How democratic governance, collective ownership, and circular token economics can be used to create decentralized food networks — a research proposal.

Various forms of networks. Blockchains can facilitate in creating more peer-to-peer decentralized networks.

Introduction

It can be argued that the sustainable food transition towards decentralized and regional food economies is one of humanity’s most pressing challenges (Satterthaite et al., 2010). Like the energy transition, in which energy production and consumption is being changed from a centralized production and distribution model to decentralized smart mini-grids, a similar trend is emerging in the agrifood industry. The current industrialized agrifood regime is arguably unsustainable (Johnson, 2015; Pollan, 2009; Satterthaite et al., 2010; Sedghi, 2013; van Staalduinen, 2014), especially when taking into account the estimated increasing global population and rapid urbanization by mid-century (Alexandratos & Bruinsma, 2012, UN DESA, 2014; UN DESA, 2015, Wagner, 2008). Hence, short food supply chains (SFSC) via decentralized food networks and regional food economies have been proposed as a possible solution for a sustainable agrifood industry (De Schutter, 2010; Groesbeek, 2009; Kneasfey et al., 2013; McIntyre et al., 2009).

Innovation can be defined as the novel combination of existing ideas, processes, services, and products (Keeley & Pikkel, 2013). The aim of this study is therefore to understand three complementary and novel developments for circular food innovation: platform cooperatives, decentralized food networks, and blockchain-based information systems. By learning more about the combinational impact of these technological developments, this research project can generate valuable insights that contributes to achieving circular and decentralized food innovation in cooperative networks.

Cooperativism is about democratization of ownership, governance and value. Credit: https://open.coop

Platform cooperativism

The concept of platform cooperativism has been proposed by Scholz (2014), as a reaction to the dependence of digital tools and platforms in modern society. Since the arrival of the smartphone in the late 2000s, many interactions in both a professional setting and in private life are facilitated by online platforms and apps. This digital economy is mostly enabled by a range of platforms that are owned, governed, operated and regulated by profit-maximizing companies and data-collecting governments (Hill, 2016; Fonseca, 2016). The value that is generated through these fundamental digital environments flows towards a handful of firms and their shareholders, as well as governmental intelligence agencies, essentially exploiting the users that make the network possible.

As a response to this form of digital capitalism, platform cooperativism “is about cloning the technological heart of online platforms and puts it to work with a cooperative model, one that puts workers, owners, communities, and cities — in a kind of solidarity that leads to political power” (Matias, 2015). Scholz (2016a) argues that “[platform cooperativism] is bringing together 135 of workers self-management with 170 years of the cooperative movement […] bring[ing] in the commence based peer production together with those into this digital economy”.

Scholz proposes two main tenets within the platform cooperative paradigm: communal ownership and democratic governance. In practise this refers to creating shared value and community wealth through a digital interface that is owned and self-governed by its users, communities and regional networks. As a result, the profits that are made in this decentralized economy flows back into the community and the platform users instead of to a handful companies in Silicon Valley.

“Platform cooperatives — as a direct affront to the platform monopolies characterizing digital industrialism — offer a means of both reclaiming the value we create and forging the solidarity we need to work toward our collective good. Instead of extracting value and delivering it up to distant shareholders, we harvest, circulate, and recycle the value again and again. And those are precisely the habits we must retrieve as we move ahead from an extractive and growth-based economy to one as regenerative and sustainable as we’re going to need to survive the great challenges of our time” (Rushkoff, 2016).

A great book on Platform Cooperativism

Blockchain technology and the digital commons

The second innovation that plays an essential role in decentralized (food) networks is blockchain technology, as it allows to transfer value over the internet (Tapscott & Tapscott, 2016). Bollier (2016) argues that open platforms, which have become integrated in private and working life, should be changed into digital commons to manage shared wealth. The digital commons refers to the distribution and communal ownership of informational resources and technology (Stalder, 2010).

“One instrument for converting open platforms into digital commons is the blockchain ledger. The blockchain ledger is significant because it can enable highly reliable, versatile forms of collective action on open networks. It does this by validating the authenticity of a digital object (for example, a bitcoin) without the need for a third-party guarantor such as a bank or government body” (Bollier, 2016).

Collaborative blockchain-based data systems in the food supply chain is arguably an important contributor towards realizing sustainable and transparent food industries. IBM’s private blockchain solution, Hyperledger, is being implemented by Walmart to increase efficiency, traceability and food safety in their supply chain (Yiannas, 2017). Additionally, the EU is actively working towards an “Internet-of-Food”, in which Internet-of-Things (IoT) technologies are leveraged to connect and digitize the complex food system (IoF2020, 2017). By integrating the data streams of the dozens of network actors in the same supply chain, food commodities can become traceable, quality controlled, and more efficiently distributed, leading to a fairer, safer and more circular food economy (Ambrosus, 2018; Branimir et al., 2017; Te-Food, 2017).

