By Connor Lynch
PRINCE EDWARD COUNTY — Picton-area cash crop farmer Lloyd Crowe wasn’t exactly enthralled when a start-up from Toronto called him to talk about blockchain. Block what?
A relatively new technology (invented in 2008), it’s been pitched as an extremely secure, fast and efficient system for trading anything, including buying or selling grain. It works like this. When you agree to sell some grain, that information gets recorded on thousands of different computers. The transaction is called a block and the chain is the secured information between many computers. Each transaction is also a public record, so anyone can check on it.
Crowe decided to listen to the pitch and found a new home for a load of high-vom, rejected corn within minutes and with a tap on his cellphone he sold his grain and as soon as he’d dropped off his corn, payment was immediately transferred to his bank account, thanks to the pilot project he’d agreed to be part of.
Crowe was approached by start-up Grain Discovery in the summer. The company, among other things, was rolling out a price discovery platform, using blockchain, for the desktop computer and smartphone. Producers could post how much grain they were looking to sell and for how much; elevators could post what they were buying and for how much, and everyone could see what everyone else was buying and selling.
Crowe, along with Grain Discovery founder and CEO Rory O’Sullivan, met with some big players in a board room to see if Crowe would participate in the pilot project. “It was like Dragon’s Den,” he said, referring to the TV show where prospective business owners pitch ideas to investors. “Except I was the Dragon.” Crowe did his best to shoot down the idea. “I was the negative guy, no doubt about that.”
But by the time the meeting was over, he agreed to try it.
Crowe has been having difficulties getting his corn shipped this year; unexpectedly high vomitoxin levels meant he was sometimes getting every second or third load rejected. Just before Christmas, he had one turned away. Instead of getting out his phone and calling elevators, seeing who would take his crop, he pulled out his phone and checked the Grain Discovery app that was downloaded to his cellphone. Within minutes, he had a buyer, offering a better price. The sale was also reportedly a world-first; no grain transaction had been done using blockchain before, according to Grain Discovery.
The alternative would’ve been hours on the phone, calling around, desperately looking for someone to take the corn. “I’ve got to get this corn off. I don’t care what the price is,” would’ve been his bargaining position, Crowe said. If it came to nothing, his driver would’ve had to haul the corn the whole four-hour journey back to the farm.
Grain Discovery’s O’Sullivan said that the company plans to focus on Ontario, with an eventual launch across North America by late fall of this year. The advantage for farmers? Grain Discovery may not fully replace traditional marketing methods, but for spot-selling corn, it’s unmatched in speed and convenience.
The other advantage is price comparison. Since grain to buy and sell is posted on a public network, farmers can easily compare prices without having to call around. And with a simple click to lock in a deal, it cuts out the middleman drastically. “When I was working for a small co-op, I would spend 80 per cent of my day answering phone calls, discerning a price, writing a contract and sending it out. This eliminates all that,” O’Sullivan said.
Security’s always a concern on the internet. That’s the advantage of blockchain. The information isn’t stored in any one place and the computers constantly compare records to make sure they’re accurate and eliminating fraud.
Crowe thinks the system is the future, and O’Sullivan agrees. “We think, in a couple of years, the supply chain will be adopting this. Like that old Wayne Gretzky quote, ‘We’re skating where the puck is going to go.’”
