Malaysia incentivizes its palm oil industry with Blockchain
Malaysia has been using Blockchain Technology in three of the country’s largest industries today, namely Renewable Energy, Palm Oil Industry, and the Islamic Banking Sector.
Palm oil has been in growing demand for over the last decade has driven a lot more attention and new ventures towards the industry. Malaysia currently accounts for 39 % of world palm oil production and 44% of world exports. If taken into account of other oils & fats produced in the country. As palm oil is the key income earner, this industry is set to thrive for the next 100 years.
Production of palm oil has become a popular way to meet global consumption for not only vegetable oils but as an everyday household commodity since the yield per hectare ratio is very high.
Palm oil is the biggest export business of Malaysia, accounting for nearly half, which is 43%, of the country’s agricultural income, according to official figures. Agriculture, just alone, contributes to 8.1% of the country’s GDP.
Hence the government brought out reforms in the structuring of this high revenue earning industry by integrating Blockchain Technology as it will help boost the economic situation of the country and make its functioning more transparent and contribute to environmental sustainability.
The Malaysian Industry-Government Group for High Technology, known as MIGHT, led an initiative to combine Blockchain Technology with the Palm Oil Industry for greater profits as there is a heavy reliance on the agricultural input.
- This will allow for a more sustainable supply chain network, as sellers and customers are now able to track the source of palm oil and monitor their transactions.
- Government and legal committees can also use the data to track the sources and modulate the industry for a more sustainable approach.
Recently, a group called SUSTAIN (Sustainability Assurance & Innovation Alliance) created by a number of palm oil industry leaders came up with their own plan.
The goal of this alliance is to establish a Blockchain-based palm oil platform to tackle landscape-level sustainability problems, as well as meeting goals related to NDPE (No Deforestation, No Peat, No Exploitation) which is very environmental.
Blockchain combined with this industry can be helpful in geographically locating the harvested fruit branches and can be utilised as a concrete support system for the same. This would help us get the stored information related to the palm oil workers identities and harvesting phases. This structure could also prove to be revolutionary as it will not only provide government agencies with better information regarding the employment status of the workers but also help policy maker’s gain and access more information about the farming practices. In its entirety, the overall conditions of workers who are working for or connected to this industry will improve.
Palm oil spoilage and wastage is one less known issue that propels up, but with this technology it can now be curbed. The spoilage takes place when it is improperly stored as palm oil has the propensity to react poorly to unsuitable surroundings. When this takes place, the oil is unfit for consumption and even usage as the amount of Free Fatty Acids (FFA) reaches a specific level.
Hence in ways mentioned above, a future-tech advancement like Blockchain is helping regulate an everyday resource like palm oil. Speculation is that in the future Blockchain Technology could be combined with IoT sensors to uncover more potential and revenue methods in this industry. There is so much to explore and the research is still on. World Blockchain Summit taking place in Kuala Lumpur from 27th – 28th of February, this year, aims to connect solution providers dealing with ledger based services to the local marketplace, in order to help Malaysia develop an implementation roadmap to utilise Blockchain as a solution to the aforementioned problems!
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