Smart contracts allow streamlining the purchase-sale processes by guaranteeing backup, security and that all the parties involved are satisfied with the negotiation conditions
Payments for the shipment and purchase of essential products such as wheat flour and vegetable oil are made in Switzerland thanks to the use of blockchain technology. According to those who participate in this operation, it is the first business in the grain industry which is made on blockchain technology.
Transoil International and Solaris Commodities, two Swiss companies, made an experimental transaction using this technology to channel the settlements. The financial terms and the details inherent to the exchange have not been disclosed publicly, but it was known that this transaction was made on November 12th.
The pilot test was conducted in a decentralized platform, created by the Swiss startup Cerealia, exclusively for the payment of agricultural products. To make real the business, the companies agreed to send 25,000 tons of wheat that would leave from the port of Novorossiysk in Russia to the northern coast of the Black Sea, in a FOB port.
Smart contracts are the fundamental characteristic of blockchain technology that attracts more and more different types of companies or any type of entrepreneurs interested in establishing their agreements electronically, safely and ensuring that the established terms will be conducted.
In the case of the transaction between these two Swiss companies, an independent auditor was responsible for confirming the validity of the smart contract that was obtained as a result.
In addition, this person was responsible for verifying the digital signatures. The objective was to make sure that the information was encrypted and that it could not be decoded by a third actor, which is one of the characteristics of blockchain technology: the backup and security of the information stored in the nodes or encrypted blocks.
According to Cerealia workers, this blockchain platform allows minimizing possible risks and conflicts that arise during the operation, in order to achieve better results. For this, distributed accounting technology (DLT) helps control the different phases of the operation efficiency, as well as disputes that may appear along the way.
With this background, agricultural producers and sellers are increasingly interested in using blockchain technology to ensure the safety of their operations. In this way, any member of the transaction has access to the information.
In other regions of the world blockchain technology is attracting the attention of buyers and sellers of different items. Four of the largest agricultural companies in the world, known in this field as ABCD, decided to work together, in order to use blockchain technology, or artificial intelligence (AI), in the purchase and sale of cereals.
The chain of blocks and the AI will be used initially to automate the post-negotiation processes of grains and oilseeds, which are a manual and a very expensive part of the supply chain. However, in September, Albert Heijn, the largest supermarket chain in the Netherlands, revealed that it is using blockchain to make its orange juice production more transparent.
Also a national milk marketing cooperative in the United States, Dairy Farmers of America (DFA), partnered with Fintech alimentary company to launch a pilot project driven by a chain of blocks that also aimed to improve the food supply chain.
The Department of Foreign Affairs of the United States said its intention is to investigate other forms of using blockchain technology to get benefit from its use.
By María Rodríguez