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FarmShare White Paper
FarmShare White Paper
1. Introduction:
FarmShare is a decentralized community-supported agriculture platform built on Ethereum, the
world’s first distributed world computer. Blockchains, smart contracts, and decentralized
autonomous organizations are causing quite a stir in the tech industry, yet they have not
affected the vast majority of the world’s population, to whom the notion of Ethereum conjures
scenes from dystopian sci-fi thrillers. It is imperative for the success of the blockchain
ecosystem to invent applications that solve real world challenges affecting millions of everyday
people. With that in mind, this document outlines a proposal for an agricultural blockchain
service which aims to rebuild the broken food system, starting at the community level, by
adapting an existing business model (CSA) and leveraging the Ethereum network’s potential for
distributed governance, platform cooperativism, and planetary-scale computation.
Beyond its environmental effects. The centralization and industrialization of agriculture has had
considerable detrimental socio-economic effects. As the size of farms rises the number of farm
jobs decreases, leading to high unemployment rates in regions which once depended on
agriculture. Farms have consolidated in large part due to the widespread agglomeration of
processors, distributors and retailers along the supply chain, each taking a generous cut to
support its massive infrastructure. In the dairy sector in particular, farmers no longer have any
control over the price of their product, as massive cooperatives such as Dairy Farmers of
America have taken over the supply chain entirely4.
1
http://www.history.com/news/10-things-you-may-not-know-about-the-dust-bowl
2
http://www.scientificamerican.com/article/only-60-years-of-farming-left-if-soil-degradation-continues/
3
http://www.nationalreview.com/article/418509/how-taxing-organic-products-could-solve-californias-water-
shortage-terry-l-anderson
4
http://www.dairyreporter.com/Manufacturers/DFA-to-pay-50m-to-settle-Northeast-US-milk-price-lawsuit
1.2 Community-Supported Agriculture
Community-supported agriculture is an alternative economic model for the production and
distribution of locally grown food. It originated in the 1980s in the north eastern United States,
based on the concept of biodynamic agriculture first proposed by Rudolf Steiner. CSAs operate
on a shared risk-reward model, in which a community of shareholders funds the operation of a
local farm at the beginning of the growing season in exchange for weekly deliveries of fresh
produce and other food products (such as eggs, dairy, meats, etc) over the course of the
harvesting period.
Such an arrangement is beneficial for both the farmers, who are effectively insured against risks
such as potential environmental factors leading to low crop yield, and consumers, who gain the
ability to influence decisions such as crop production ratios to better suit the needs of the
community. Ideologically, the original CSAs promoted new forms of communal land ownership,
collaborative labor relationships, and locally-oriented economies which rely on direct
farmer-consumer engagement. However, as CSAs have grown in number and size, the
philosophical underpinnings have given way to more practical considerations.
1.4 Blockchains
Blockchains are a type of decentralized database system, first implemented as the underlying
technological innovation behind Bitcoin. In the case of Bitcoin and other cryptocurrencies, the
blockchain serves as a public ledger, containing a record of every transaction ever made on the
network. A blockchain is not stored on any centralized server, but rather is maintained by a
network of users, thus eliminating the need for a trusted third party to process transactions. The
computational power required to add new transactions to the blockchain makes it prohibitively
hard to alter or cheat the system, and a reward system is typically used to provide an incentive
for users (known as miners) to maintain the system. While the blockchain was first used in the
context of digital currency, there have been many subsequent projects which aim to leverage
the model of distributed consensus for other applications, such as domain name registration
(NameCoin), crowdfunding (Swarm), and smart property (colored coins).
