The agriculture industry just got a major boost – grain trading is going digital.
The world’s four largest agriculture companies have joined together to digitize international grain trading. The group, most commonly referred to as ABCD, are planning to introduce blockchain and artificial intelligence technology to modernize the grain trade.
The four agribusinesses – Archer Daniels Midland Co, Bunge Ltd, Cargill Inc, and Louis Dreyfus Co, have said that renewing the industry by introducing these new technologies will serve to make international trade more efficient and transparent while reducing costs.
Routers reported last week that the companies are trying to replace an antiquated system that relies far too heavily on paper trails of dated contracts, manual payment records, and invoices. The companies are trying to clean up all of that waste.
What are the benefits of digitization?
The group’s first goal will be the automation of grain and oilseed post-trade processes. Along with this announcement the company released the shocking fact that over 275 million emails are sent annually by commodity traders in conjunction with the processing of only 11,000 shipments of grain transported over the ocean. A frankly remarkable waste of energy.
The companies have expressed some hope that other global agriculture giants will join them in their efforts – China’s Cofco and Japan’s Mitsui are both highly influential companies that could help the entire industry move towards ultimate digitization.
“Many aspects of agricultural trading are highly manual and costly: paper documents, facsimiles, manual retyping of data, and so on – many transactions still utilize the hard copies of documents,” said the companies referring to their new endeavour.
The slow adoption of the technology
The move makes a lot of sense in a world where distributed ledger technology is steadily gaining adoption ubiquitously, or at least it is being recognized for its advantages. The technology will likely be as commonplace in business operations someday as computers are right now.
The agriculture industry has suffered from its lack of digitization, but there have been a number of positive developments over the last year. With this move from the world’s most powerful agricultural companies, the industry looks like it’s about to undergo a massive shift for the better.