesses in the process.
Highlights
- Smallholder farmers are the most vulnerable to climate threats and the least able to cope. With access to digital technologies, they can begin to implement sustainable practices.
- Dimitra is a start-up company that aims to deliver agriculture technology to millions of these farmers worldwide.
- Blockchain technology is an indispensable tool for agriculture. It can transact payments, aggregate seed quality data, monitor crop growth, and track yields from farmer to retailer.
- Farmers accrue Dimitra points within the app and exchange them for agricultural products and services such as agrochemicals, crop insurance, and expert advice.
- Dimitra created an ERC-20 token (DMTR) to drive its farming platform as a circular economy. Liquidity providers stake DMTR tokens to power this economy.
The Future of Farming and Our Food
Family-run farms produce an estimated 70 to 80 percent of the world’s food in terms of value. On average, the poorest of these operate on less than two hectares of land—one hectare of land is roughly the size of a football pitch (i.e., a soccer field). Such smallholders account for 84 percent of all farms globally, grow roughly 29 percent of the world’s crops yielding 32 percent of the world’s food supply, but manage only 24 percent of all agricultural land. Farmers are under constant pressure to achieve a maximum yield to feed their families and make a living. Typically, smallholder farmers reserve much of their own yield for their own subsistence, especially at the start of each season. For example, Nicaraguan smallholders sell nearly half their produce, whereas Nepalese sell only 12 percent. If farmers could increase their yields and sell more throughout the season, they would improve their livelihood as well as their impact on the global food supply.
The Effects of Climate Change
Constancy, predictability, and balance are keys to successful agriculture initiatives over time. Yet, according to National Geographic, “Global climate change is destabilizing many of the natural processes that make modern agriculture possible.”6 Changes in climate that alter seasonal patterns, distress crops or animals, or incubate pests and diseases all increase farming costs. Erratic weather patterns, drier conditions, and an increase in global temperatures have a negative impact on farmers’ crop yields.
The effects of climate change disrupt farms of all sizes at all stages of the production cycle, from seed selection to transportation. These seasonal changes and increased variability are pushing the limits of what farmers can grow and control. They can no longer rely on historical farming data. Instead, they make decisions based on predictions of how climate change will affect their farm. For example, they may need to prepare for flooding or drought events and change their growing methods, crop choices, and agricultural practices. Smallholder farmers in developing countries are the most vulnerable to the climate threat and the least able to cope. Yet, only 1.7 percent of climate finance is set aside for these smallholders. Moreover, of the $50–70 billion spent in low- and middle-income nations each year on agricultural innovation, less than seven percent goes to climate action initiatives.
The Effects of Industrial Agriculture
The drive to feed a fast-growing global population at low cost has led to the use of industrial agriculture, referring to “techno scientific, economic, and political methods” and “food systems … largely dependent on fossil fuels for the production of food by way of machinery and mechanization, agrichemicals, transportation, food processing, food packaging, [and] assimilating waste.”
Industrial agriculture uses aggressive farming practices such as the exhaustive application of fertilizers (e.g., superphosphates), herbicides, and pesticides to maximize yields. The use of these chemicals disrupts natural ecosystems so farmers become dependent on them to maintain maximum yield. Moreover, these chemicals can seep into water supplies and strip away naturally occurring elements in the ground.
Another common practice is tilling. Farmers use tillage to aerate the soil, prepare seedbeds, and suppress weeds, to name a few reasons. However, over time, tilling degrades soil quality, erodes soil further, and damages soil structure.
Also, as people consume more processed food, they create a higher demand for a limited range of crops resulting in monocultural farming practices.
Woman Picking Plant on Field by DoDo Phanthamaly, 2008, used under Pexels license as of 23 Dec. 2021.
The global food system relies on only 12 plants and five animal species to supply 75 percent of the world’s food; such reliance makes this supply highly vulnerable when shortages or disasters occur. Therefore, we must prioritize biodiversity to keep many climate-resilient, heritage varieties and breeds alive. According to the UN Environment Programme, the estimated toll of industrialized agriculture on the environment each year is $3 trillion.