FarmShare differs from both original and contemporary community-supported agriculture in
several key ways. Rather than operating as a single farm, FarmShare serves as a platform for
entire communities to create a parallel economy for the production, processing, distribution, and
consumption of local food. Furthermore, shares need not be purchased ahead of time at a flat
fee, but may also be earned by supporting and contributing to the local food system. Shares
may be issued for volunteering on the farm, transporting food, contributing to a crowdfunding
campaign, sharing processing equipment, participating in an educational workshop, and
anything else a community assigns value to. Shares may be exchanged for food from a network
of farmers markets, co-op stores, specialty markets, restaurants and food pantries
Shares may be minted when a new member joins the community, as in the Community
Currency template. The treasury could also mint shares in response to messages from the
‘workshare’ contract indicating that a task has been completed successfully. The community will
have to decide whether it is more appropriate to mint new shares to pay task bounties, pay them
from the community fund, require that the creator of the task pay, or some combination of the
three. The balance may shift over time, with the treasury minting new coins early on until the
community fund has generated enough income. Members may be required to pay the bounty for
certain tasks but not for others. For instance, the community may decide to reward people for
attending an educational workshop from the community fund, whereas a farmer could be
required to pay for access to another member’s processing facility.
Shares may be redeemed for food and other agricultural products from a variety of producers in
the community. Because FarmShare will have to integrate with the existing agricultural
ecosystem at critical touch points such as farmers markets, grocery stores and co-ops, which
typically involve a cash exchange, shares will require an exchange rate to allow users to easily
convert to familiar units. At first the share will likely have to exist in tandem with traditional cash
transactions, perhaps combined with a discounted price in USD.
There is already a simple job market DApp which allows users to post jobs and skills to be
completed for a reward. It is a very basic framework which could be expanded upon to features
such as escrow, repeating tasks, group tasks, volunteering (in return for reputation only), and
user reviews. Identity and reputation could be managed by an external DApp, such as u Port.
Successful completion of a task would require both parties to send a transaction to the task
contract, which would then trigger a message to the token contract to transfer or mint shares, as
well as a message to the identity system indicating an increase in reputation for a job well done.
Tasks that are accepted by a user but not completed may result in a reputation loss, while
disputed tasks could be handled by a community conflict resolution board (see section 2.5 on
community governance).
2.3 Resource Bank
Shares can also be earned by sharing resources within the community, through a separate
resource bank contract. Resources may include excess food (for donation rather than the
market), compostable waste, farming equipment, processing facilities, land, etc. This component
is intended to allow for a parallel economy based on the free exchange of resources as well as
labor. There is a clear lack of infrastructure to support such sharing within a community, as most
resources spend the majority of their time unused. Bootstrapped solutions such as Craigslist
(and the Upper Delaware Network in Sullivan County) have been fairly successful, and a whole
ecosystem of companies have emerged around the new ‘sharing economy,’ but these services
have not yet been successfully integrated with local food systems.
A user may interact with the resource bank either to list a new resource or request access to a
resource that has already been listed. The resource bank contract would message the identity
system to verify the reputation of the user before confirming access. Each instance of a
resource contract may contain parameters such as payment information, access length,
restrictions, etc. For instance, one might offer to exchange some excess food in exchange for
one-time access to a processing facility, or this may be scheduled on a weekly or monthly basis.
The contract may then stipulate that the processor bring the resulting goods to market, in return
for which both parties receive a percentage of the sale.
2.4 Marketplace
Shares may be exchanged for food and other agricultural products through the marketplace
feature. The marketplace will be distributed and integrated into the existing fabric of the
community, at critical touch points such as farmers markets, farm co-ops, grocery stores,
restaurants and food pantries. To some extent the experience may be similar to shopping on
online farmers market platforms such as Farmigo or GoodEggs, where customers join a local
community with a host that serves as a distribution hub. However, it may be the case that many
community members are willing to travel to the farm to pick up their food directly rather than
have it delivered to the farmers market. Users will have the option of viewing the entire supply
chain associated with each food item, and the ability to choose at what point in the chain to
interact with the market.
Producers may post a product on the market along with a description, price, quantity, and
photos (via IPFS). Consumers may interact with the marketplace by claiming a product, which
could involve holding the shares in escrow until both parties confirm the successful exchange.
