The Concept of Using Blockchain Technology and Factors Limiting It in Beef Production in Poland

One of the possible applications of blockchain technology is the beef production process, which by its nature is long-lasting and the effects for the breeder may be achievable even after 2 years from the beginning of the animal fattening. It can be seen that due to the length of the beef production process, the risk to the farmer resulting from the economic calculation is higher. Other stakeholders forming the market chain of beef production are also exposed to this risk, especially financial institutions (banks), which often co-finance the operational activity of farms (Figure 12.1). The problem breeders have to face is monitoring animals using Internet of Tilings (loT) technology, to start preventive or early intervention measures for animals at the right time. It is assumed that the use of blockchain technology will contribute to reducing the level of production risk of the breeder but also of other participants in the production chain (Kosior, 2018). This part of the chapter focuses primarily on building blockchain and the responsibility of individual stakeholders in management of beef production. In relations to the criterion of access rights (Atzori, 2015), blockchain solutions are divided into:

■ Public blockchain, available to everyone and allowing all entities to read ongoing transactions, as well as to submit transactions to be saved in the network

■ Private blockchain, available only to selected participants

It should be noted that the presented concept of the beef production chain concerns the use of the private blockchain potential. It is based on a private data register, available only to selected participants who have the right to read transactions or who can submit transactions to place in the block. Thus, approval of participation in the network is required and new users must be invited. In such private networks, there may be a complex security system based, for example, on deciding whether new participants belong to the network of subsequent units. Licenses for participation in a given network may be introduced, and the previously created consortium will be able to make decisions about new entities (Cole et al., 2019).

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Blockchain and Big Data

Figure 12.1 The concept of building blockchain on an example, Federation of Groups and Producers Wofowina Polska. (Based on materials prepared by G. Dobiesz and M. Mular, Oracle Polska.)

Actions in this area have been taken, among others, by the author of this chapter in real and practical terms through the initiative of establishing an organization of farmers (beef producers) and organizations supporting this complex process. Manufacturers keep meat breeds such as Charolaise and Limousine, which constitute the largest share in the possession of these animals in Poland. The process of implementing blockchain technology into the beef production chain was preceded by horizontal integration activities. The Federation of Groups and Producers Beef Poland has been registered this year in the National Court Register as a result of the initiative of the leaders of this concept (http://wolowi-napolska.com/en).

The federation’s stakeholders include the following entities:

■ Farmers and beef producers

■ Agricultural producer groups

■ Meat processing plants

Depending on the strategy adopted, the group of stakeholders using blockchain may also include business environment units such as:

■ Banks

■ Veterinary inspection

■ Units regulating and monitoring the state of animal population, i.e. The Agency for Restructuring and Modernisation of Agriculture (https://www. arimr.gov.pl)

It should be emphasized that the presented concept was the result of a grassroots initiative of a group of farmers and the academic community, who started the process of horizontal integration first. Subsequently, after joining this type of beef processing plant structure, it can be mentioned that the next, important stage of improving the efficiency of farming and improving the level of food safety is being, namely the vertical integration of the beef industry and processing units. An important element of blockchain technology in beef production is planning and access to the appropriate technical infrastructure, which is an integral part of the system besides the relevant software. Attention should be drawn to an innovative solution on a European agriculture scale, which consists in the development and installation of special sensors on animals, continuously and uninterruptedly monitoring devices that focus on such animal parameters as:

■ Admission of the animal to register (blockchain) with the opening balance

■ Body temperature anomaly or behavioral changes

■ Ordered treatment

■ Start of the feeding cycle

■ Readiness to receive after obtaining adequate technological maturity

Data on the state of animal life parameters forming the Big Data collection are subject to a cryptographic procedure and stored in secured ledgers. Each block contains the end of the previous block (hash), thus enabling them to be combined into a string. All participants (stakeholders) included in a given blockchain have access to information collected in blocks. The advantage of using blockchain technology is the full sharing of information and knowledge among stakeholders of a given chain.

The information on the level of animal health collected in this way practically reflects their behavioral profile. It can be analyzed in the long term, i.e., during the full period of raising the animal, starting from birth and ending with the animal achieving technological maturity. In Polish conditions, this breeding period ranges from 18 to even 24 months, depending on the planned weight of the animal. The system dependencies presented in Figure 12.1 show that beneficiaries interested in information on the behavioral profile of animals may also be individual clients who can obtain it through the QR Code system. Hie analysis of the behavioral profile of animals in the short term also provides interesting results, that is, during the last 3 months of farming, which are very important in terms of shaping the level of food safety.

Conclusions, Limitations, and Further Research

In addition to many prospects and opportunities associated with the use of blockchain technology, there are also problems and barriers that may limit the wider use of this technology in agriculture and beef production in Poland (Ge, Brewster, Spek, Smeenk & Top, 2017).

Insufficient resources and funds necessary to undertake the required investments, i.e., among beef cattle farmers, may prove to be a barrier to the implementation of blockchain technology in food safety and quality management processes in the beef production chain. Some farmers may use their computer infrastructure with access to the Internet, which will reduce the level of required investment outlays. However, operating costs include the purchase of sensors that will be installed on animals, which will also be another expense.

In addition to economic and financial restrictions, also behavioral barriers on the part of individual participants in the beef production chain should be taken into account. First of all, the problem may be the lack of appropriate digital competences, especially among less educated beef producers and units that will have to learn the principles of blockchain technology. It should be expected that in the initial period of implementation of this unique technology at farm level, there may be a stage of adaptive changes (Kosior, 2018, p. 28). In terms of shaping the effectiveness of the entire group of agricultural beef producers, cooperation of all stakeholders is a significant problem (Jarka, 2016). The proper operation of the blockchain, which will allow to fully use its potential, requires the cooperation of all entities involved in the beef production chain.

In summary, the factors limiting the use of blockchain technology in beef production in Poland include:

■ Technical, technological, and organizational barriers

■ Economic and financial barriers

■ Barriers resulting from the skeptical attitude of farmers regarding the possibility of cooperation in the group of agricultural producers

Undoubtedly, the role of the group leader will be active organic work to eliminate the abovementioned barriers.

This paper presents the first step in the process of using blockchain technology in beef production in Poland. Further research should concern the effects of blockchain technology implementation on purpose-selected farms with beef production in Poland, based on meat breed animals. An important goal of this research will be to determine the factors affecting the economic calculation of the planned implementation of blockchain technology on farms. As previously indicated, relationships between individual stakeholders that should be based on mutual trust are of great importance in relation to the implementation of blockchain technology in farms with fattening cattle. The final effect of the actions taken in the producer group will depend on the ability to diagnose and solve problems that may affect them. Thereupon, the next stage of the research should be focused on conducting a diagnosis of relationships occurring in the group and indicating activities that can help to build them.

The aim of the study was to present the possibilities of using innovative blockchain technology to improve the functioning of the beef production chain. Research shows that the properties of blockchain make it a technology that can solve many of the problems and shortcomings of the current beef production system and contribute to ensuring food safety and quality. Primarily, the added value resulting from the use of blockchain technology is a significant increase in the transparency of operations among all stakeholders using data and applying practical technology solutions in beef production management.

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