Decentralization and the Future of Corn

How LandX is Addressing Industry Challenges with xCORN

As the world’s population continues to grow, demand for food and renewable energy is expected to increase significantly in the coming decades. Corn is a vital component of meeting this need — but there are challenges that must be addressed in order to keep up with rising demand. We look into corn’s increasing popularity and challenges, as well as potential solutions from LandX & xCORN, which provide an alternative chain supply within an ecosystem benefitting stakeholders at all levels: farmers, investors, retail consumers alike.

Corn has firmly established itself as an indispensable agricultural commodity, with the majority used as animal feed and biofuel for cars. It’s a versatile commodity used widely in pre-packaged food and products such as Coca Cola, Kellogg’s cereal, shampoo, aspirin, diapers and even toothpaste.

A lucrative crop with high yield capabilities, large companies have capitalised on this by dominating its value chain — pushing production to unprecedented levels driven primarily through meat consumption increases worldwide and government policies such as America’s ‘Renewable Fuel Standard’ (RBS). As inflation pressures take hold around the globe along with supply shocks of other staples like soy and wheat, corn prices are liekly set to rise over the long-term.

The demand for corn has skyrocketed even with production doubling globally in the past decades.

Animal Feed & Increasing Meat Consumption

With rising incomes and growing populations, the demand for meat is on the rise — particularly in developing countries. To meet this increased demand, producers of processed animal feed rely heavily on corn (along with soy) as a primary ingredient due to its high energy content and relative stability compared with other grains. Prices remain relatively low and corn feed is easily accessible which adds to corn’s appeal; however fluctuations may lead to volatility within the markets.

With ever-growing demand for food, the challenge of sustainably producing corn remains a pressing issue. Inefficient fertilizer practices and overuse of pesticides across many regions can cause environmental harm while also contributing to greenhouse emissions — yet it is only through these methods that so far we have seen any substantial supply in animal feed. To address this dilemma several solutions have been put forward, including:

• improving livestock sustainability through precision animal nutrition (reducing nitrogen by 40% and decreasing protein needs by 25%)
• using alternative feeds such as barley, sorghum, flaxseed, coconut meal etc
• use of feed enzymes
• advising people to eat less meat and consumer a wider variety of proteins in their diets (examples put forth include insects, chickpeas etc)

Biofuel Mandates

Biofuel mandates in the USA have had a ripple effect on biofuel markets around the world, with countries such as Vietnam, Malaysia and Indonesia now requiring a certain percentage of transport fuel to come from renewable sources such as corn, palm and other vegetable oils.

Despite the potential for ethanol to reduce carbon emissions compared to gasoline and diesel, there are serious environmental concerns associated with corn’s unsustainable farming practices that arise when developing this form of energy source.

Environmentalists have argued that, while ethanol reduces CO2 emissions from vehicles and increases energy independence, its large-scale production has come at a significant cost — the destruction of vast acres across US habitats. We have seen this happen with the Renewable Fuel Standard, that has incentivized corporate farms to prioritize corn over native grasslands, leading to a stark loss in biodiversity with lessthan 5% remaining untouched.

Coupled with projected rapid biofuel growth through to 2028, it’s vital that eco-friendly alternatives be thoroughly examined before taking any further steps forward in the development process itself.

Risks of Corn Centralization

Consisting of the corn supply chain

The corn supply chain is a complex and interconnected system that involves a vast network spanning farmers, processors, manufacturers and consumers around the globe. Despite this complexity, the corn supply chain is mostly dominated by a few influential conglomerates. This heavy centralisation opens up avenues to considerable risks, including:

• negative impacts on smaller farmers, who earn less
• unstable food supplies — due to less farms spread out in different locations, resulting in greater risks of crop failure from drought and climate change
• interventions from government or company policies
• lack of transparency and accountability in the supply chain
• unsustainable farming practices decided by those in charge looking for greater profits, which can also lead to more environmental issues

The Traditional Corn Supply Chain

While the United States is by far the largest producer, exporter and consumer of corn globally, just four companies control more than half of its processing market. This together with China’s production dominance means that a mere two countries make up for 56% of global output in this sector.

Such consolidation can have serious implications on small farmers within their supply chain as large conglomerates possess greater power to set prices or terms which may be unfavourable or predatory. This can disincentivize landowners to take part in farming, as they are not rewarded fairly for their hard work.

A lack of transparency through the supply chain has left farmers, stakeholders and consumers vulnerable to unfair practices, with no way to verify sustainability or who they are dealing with. Establishing a unified system that tracks the full extent of the supply chain (made possible with blockchain technology) can help ensure fair treatment for all whilst promoting sustainable solutions.

The United States produces 34% of the world’s corn, followed by China at 22%.

What are the solutions?

There have been several responses so far to counter the environmental issues stemming from the over-production of corn. For example, the Planning and Conservation League has advised that biofuels also be made from sources other than corn (such as plant waste or algae) and that only a limited share of ethanol can be used to meet renewable targets.

The International Renewable Energy Agency (IRA) has also offered a guide for raising the yield of corn in a sustainable manner, together with reducing food waste and utilising residues for biofuels. Their research has also shown that regions outside the US and China, such as Southeast Asia, have significant potential to produce liquid biofuels sustainably using biomass feedstocks that do not emit carbon dioxide or interfere with food supply. These feedstocks could include agricultural waste, forestry residues, and algae, among others. By leveraging these resources, it is possible to meet the growing demand for biofuels while minimizing negative environmental and social impacts.

In addition to solving corn’s environmental issues, LandX looks to solve issues arising from centralization of corn and other agricultural crops.

LandX and xCORN

LandX is revolutionizing the agricultural sector by tackling environmental issues and decentralization of corn and other crops. Investors can now easily view any transaction along the supplychain thanks to LandX’s blockchain-based ecosystem, creating a level playing field with increased transparency & trust among all stakeholders within it — from farmers to validators & investors alike.

Furthermore, an innovative revenue model adds sustainability in perpetuity through the LandX Choice grants, where part of platform fees generated on the protocol go back into funding research and farming innovations to help farmers discover more efficient and sustainable ways to produce crops and conserve topsoil.

Modernizing the corn supply chain.

LandX’s new agricultural model positions farmers and smaller investors at the forefront, empowering them to make decisions within a decentralized autonomous framework. This shift away from centralized power promises an array of benefits such as increased arable lands, crop production and food supplies; ultimately contributing to global nutrition while sustaining our planet for generations ahead.

More about LandX:

LandX perpetual vaults provide investors inflation hedged returns backed by a legal contract secured on underlying farmland. LandX makes perpetual vaults available as a liquid digital asset — xToken, offering investors uncorrelated, inflation-hedged diversification.

To find out more about how LandX is working to build a healthy economy for corn and other agricultural products visit: www.landx.fi/