West Australian Grain handler the CBH Group is investigating the potential of using blockchain technology to sell grain.

The Co-operative will complete a trial sale of a few loads of organic oats out of its South Australian company Blue Lake Milling with the help of agtech startup AgriDigital.

Blockchain was first used as the core component of the digital currently bitcoin where it works as a public ledger for transactions.

According to AgriDigital blockchain is a list of linked records, or blocks, that can never be changed, edited or deleted. The information is shared with all participants in the transaction in real-time making it a transparent way to transfer value.

AgriDigital Chief Executive Emma Weston said for sellers of agricultural commodities the technology sped up payment and removed the risk of non payment by using computer code to handle sales transactions.

"Once the farmer actually makes the physical delivery the code recognises that delivery has taken place and is able to then make a payment straight away to the grower," Ms Weston said.

Three real benefits

CBH Chief Executive Andrew Crane said the pilot, which would take place next week, was the first of several new projects looking at emerging business technology.

"Blockchain can be used in a range of different ways be it smoothing out transactions, better security or quicker payment methods or as a proof of where the grain has come from and where it's been on its journey through to the customer.

"These are three real benefits there and we are testing all of those," Mr Crane said.

Ms Weston said providing a record of the grains provenance was a key value of the technology for agriculture.

"That is paddock to plate transparency.

"We are looking at being able to track from farm all the way through Blue Lake Milling as a processor, to the buyer of those oats and being able to prove that those oats have not only come from a particular origin but also their organic status in this case," she said.

CBH is owned and controlled by more than 4,000 West Australian grain growers. The Co-operative said the blockchain trial will cost tens of thousands of dollars and will be expanded to other commodities if it is assessed as effective.