Community members may coordinate the exchange via Whisper messaging or traditional modes
of communication. If enough members opt for delivery to a community hub, the market contract
could message the task contract to find transportation. Members may also leave reviews for
particular vendors, customers, and products, which would cause the market contract to
message the identity system and either add to or subtract from the user’s reputation.
2.5 Community Governance
Decision-making within the community can be handled democratically, using a distributed
governance application such as BoardRoom. Any member may table a proposal on the platform
to be voted on by the rest of the community, with the ability to automatically enact proposals via
smart contract once a predefined number of community members have approved it. The
community may establish committees and subcommittees on any number of issues, which may
have an electable chair, add or remove members based on community consensus, allocate
funds according to tabled proposals, and revise its structure or bylaws as deemed necessary by
the community.
By default the community would have two independent boards for managing the treasury and
community fund accounts. It may be effective to have multiple subcommittees to manage
portions of the community budget associated with various subjects or sectors of the local food
economy. For instance, dairy farmers, processors, and contributors to crowdfunding campaigns
to support local milk and cheese initiatives may be added to a committee devoted to local dairy,
which may have subcommittees for managing funding, marketing, processing, and distribution.
Consumers are becoming increasingly concerned about the provenance of the food that they
purchase, which is one of the primary reasons that CSAs have grown in popularity over the past
several decades. The local food movement grew out of a concern not just for the quality of the
food but also for the energy burned and emissions caused by the transportation portion of the
supply chain. The blockchain allows FarmShare users to know not only the farmer from whom
they purchased a product, but also the quality of the soil and the air on his land, the source of
the seeds and the fertilizer used to grow it, and the distance it traveled to get from farm to table.
3. Sullivan County Pilot Program
This paper is the result of a year-long feasibility study conducted in a rural agricultural
community in the Catskills, about two hours northwest of New York City. FarmShare would like
to launch a pilot program in Sullivan County, NY, hopefully by 2018, which will serve as an
integral part of the design and development of the tools and protocols.
Despite the hard times, there is much to be optimistic about in Sullivan County. A growing
number of small farms are producing a greater variety of goods, contributing to a vibrant
farmer’s market community. Agritourism has been a growing trend, drawing capital as well as
interest from New York City and elsewhere.
http://www.co.sullivan.ny.us/Departments/DepartmentsNZ/PlanningandEnvironmentalManagement/Agricu
lturalProtection/tabid/3257/default.aspx
One promising alternative to selling fluid milk to Dairy Farmers of America is local value-added
processing. Products such as cheese, yogurt and ice cream sell for a premium at local farmer’s
markets and grocery stores, and may be produced with great variety. This returns power over
the price of the product to the farmers, and allows them to make a living. However, most dairy
farmers are far too busy to learn an entirely new craft, much less handle the marketing and pay
for the necessary equipment. Still, the recent success of Tonjes Dairy Farm in Callicoon, which
began making cheese in a mobile processing unit and later built its own facility, suggests that
the business model has the potential to revitalize dairy in Sullivan County.
In 2010 the IDA commissioned a study on the feasibility of building a regional creamery in
Sullivan County. While the report ultimately concluded that the investment required to construct
and operate medium-sized dairy processing facility made it infeasible given the expected
returns, it did refer to the Tonjes Farm model as a promising alternative, stating that niche
producers could benefit from the “creation of on-farm local processing and distribution capacity
that might be shared with others.”6
http://catskillsedc.com/blog/wp-content/uploads/2012/02/SullivanCty_Creamery_MarketFeasabilityAnalysi
s.pdf
Rather than repairing the original unit, the community could also elect to purchase a new one, or
even several. This would allow the units to be truly mobile, making it possible to move frequently
from farm to farm. However, trailer-sized mobile units such as these could cost more than
$200,000, which may make this option infeasible.
A third option is to invest in many small-scale facilities, which could be packed up in a typical
truck and moved from farm to farm with relative ease. Indeed, a group of Sullivan County
farmers considered such a proposal in 2010, when they spoke with farmer and inventor Frank
Kipe, whose micro-scale equipment sells for under $14,000 altogether.7 This is a reasonable
goal which could be raised through a combination of crowdfunding and grants, and would allow
the network to scale gradually as small, successful projects accumulate value through network
effects.
