Sustainable sugar: Australia to employ blockchain to boost provenance and profitability

By Lester Wan contact

- Last updated on GMT

The Sustainable Sugar Project, led by the Queensland Cane Growers Organisation, will use blockchain technology to implement the Smartcane Best Management Practice. ©Getty Images
The Sustainable Sugar Project, led by the Queensland Cane Growers Organisation, will use blockchain technology to implement the Smartcane Best Management Practice. ©Getty Images

Related tags: Australia, blockchain, provenance, profitability, Traceability, Sugar, Sugarcane, association, Export

The Australian sugar industry's push for greater sustainability and traceability has received a shot in the arm, with its Coalition Government providing an A$2.25m grant to fund the Sustainable Sugar Project.

The Sustainable Sugar Project, led by the Queensland Cane Growers Organisation (Canegrowers), will include the use of cutting-edge blockchain technology to implement the Smartcane Best Management Practice (BMP).

In Smartcane BMP, industry researchers and sugarcane farmers collaborated on standards based on productivity, profitability and sustainability. It is voluntary, industry-developed and industry-owned.

“The Sustainable Sugar Project aims to meet the needs of end-users who require sustainably-produced sugar and to develop transparency around a market for that sugar. By using Smartcane BMP and blockchain technology, Canegrowers is seeking to provide provenance for our product, increase our market access and provide greater value to growers and the market,”​ a spokeswoman from Canegrowers told FoodNavigator-Asia​.

Higher farm gate prices?

Australia’s Ministry of Agriculture and Water Resources said big sugar buyers are likely to pay more in the future for sustainably-grown and fully-traceable sugar as their customers ask for it.

Agriculture Minister David Littleproud said consumers and food manufacturers want sustainably-sourced food and fibre, including sugar, and they want to know where it comes from.

He cited Coca-Cola as having a plan to source 100% of its sugar from sustainable sources by 2020.

“This technology would provide assurances around the sustainability of our sugar, and ensure cane farmers using sustainable practices can attract a premium price for their product,”​ he said.

"Because the demand for sustainably-produced food continues to grow, this project will help to increase exports and help gain better access to markets to capitalise on our important free trade agreements."

According to World Atlas, Australia is the third-biggest sugar exporter in the world, having exported 3.7m metric tonnes in 2015/16. In Asia-Pacific, only Thailand exported more, at 7.8m metric tonnes.

Sugar is one of Australia's most important industries, worth around AU$1.75bn to the Pacific nation’s economy.

How blockchain helps

The encrypted data in the use of blockchain can clearly show buyers where the sugarcane came from and prove provenance and the sustainability of that farm, said the government.

“The reason this data is so important is it cannot be tampered with,” ​said Littleproud.

“Blockchain’s main attribute is that it’s a secure database in which all transactions are recorded and visible — it can simply be thought of as an online record book. Each block in the chain represents a transaction and, while it’s encrypted so it can’t be deleted, reversed or edited, it is visible to everyone,” ​Canegrowers told us.

“So the quality sugar produced from the sustainably-grown cane can be traced back through the chain, giving consumers confidence in what they are buying.

“Canegrowers sees the benefits of blockchain to agriculture as including enhanced transparency of supply chains, provenance and financial efficiencies.”

Current status

The grant was delivered to Canegrowers, who will partner Queensland Sugar Ltd on the four-year project.

Canegrowers represents the majority of sugarcane growers in Australia. About 95% of sugar produced in Australia is grown in Queensland.

Sugar exports in 2016/17 were worth AU$1.7bn in export earnings for Queensland alone.

Canegrowers told FoodNavigator-Asia​, at this stage, no contract or arrangement has yet to be sealed with any vendor for implementation of the blockchain and traceability program.

Beverage industry response

The Australian beverage industry appears to have taken to the developments well.

“The Australian Beverages Council welcomes environmentally-sustainable initiatives that deliver benefits for farmers, manufacturers and consumers alike,” ​Australian Beverages Council CEO Geoff Parker told FoodNavigator-Asia​.

“We congratulate the government and Queensland Cane Growers for launching the Sustainable Sugar Project. Members of the Australian Beverages Council have told us that consumers are increasingly looking out for products made from sustainably-sourced ingredients, so we believe this development will be welcomed by a broad cross-section of consumers.

“Many of our members have sustainability practices that are industry-leading. In addition to existing initiatives that help Australians make informed choices about which products they want to buy, such as the Health Star Rating, we believe sustainable sugar data will offer even more contextual information to support consumer choice.”

The Australian sugar industry produces raw and refined sugar from sugarcane. More than 80% of all sugar produced in Australia is exported as bulk raw sugar.

Asia is a key focus region for Australian sugar, with major export markets including South Korea, Indonesia, Japan and Malaysia.

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