Source of data: OurWorldinData.org/Environmental-Impacts-of- Food, 2021, used under CC BY 4.0.
The Vital Role of Topsoil
Topsoil is the uppermost layer of the earth and is a vital part of our food system. Around 95 percent of the world’s food grows in topsoil because it contains the necessary nutrients and water. Topsoil also stores carbon that would otherwise end up in the atmosphere. However, topsoil is eroding faster than the earth can replenish it.
Every five seconds, the soil equivalent of a soccer field washes away. Water, wind, and industrial agricultural activities are the main drivers of erosion. The Food and Agriculture Organization (FAO) of the United Nations estimated that we will lose 90 percent of the world’s topsoil by 2050.
Soil erosion worsens the effects of climate change. When ecosystems have less soil, they have less resilience in adapting to new weather and rainfall patterns. For example, eroded land often leaves behind dry, hardened soil that does not easily hold water. So, heavy rainfall often results in waterlogging or flooding. Additionally, in monoculture farming, farmers grow only a single crop year after year, depleting the natural resources of the soil. Eroded soils that lack organic matter lower the nutritional value of the food grown. As a result, consumers receive less nutritious food.
To address the vicious cycle of industrial agriculture and climate change on topsoil, the Committee on World Food Security held a side event, “Transforming Agricultural Innovation for People, Nature, and Climate,” during the Glasgow Climate Change Conference in November 2021. The committee summed up the dire state: “Climate change is destabilizing our food systems, destroying our natural resources, widening economic and health inequalities, and shortening food supplies. The climate crisis makes it more difficult to feed a growing global population while protecting our natural world and its resources.” It presented what it called a “ClimateShot,” an agenda to develop and deliver climate-resilient, low-emission agricultural technology (ag-tech) and innovative practices that protect nature and limit climate change.
The Power of Technology in Agriculture
Changes in climate and the loss of topsoil are making farming increasingly challenging. We have the technologies to drive change in agriculture, from drones and distributed ledgers to sensors and satellites. But these technologies are often expensive, complicated, and costly to use, which deter farmers from using them. With access to the Internet and mobile phones, farmers can access and use data to improve their yields and transform their farming practices. What if we put these other innovations into the hands of the farmers who produce most of our food and need help?
Here’s where Dimitra comes in. Dimitra is a global agtech company that works directly with government agencies, nongovernmental organizations (NGOs), for-profit companies, and others to deliver agtech to millions of farmers worldwide. “Every smallholder farmer, regardless of economic status, should be able to benefit from simple, beautiful, and useful technology because when farmers thrive, economies thrive,” said Jon Trask, chief executive officer of Dimitra.
The start-up’s goal is to enhance global food security through sustainable agriculture and engage the current and next generation of farmers. In addition, Dimitra focuses on driving economic development by transforming subsistence farming into profitable, economically viable businesses. It’s developing and combining new technologies to improve standard agricultural practices. For starters, instead of tilling fields, farmers can grow cover crops—that is, close-growing crops like legumes (alfalfa), cereals (wheat, rye), and brassicas (turnip, radish) that protect soil between cycles of normal crop production—to increase the available nutrients.
Seasonal crop rotation can also significantly improve biodiversity and soil quality and reduce chemical fertilizer application. Mutualism is another farming practice that farmers can utilize to increase biodiversity. Farmers can plant complementary crops that naturally provide nutrients to each other.
Technology solutions can help make these decisions and monitor their success. For example, agroecology and crop modeling incorporate machine learning and AI to suggest better management practices that increase biodiversity and, therefore, soil health. Such management practices as rotating crops, planting crop covers, and adding organic fertilizers, biofertilizers, and soil amendments like manure or organic waste, all increase biodiversity and naturally boost the available nutrients within the soil.
