GrainChain creates innovative solutions to solve the complex challenges facing the global agricultural industry at every stage of the supply chain. They use cutting edge technology to make the process easier, faster and safer for all participants. Jaime Lopez, CSO of GrainChain
Jeff Pribich: Please tell us about GrainChain’s mission.
Jaime Lopez: GrainChain’s mission is to create world class, innovative, technology-driven solutions to solve the biggest challenges facing the global commodity trade and supply chain flow.
Jeff: From the small farmer’s point of view how does GrainChain level the playing field enabling them to compete in the agribusiness economy? In your view is this the biggest problem you observe in agribusiness?
Jaime: Small farmers face a variety of challenges including financial inclusion, access to liquidity, access to the marketplace. Financing is the most common challenge connecting farmers around the world. GrainChain provides the same tools used by the larger players in the agricultural industry to smallholder farmers.
Jeff: GrainChain supports multiple segments of the agribusiness supply chain from producers to logistics. Tell us a little more about how your suite of blockchain products enable efficiency and transparency across the supply chain.
Jaime: GrainChain has developed a revolutionary platform that is leveling the playing field for producers, buyers, storage operators, lenders and all other participants on the global agricultural supply chain. Our solution combines blockchain and IoT-driven technology to verify and auto-execute smart contracts, creating fully automated and digitized workflows at every stage. The GrainChain platform provides a central, single point of truth that brings all participants on the supply chain together with transparency, efficiency and reliability of data.
Before a seed is even planted, producers and buyers negotiate and digitally sign a smart contract for the commodity in Trumodity, our trusted transaction platform. Producers then capture preharvest data like seed and fertilizer receipts and certifications in Seed Audit. When the harvest is ready for transport to a storage facility, HarvX connects producers and drivers directly to coordinate and track pickup and delivery. SiloSys is our inventory management system that provides real time data and tracks the commodity to and through these storage facilities. Our patented solution collects the data and feeds it into Trumodity for verification to trigger execution of the smart contract. Lenders are paid back first, producers receive payment more quickly than ever, and buyers receive immediate tradable title to the commodity.
Jeff: Tell us more about the blockchain technology you’ll be utilizing. Your focus on performance of the GrainChain platform has in the past resulted in migration from Hyperledger Fabric to a new network. With the capability Trumodity provides for rapid settlement as a key component of your platform, what is the frequency by which GrainChain evaluates their technology footprint to ensure no performance constraints exist?
Jaime: Our blockchain solution incorporates portions of IBM’s Hyperledger Fabric, Symbiont’s Assembly platform for smart contracts and settlement and Mastercard’s Provenance Solution to enhance provenance and traceability. GrainChain is a blockchain-agnostic company and we have chosen the best technologies on the market to globally scale. We have designed our solution to be modular, future-proof and easily upgradable as technology advances and better solutions are created, and evaluating it is an ongoing, continuous process.
Our research and development team is continuously evaluating technology to meet the varying and specific needs of each client. Different clients have different needs based on which commodities they work with, their region and their supply chain. We build custom deployments for each client based on these needs.
Jeff: Can you expand on your use of smart contracts to empower low-income farmers with accelerated payments and transparency?
Jaime: Our patented smart contract solution helps producers to get paid more quickly by eliminating manual data entry, paper records and checks and including all participants in the contract from the start. Producers and buyers agree to the quality and quantity required for the commodity in the smart contract, and lenders, landlords and other payees are also included. The contract is negotiated and signed digitally.
The automated, machine-driven data captured at each stage of the supply chain feeds into our smart contract solution. When the data is verified, the contract is automatically executed. Traditionally, producers would have to wait for a paper check and have the buyer sign it in addition to signing it themselves. This would then be deposited with the lien holder, who takes their repayment before sending the remaining balance to the producer. This process can take several weeks; using our solution, we have seen it completed the same day.
This helps the producer avoid taking on further debt to continue to fund their operation while waiting to get paid for a harvest delivered weeks earlier. The transparency of the data helps lower risk for lenders, facilitating access to better financial opportunities for producers.
Jeff: How do you envision your suite of product offerings in 2-10 years?
Jaime: We envision two distinct parts to our future. First, we have our core product which will continue to grow and scale. Secondly, we will also focus on additions and customizations to that core product to meet the varying needs of each client.
We will continue to expand the commodity types we process. We future-proof our solutions as much as we can and as technology evolves quickly, we will continue to evaluate and integrate the best technology available.
Jeff: Your global ambitions have become realistic. Can you expand further on your global ambitions and where do you see GrainChain as a standard platform for agribusiness across multiple countries?
Jaime: Our ambition is to create a new higher standard for the global agribusiness supply chain. We are doing so by improving transparency, connecting more participants, reducing risk and providing enhanced traceability for the consumer. These are standards that can be applied across supply chains; ultimately, our goal is to positively impact those supply chains globally.
Jeff: With GrainChain providing small farmers, the backbone of the farming industry, the capability to remain in business and compete, how do you see your impact on the availability and cost of foodstuffs across continents?
Jaime: Our focus is on creating business efficiency for all participants along the supply chain. By automating and digitizing processes, we are providing reliable, accurate data to these participants, especially small farmers. Many factors affect the final price of foodstuffs across continents—many of which are outside of our control— but what we can do is keep more money in the pocket of the farmer by facilitating access to financing and reducing operating costs for all supply chain participants. By keeping costs low throughout the process, ideally we will help mitigate costs that are traditionally passed onto the consumer.
Jeff: With all the frenzy surrounding crypto currency, do you foresee the use of crypto currency for smart contract settlements? If cryptocurrency is in use today on the GrainChain platform, is there integration of GrainChain with crypto currency exchanges?
Jaime: While GrainChain’s solutions utilize blockchain technology, we do not offer any tokens to the public and have no current plans to do so. That being said, we do envision a future where cryptocurrency could be used as a form of payment for smart contract settlement but it will depend on government regulation and proper implementation.
Jeff: You mentioned how GrainChain provides the same tools to smallholder farms as the large players in the agricultural industry. With GrainChain’s success, do you see the large players migrating over to the higher standard GrainChain platform?
Jaime: Our goal is to set a new standard for traceability, efficiency, transparency and reliability for the global commodities market. We would not be surprised to see more of the industry, including the larger players, wanting to adopt our solutions.
Jeff: Do you or the founder have a personal memory or story that helps to explain this driving force and ambition behind GrainChain?
Jaime: CEO Luis Macias initially started in the agricultural industry to help his father-in-law, a lifelong farmer who still did most things the traditional way: paper receipts, old log books, checks in the mail, and only doing business with buyers he could trust in a handshake deal. It became very time consuming to manage silo inventory, so Luis offered to build a small product that would help him but still be easy to use and adapt. This was the beginning of SiloSys, our inventory management solution.
A few years later, Luis and the team that would become GrainChain’s founders saw an opportunity to bring transparency, traceability and efficiency to each stage of the agricultural supply chain. Soon after, GrainChain was founded and has worked to level the playing field for farmers like Luis’s father-in-law ever since.
CSO of GrainChain