If you have ever used Airbnb you will understand the concept of Reputation Capital and its significance.
If you stay in a house or a flat through the Airbnb platform, you; as the guest, provide a rating to give an indication of the quality of the experience that the host has provided you with. However, what is interesting about this platform (and others like it) is that the host will also have an opportunity to rate you, as a guest.
Both sides of the market in this interaction have the opportunity to rate the other side. Your host has the power to either burnish or damage your reputation as a guest, just as you have the power to do the same to theirs.
Other platforms and marketplaces such as Uber and EBay use similar concepts. The intended outcome is to create an environment of trust in which it is easier for strangers to collaborate with each other for mutual gain. Most people want to continually achieve a good rating and thereby enhance their reputation capital.
Rachel Botsman has spoken about this in a really interesting Ted Talk which I highly recommend.
It is a fascinating example of capitalism in action in the Digital Age. Capitalism has always been a mechanism which enabled strangers to co-operate with each other and these digital platforms have enabled that to become explicit and conscious. Watching Rachel Botsman’s talk, I began to think about how this could be applied to farming once the operation of managing the soil to produce food becomes a truly digital process. I believe that digitisation could enable a future in which the reputation capital of the farmer is one of the most valuable aspects of the farm.
Blockchain will also play an important role in this. Once the farmer’s field becomes a truly digital product, we will be able to understand the field on a plant by plant basis. We will understand the health status of every single plant, know how that plant has been treated with chemicals or fertiliser, in specific amounts and with specific justifications for each treatment. We will be able to predict with a far higher degree of accuracy what the likely yield of that plant is as it grows, and we will be able to use blockchain technology to create complete traceability of an individual plant, maybe an individual grain, from field to store to processor to end user.
Ultimately blockchain will enable the disintermediation of the food supply chain, increasing transparency and shortening the distance between grower and consumer. This will represent a radical change in the industry and I believe a truly positive one for both farmer and consumer.
And this is where Reputation Capital becomes so important....
The farmer will be able to build up a reputation for their farming ethos, the way they make use of the new digital tools of the future (such as those being created by Small Robot Company) and the quality of their output.
The customer will be able to connect with farmers using a transparent platform and have a more direct say in where their food comes from.
They will say;
“I love the way Bob grows his wheat - I’m going to put my name down for a few square metres of Bob’s wheat to have my bread made from this year.”
“I’ve always loved Jane’s strawberries - I’m going to make sure I get some of those delivered to me for this weekend.”
Now in both of these instances, there will be an element of processing and packaging that takes place before it reaches the customer. Possibly this is something that the farmer has developed in-house or possibly it is something that they may use a third party for.
If the latter, then these processors and packagers will also be subject to the same market forces and the same reputation capital, both from customers and suppliers.
When the bread and the strawberries get delivered to the customer, the customer will provide a rating which hopefully enhances the reputation capital of the growers and the processor. Importantly, and fundamentally different to the market place in which farmers operate today, the growers will also be able to rate the customers and the processors for the quality of experience that they have provided.
When farming becomes a truly digitised industry, the way that the industry operates is going to change significantly.
In the future, a farmer’s reputation may become just as valuable to them as their land.
How do you think digitisation will change the way we manage our farms and think about where our food comes from?
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