Dimitra is currently working on a project to provide two million farms in India access to technology that will help them remove limiting factors on yields and improve soil quality. Soil takes time to renew; it cannot do so overnight. Topsoil forms at a slow rate, between 0.25 to 1.50 millimeters per year, depending on the climate.25 Dimitra delivers information and recommendations to farmers for implementing modern farming practices that will improve their soil quality over time. Dimitra hopes to see farmers adopting more sustainable practices as they increase their output.
Available in 60 countries so far, the Dimitra Connected Farmer platform has numerous functionalities for farmers who run small businesses. With this platform, smallholder farmers can manage their agricultural assets and activities and receive reports and recommendations to make informed decisions on increasing yields, reducing costs, and mitigating risks. The platform incorporates such technologies as mobile, AI, blockchain, and IoT.
Mobile access
Improving how farmers, extension workers, researchers, and policymakers communicate with each other is essential to increasing agricultural productivity. Mobile technology is a convenient and efficient way to share and exchange valuable data and knowledge widely.
Smallholders can benefit from access to better information about pests, diseases, weather conditions, current market prices, and best farming practices, including crop knowledge, livestock information, soil preparation methods, and pest control.
Farmers can download and use many different blockchain-based mobile apps to help improve their farming practices. Through these apps, farmers can encrypt and upload private information such as photos of field conditions, answers to farm surveys, or the number of working hours.
Artificial intelligence
While climate change can cause unexpected losses due to unforeseen weather events, technology can warn farmers early. Farmers can utilize hyperlocal weather predictions that offer farm-specific weather insights and emergency alerts to better prepare for potential weather-related disasters.
Typical historical growing seasons have shifted to be shorter or longer in different areas of the world. Machine learning algorithms coupled with weather data can assist farmers by predicting the ideal planting and harvesting dates.
Machine learning can also be helpful for crop modeling and determining which crops should be planted based on current growing conditions.
AI is a valuable tool for farmers because it can perform predictive analytics; AI allows farmers to collect and process more data. And it can do so faster than would otherwise be possible. Farmers can apply AI to their data to make informed precision agriculture decisions. For example, AI can use historical data to identify areas that produce low yields and recommend how to increase the yield in these areas.
AI can solve important problems for farmers, such as analyzing market demand, predicting prices, and determining the optimal planting and harvesting dates. It can also gather and process data about soil health, recommend fertilizers, monitor weather, and track the preparation of produce for sale.
Blockchain technology
Blockchain technology is an indispensable tool. Members of an agriculture ecosystem can use a blockchain as a shared ledger to register farm assets, record licenses and permits, conduct peer-to-peer transactions, automate contracts, obtain loans and insurance, aggregate seed quality information, monitor crop growth, and track yields after they leave the farm.
Dimitra issued an ERC-20 utility token (DMTR) on Ethereum to power the Dimitra software-as-a-service platform, help fund Dimitra software development, and encourage partner participation. Anyone can view and verify transactions involving DMTR tokens on the Ethereum blockchain as well as search for and trace the entire history of each token via online tools such as Etherscan.io. Thus, DMTR transactions are highly transparent and tamper-proof. With this level of data traceability, transparency, and immutability, participants can build trust with each other and their communities as well as with ecosystem service providers and their governments, all of which are crucial to developing a fair and efficient agricultural economy.
The Dimitra Architecture
Dimitra offers its Connected Farmer software to national and regional governments, which distribute it widely to their farmers. The software is available on Android and iOS devices as well as in an online web version. “When farmers come onboard, they need to register their identity, they need to register their location, and they need to provide us with additional data, such as how much land they own, where their land is located, and where they live,” Trask told Ashton Addison of BlockWest Capital. “We use the security aspects of blockchain to privatize, secure, and encrypt that information.”
The front end of the Dimitra platform captures data on farmers’ daily activities, and the Dimitra back end uses this valuable agricultural information for data analytics and scientific research, powered by AI and machine learning. Dimitra makes its findings and reporting services available to farmers and their governments so that they might increase yields, improve soil health, grow better food faster, reduce ecological damage, and cut costs.