Artisan dairy producers will be attracted to the platform by the combination of technological
innovation and the agrarian lifestyle. In addition to traditional methods, cheesemongers can be
compensated by receiving a specific percentage of the price of each product sold, which would
be converted to Ether (ETH) and divvied out automatically by a smart contract, according to the
specific agreement between all parties involved. This could include many contributors to the
supply chain, small and large, as each step is a transaction which can be recorded on the
blockchain. Consumers could view the transaction history of every block of cheese, and both
cheesemongers and farmers could receive a reputation for high quality products.
Consumers of high-quality value-added dairy are often willing to spend considerably more for
goods that portray a sense of craft, tradition, nutrition and renewability. By cutting out the
7
http://www.riverreporter.com/issues/11-01-03/head1-microdairies.html
middlemen and emphasizing these qualities, the FarmShare network will be able to market its
products at a competitive price while providing a greater return to the farmers. Producers will
benefit from branding as a community, i.e. FarmShare Catskill Cheese, which will raise
awareness of the region and stimulate more agricultural innovation in Sullivan County.
FarmShare proposes to incorporate the interactive asset map as a core feature of the user
interface. Presenting a spatial representation of the chain of transactions will make the tangible
for non-technical users, who can also use the map to locate tasks, resources and exchanges.
Producers may use the map to manage logistics, for example to find volunteer drivers, while
some farmers may just choose to share their location so that community members can pick up
their food in person. Other community members may have available land that they would like to
see farmed, or even a garden. Community members may be rewarded shares for contributing
information to the map, providing an incentive for keeping it up to date.
8
http://urbandesignlab.columbia.edu/projects/food-and-the-urban-environment/nyc-regional-food-shed-initi
ative/
9
http://mdfoodsystemmap.org/map/
3.4 Challenges
Perhaps the most obvious challenge to implementing FarmShare in Sullivan County is a lack of
digital infrastructure. A considerable portion of the county’s residents does not have Internet
access, particularly the elderly and immigrant population. These residents are often the most
vulnerable to poverty and poor nutrition, and must be factored into any metric of the project’s
success in the long term. One possible solution is to issue a paper wallet with each account,
which members could bring to volunteer and distribution sites. A mobile app might scan a QR
code on the paper wallet to access a member’s account, for instance when visiting a food pantry
or participating in an educational workshop.
Another significant challenge will be the prevalence of poverty and poor education in the county.
Comparable community currency projects such as Berkshares and Ithaca Hours benefit from
relatively affluent populations, while most cryptocurrency adopters are well-educated and
comfortable with sophisticated technology. It must be stated that the scope of the project in
Sullivan County will be reasonably limited as it is, due to technical and budgetary constraints.
However, with such dismal statistics as a reference point, any improvement at all to the wealth
and wellbeing of the county should count as a success. The success of the dairy initiative will
depend upon whether FarmShare can secure a better price for the farmers, while the intention
of the asset map is in part to educate and inform.
C2Sensor: https://www.emergingprairie.com/biodegradable-soil-sensor-in-design/
Ethereum: https://www.ethereum.org/
White Paper: https://github.com/ethereum/wiki/wiki/White-Paper
Cryptoequity:
From Cryptoequity to Cryptocommons:
http://www.slideshare.net/raffaele.mauro/from-cryptoequity-to-cryptocommons
P2P Foundation: Cryptoequity: http://p2pfoundation.net/Cryptoequity
Facebook and FarmVille: A Digital Ritual Analysis of Social Gaming
https://www.academia.edu/3525736/Facebook_and_FarmVille_A_Digital_Ritual_Analysi
s_of_Social_Gaming
Getting Farm Work Done Legally With Interns, Apprentices, And Volunteers
http://farmcommons.org/tutorial/getting-farm-work-done-legally-with-interns%2C-apprenti
ces%2C-and-volunteers