Tokenization and circular token economics

Moreover, the blockchain-based decentralized networks can be fueled by tokenization in circular token economies. Tokenization can be defined as the representation of value in an digital asset, a token. In the words of Sneider (2017): “Digital tokens are designed to be scarce; they are not copied when traded […] they reward users for their involvement and enable them to trade that reward for a benefit”. Kelly (2008) argues that the internet is designed to copy information. However, “when copies are super abundant, they become worthless. When copies are super abundant, stuff which can’t be copied becomes scarce and valuable” (Kelly, 2008).

Hence, a limited supply of digital tokens which can be transferred but not copied due to the inner-working of blockchain technology, can lead to shared value creation and new circular economic models. This approach also allows for recirculation of the represented value in the tokens, thus creating circular ​token ​economies. Connected to the quote of Rushkoff (2016) above, the concept of circular economics can be applied to sustainability, in which valuable ‘waste’ and resources are continuously flowing through the network of actors (Sneider, 2018).

The Theory of a Blockchain Circular Economy, by William Mougayar

Decentralized food economies

The vision of sustainable nutrition, regional food economies and short supply chains may be realized via decentralized food networks. According to McNamara (2016), decentralized food networks “would democratize the food industry by dispersing small food hubs across the globe, bringing food production to regional communities. Minimizing the gap between consumers and producers is a critical step towards an environmentally and economically sustainable food system”.

Decentralized networks, such as the open source movement, often rely on a combination of volunteers creating community wealth and business activities in markets. “We also see it in the open source software revolution where there is dozens, hundreds of programs that rely upon communities volunteering to create new and interesting code, often in collaboration with proprietary software companies. So it is not necessary an either or proposition, it can be quite synergistic in creating value; one working in the market and through a community”. (Bollier, 2016, 12:13).

Blockchain applications for agrifood

Many projects are initiated to realize shorter food chains and peer-to-peer (P2P) economies, such as Delicia, an Estonian based blockchain start-up which aims to connect regional food producers, restaurants, supermarkets, and consumers in networks with the main goal to reduce food waste (2018). Other European start-ups like Ambrosus, OriginTrial, and Te-Food are creating the blockchain-enabled data infrastructure for traceability and food safety in the supply chain, and Dutch start-up Fructus aims to create a blockchain-based marketplace where farmers can directly interact with consumers (Fructus, 2018). Additionally, Backfeed and Odyssey are creating blockchain platforms as well as protocols for decentralized cooperation and decentralized sharing economies respectively, tools which can be leveraged to create open networks of food cooperatives. It can thus be argued that various aspects of the agrifood sector are rapidly being digitized, contributing to decentralized food networks and short food supply chains.

Literature review

The body of literature on platform cooperativism as well as blockchain-based food supply chains and decentralized food networks is still in an early stage. Goodman et al. (2012) state that the European Union is making policies for more decentralization in the agricultural industry, for instance in policymaking, multifunctionality and territoriality, arguing that alternative food networks (AFNs) are important for fairer, sustainable and resilient food systems. According to research by Sauvée (2012) on decentralized network governance, “operational decisions may be decentralized at different levels within the network, while control and incentive mechanisms rely upon totally decentralized means” (p. 11). Yet, centralized decision making over strategic assets is advised to main strategic coherence over time. Additionally, the research on traditional food cooperatives is plentiful (Knupfer, 2013; Yang & Woods, 2014), and the literature concerning platform cooperativism is emerging (Scholz & Schneider, 2016; Scholz, 2016b). However, knowledge is lacking regarding the combination of circular economies, platform cooperativism, food cooperatives, and blockchain-based decentralized food networks.

Research aim and questions

This research aims therefore to fill this knowledge gap by studying various approaches and dimensions within platform cooperatives for creating sustainable food economies with shared value-such as its democratic governance structures, collective ownership and business models- as well as the formation of blockchain-based decentralized food networks for short supply chains. Possible research questions can now be formulated as follows:

Which types of traditional food cooperative models can be identified to form platform cooperatives in decentralized food networks?

What is the role of blockchain technology in creating decentralized food networks?

What is the role of self-organized digital commons in creating decentralized food networks?

How can tokenization and circular token economics play a role in the network to create shared value?

By conducting this research, a better academic understanding can be gained regarding the decentralization of the food economy in the coming decades. Additionally, due to an engaged scholarship approach in this study, it is aimed to achieve societal and practical relevance by engaging various stakeholders in the existing regional food networks in the Utrecht area of the Netherlands via semi-interviews in which knowledge can be shared. The proposed research aims to contribute to valuable insights in the complementary fields of decentralized food networks, blockchain technology, and platform cooperativism to realize short food supply chains.

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About the author

Menno van Ginkel has been studying innovation and exponential technologies since the early 2010s. He is now focused on sustainable food, decentralized networks and blockchain technology.

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Have I forgotten trends, cool interesting start-ups, or developments? Or do you have identified flaws or bias in my story and reasoning?

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