Dimitra designed its points platform to reward farmers for the data they generated in their daily usage of the Dimitra Connected Farmer application. Farmers can then redeem the points they have accumulated to pay for, or reduce the purchase costs of, the services of Dimitra ecosystem partners. In this way, Dimitra lessens the costs of farm operations and fosters a local marketplace that benefits farmers and agricultural service providers in a region.
The Dimitra points platform features a permissioned distributed ledger (points database) with a proof-of-stake consensus algorithm; Dimitra points are the unit of exchange native to the Dimitra partner payment channel and distinct from DMTR tokens. Through this platform, ecosystem participants can transact directly and privately.
Independent and authenticated Dimitra validator nodes collaborate and compete to maintain and secure this peer-to-peer payment channel and to verify the legitimacy of each transaction according to a simple unspent transaction output (UTXO) accounting mechanism.30 The validator nodes stake DMTR tokens for the opportunity to earn DMTR in exchange for their validation services. Participating validators vote on a block of transactions, and the majority vote wins. Validators in the majority receive a portion of the reward, whereas those in the minority receive nothing and lose their stake (aka slashing).31 This staking mechanism motivates validators to participate in good faith.
To improve transaction throughput and reduce costs on Ethereum, Dimitra periodically aggregates verified Dimitra points transactions in a rollup, which it cryptographically hashes and commits to the Ethereum blockchain. Transactions processed thusly determine the points balance of each Dimitra account.
Partners may choose to on-ramp or off-ramp their Dimitra points to Dimitra’s gateway exchange so that they can financially interact with ERC-20 tokens and other smart contracts on Ethereum, which serves as the ultimate payment settlement layer.
The gateway exchange is a smart contract that manages conversions between Dimitra points and DMTR tokens; to do this effectively on Ethereum, the gateway requires DMTR token liquidity. To provide this liquidity, DMTR holders around the world stake their DMTR in a liquidity pool.
A sidechain is a separate blockchain that runs parallel to the main blockchain. In the Dimitra architecture, a distributed UTXO ledger for Dimitra points (points ledger) is a sidechain to the Ethereum mainnet. It operates independently and has its own proof-of-stake (PoS) consensus algorithm, whereas Ethereum runs a proof-of-work (PoW) consensus algorithm.
A payments processor provides a two-way bridge between Dimitra’s points ledger and the Ethereum network. It controls an Ethereum smart contract that exchanges Dimitra points for DMTR tokens (Dimitra gateway exchange).
The Dimitra sidechain is a pure UTXO; it cannot run smart contract code, and it does not internally involve the programming language Solidity or the Web3.js library. And so it sends and receives point payments more like Bitcoin than Ethereum. It uses Ethereum for record-keeping and to on- and off-ramp ERC-20 tokens and DeFi services.
Dimitra and partner validator nodes manage the points ledger, an append-only database, where each validator has a distributed local copy of the ledger. There can be any number of validator nodes, and each one participates in PoS consensus by negotiated agreement. The validator nodes ensure transaction validity within the private permissioned PoS network.
Dimitra software-as-a-service (SaaS) acts as a centralized orchestrator hub for the validator nodes, provides support between
stakeholders in the Dimitra partner ecosystem, and maintains a copy of the points ledger for communicating with the Ethereum mainnet, acting as a payment processor, and controlling the gateway exchange smart contract.
In return, they receive a DMTR yield payment on tokens staked, for as long as they maintain their stake. Dimitra has fully automated and implemented this stake/yield algorithm in the smart contract.
Although the gateway exchange’s liquidity token is DMTR, the smart contract can receive funds in other major ERC-20 tokens such as the stablecoins USD Coin (USDC), Tether (USDT), and Binance USD (BUSD), and the Ethereum-based alternative to Dogecoin, Shiba Inu (SHIB): when a token holder stakes any of those ERC-20 tokens, the smart contract can automatically change it into DMTR at the prevailing exchange rate.
