Trust in supply chains can be a tricky thing to achieve. It’s absolutely necessary to make them work, but they can be hard to establish because so much of how things actually move from Point A to Point B can be frustratingly opaque.
Mastercard’s Senior Vice President of Innovation and Startup Engagement Deborah Barta told Karen Webster in a conversation with Luis Macias, CEO and Founder of GrainChain, that COVID-19 has only intensified the issue. The question “where’s my stuff?” has been recurring at various levels of intensity throughout the pandemic period — putting pressure on brands to bring visibility to supply chains.
That pressure, she noted, has inspired the new partnership that Mastercard and GrainChain are announcing today to tie GrainChain’s agricultural supply chain technology solution into Mastercard’s proprietary blockchain technology to build a more inclusive and productive agricultural supply chain worldwide.
“The way that we’re seeing this come together is that the industry expertise of partnerships that combined GrainChain’s expertise in tracking the historically underserved agricultural segment with the powerful global scale of our backend, and what it does is it builds trust between the parties where today trust is inherently tricky because folks don’t necessarily want to share their information or they don’t have a way share information with each other. We can power that sharing in a way that’s pretty magical,” Barta said.
For the small farmers and producers at the ends of the supply chain, who gets paid fairly and gets the best possible price isn’t merely a matter of successful business but a literal matter of life and death. What they sell today, Macias noted, is what buys the food they are going to eat and feed their families with tomorrow. If they can’t be paid on time, or their buyer decides to underpay on their contract because the goods don’t look just right upon delivery — those farmers don’t have a lot of recourse in the developing world. They can get paid late, he noted, or go hungry.
But GrainChain can inject transparency into the process that means the farmer has literal and presentable proof of their goods’ quality from their harvest to their delivery. It means they’ll get paid more and in a timelier manner.
“We see it every day. We’re on the ground and our systems are on the ground and we go into regions with this technology and change lives,” Macias said. “Our goal is more than just financial inclusion. We want to change the industry, from farming merely to be able to sustain yourself [to actually building] a financial stronghold and [being] able to grow. Hopefully, with our systems, our implementations and what we do, farmers aren’t looking to just eat tomorrow.”
Opening Up The Shades On The Supply Chain
The agricultural supply chain is incredibly opaque, particularly in the developing world where demand for GrainChain’s services is highest. That opacity is not entirely accidental, Macias noted. The reality is a lot of middlemen and other players have taken advantage that the supply chain is incredibly confusing. There is no standard way of gaining access to information about where things came from, their quality upon shipping, how they were carried and how long they were in transit. What GrainChain has done and can now do more effectively, having plugged into Mastercard’s Provenance technology, is to implement technology and tools to make it easier to systematically grade the products, such that all the information about where they came from and what they’ve been through is easily accessible.
“We’re now allowing for machines and not humans to be able to add this data. And what that’s doing is it’s giving extreme legitimacy to the information that’s being put in,” Macias said, noting that information put in by hand could be tampered with by someone behaving dishonestly — or be misrepresented due to honest human error.
Via their IoT integrations and technology on the ground, they can quantify information and verify that it’s real. Plugged into the technology in the scalability of Mastercard’s Provenance solution, what one gets is an “extremely traceable record that cannot be modified.”
A Growing Necessity Across Verticals
Macias noted that in a pre-pandemic world, as they approached the financial institutions and larger farming groups worldwide, the services they offered and supply chain transparency were considered a nice thing to have. Today, no one is thinking that way anymore.
“COVID has proven this is where we need to go,” he said. “When you start pulling people out of the equation and putting systems into the equation, when you start transferring money in a digital sense, when you start moving records and doing things in a way where there’s less human interaction and more efficiency, at this moment in history that is something that everyone is into now.”
Mastercard’s Deborah Barta noted that the need is felt in supply chains across verticals — not just agriculture, where this collaboration is starting.
“The roadmap from here is extensive,” she said. “And so for us to enable them to scale in any country, any region, [and] branch out into other industries, perhaps wherever they decide to take their business, we can accommodate that with the commonality of global services that we already offer today. It’s a logical extension.”