Dimitra plans to support additional settlement blockchains and is researching Polygon, Solana, and Binance among others. It also plans to provide custom support for non-blockchain fiat-based platforms involving chartered banks and central bank digital currencies for client governments that prohibit crypto-based solutions.
The Dimitra Ecosystem
The Dimitra ecosystem engages a diversity of participants—such as country partners, agricultural service providers, farming associations, financial institutions and insurance companies, technology innovators and incubators, government ministries and NGOs, and universities. Dimitra’s incentive systems motivate five types of partners to participate: DMTR token holders, validator nodes, farmers, supply chain participants, and governments.
To review, token holders receive a DMTR staking yield for staking tokens to provide liquidity in the gateway exchange, whereas node operators receive DMTR rewards for staking tokens to validate blocks of transactions within the Dimitra payment channel, and farmers receive Dimitra points for using the Dimitra application and inputting their operating data.
Other members of a supply chain can upload data on their roles and activities on the platform as well. The goal is to track the provenance of, say, vegetables sold in grocery stores end to end—from the types of seeds (e.g., organic, genetically modified, etc.) and soil quality of the farms of origin and whether members of the supply chain delivered these vegetables on time and under the conditions specified in their contracts. With this information, consumers can make healthier choices for their families, communities, and the planet.
On the platform, farmers can provide verification of their actions to maintain sustainable practices and secure local food supplies. They can also use the platform to record information on farm practices (e.g., applications of fertilizers and pesticides, number of crop rotations, etc.) so that, if a farm had a bad yield, then the farmer could claim insurance, pointing to records of the farm’s efforts to deliver a good yield.
Likewise, governments can record information on farms’ regulated activities (e.g., carbon- sequestration/CO2 emissions, deforestation rates, crop rotation minimums, etc., derived from satellite data analytics) for random audits. This capability could incentivize compliance with regulations and encourage eco-friendly farming practices.
Anyone who accesses the data cannot identify specific details about a farm or a farmer without the required permissions. However, when combined with machine learning, even anonymized and aggregated data can be highly valuable because researchers can use the data sets to develop mathematical models and analytic tools for scientific research and agricultural insights. Governments, universities, agribusinesses, and agrifinance providers can pay the Dimitra ecosystem a fee to access its aggregated data and analysis. The Dimitra platform can then push a portion of these financial returns back into the Dimitra points platform to reward the farmers who originated the data.
Satellite Data
Satellite images are composed of millions of pixels. The resolution of these pixels varies and can represent one square meter of land up to many kilometers of land. Each year, technological advances improve the spatial resolution to make it clearer, and we are nearing the ability to see square-centimeter resolutions.
With satellite imagery, researchers can analyze land trends, usage, and history; and farmers can detect changes not visible from the ground. Depending on the satellite and area of the world, we can get new satellite data as often as every day. Experts can use the data to identify pest outbreaks and give farmers advanced warnings so that they can act quickly, coordinate a response, and minimize damage.
Experts can also use satellite data to estimate organic carbon within the soil, a measurable carbon component of organic compounds.34 With such data, farmers can identify carbon-rich areas favorable to growing crops and combating climate change.35 Likewise, they can combine blockchain-based land records with satellite imagery to provide immutable and traceable information for audit or insurance purposes.
Through the Dimitra platform, governments can track agricultural productivity or monitor green initiatives underway such as CO2 levels or crop cover. For example, as part of the United Nations Strategic Plan for Forests 2030, some countries have established quantifiable goals for forest area and tree planting.36 India has pledged to add 200,00 hectares of forests and tree cover per year. Satellite imagery is the best solution for measuring progress toward these global forest goals.
Remote Sensing
When we couple satellite data with data collected on the ground, it becomes even more useful; this practice is called remote sensing. Remote sensing uses soil sample analysis, IoT sensors, drones, weather stations, and farmer surveys to estimate conditions at various spatial scales. These additional data points help validate the ground truth of satellite data.37 With these tools, we can estimate conditions in areas without any ground measurements through the use of machine-learning algorithms. We can also cryptographically hash the results from remote sensing to a blockchain so that anyone can use them, for example, to verify compliance with governmental regulations or insurance agreements.
As we improve spatial data through technological advances and increased cloud computing and storage capabilities, we can significantly enhance remote sensing capabilities and accuracy. In turn, these enhancements will improve farmers’ crop outputs. With remote sensing, farmers can make more informed and strategic decisions that will help save them money and increase their yields.
Source of data: OurWorldinData.org/Excess-Fertilizer, 2021, used under CC BY 4.0.
The Dimitra-India soil project, which aims to assess and remediate soil health across two million farms, is combining remote sensing and satellite data to assess soil conditions on such a large scale and still provide individual recommendations to farmers on how they could improve their soil.38
Drones and IoT Sensors
Drones and IoT sensors are invaluable tools for farmers. With access to drones, farmers can monitor fields and check the functionality of crop spraying and irrigation equipment. They help farmers to survey the soil, analyze it in the field, and generate real-time data. In turn, these analyses help farmers to improve soil and crop management and increase yields. Benefits to farmers include increased productivity, more efficient use of land and water, and reduced use of fertilizers, all of which reduce farmers’ costs.
Farmers can avail themselves of many types of IoT sensors that capture such information as soil moisture, pH (a measure of soil alkalinity), and nutrients like nitrogen, phosphorus, and potassium. Farmers receive accurate data and critical alerts for managing their soil and crops better.
For example, India’s agriculture industry is grappling with water usage and pollution due to chemical fertilizers, and so the Dimitra-India project benefits from IoT sensors that measure nutrients and moisture levels within soil. With IoT data on soil moisture content and variable application rates of fertilizer, farmers can optimize water and fertilizer amounts. Instead of fertilizing or watering entire fields, farmers can fertilize or irrigate only the precise areas that need it—at the right time, in the right amount. That management strategy is known as precision farming.
Key Takeaways
Of the 7.79 billion people on Earth in 2020, the World Bank estimated that 30 percent lacked access to sufficient food.39 According to the World Food Programme, another 272 million became at risk of acute food insecurity during the COVID-19 pandemic, which disrupted agricultural work and the global food supply. The world will have an additional 673.5 million to feed by 2030.
To nourish all these people and alleviate the global hunger crisis, we need to produce food locally and sustainably. Today, government agencies, NGOs, and commercial organizations are doing more to bring agtech such as the Dimitra Connected Farmer to hundreds of millions of farmers around the world. Their goal is twofold:
- to increase global food security through sustainable agriculture
- to empower the next generation of farmers.
Technological innovation is becoming more crucial in agricultural development and productivity because of farming challenges like climate change and the loss of topsoil. The Dimitra platform puts advanced technology in the hands of smallholders, gives them actionable data, breaks the cycle of poverty, and enriches the local economy through increased crop yields and healthier livestock.
Dimitra acknowledges the uncertain future and is grasping this opportunity to apply transformative technologies—blockchain, digital tokens, smart contracts, mobile access and input, AI and machine learning, satellite data and remote sensing, IoT, and drones—and change the model of farming. Dimitra aims to make a difference by increasing smallholder productivity, supporting more sustainable farming practices, and improving soil quality around the globe.
About the author: Jenessa Mellen is a business analyst at Dimitra based in Vancouver, Canada.
The Blockchain Research Institute is an independent, global think tank founded by Don and Alex Tapscott and funded by an international membership of corporations and government agencies. Its multimillion-dollar research program consists of nearly 100 projects on the strategic impact of distributed applications and blockchain technology on business and society. Each white paper is written by a subject matter expert and designed to prepare private- and public-sector leaders in their roles as catalysts of change, ushering in this next generation of networked technologies.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
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