The '
Danish Sugar Beet Auction
'' was the first large-scale and practical application of

secure multi-party computation Secure multi-party computation (also known as secure computation, multi-party computation (MPC) or privacy-preserving computation) is a subfield of cryptography with the goal of creating methods for parties to jointly compute a function over their ...

, which took place in January 2008. An electronic

double auction A double auction is a process of buying and selling goods with multiple sellers and multiple buyers. Potential buyers submit their bids and potential sellers submit their ask prices to the market institution, and then the market institution choos ...

was successfully run by a multiparty computation involving representatives of Denmark's only

sugar beet A sugar beet is a plant whose root contains a high concentration of sucrose and that is grown commercially for sugar production. In plant breeding, it is known as the Altissima cultivar group of the common beet (''Beta vulgaris''). Together with ...

s processor (

Danisco Danisco A/S is a Denmark, Danish bio-based company with activities in food production, enzymes and other bioproducts as well as a wide variety of pharmaceutical grade excipients. It was formed in 1989 from the largest Danish industrial merger e ...

), the Danish sugar beet growers' association, and a research group responsible for implementing and running the computation. Due to

European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are Geography of the European Union, located primarily in Europe. The u ...

sugar market policy reforms which reduced sugar

subsidies A subsidy, subvention or government incentive is a type of government expenditure for individuals and households, as well as businesses with the aim of stabilizing the economy. It ensures that individuals and households are viable by having acce ...

and lowered prices, as well as the recent closure of one of Danisco's sugar processing plants, the Danish

industry needed to reallocate production contracts to farmers nation-wide in an attempt to retain market efficiency. The decision made was to hold an electronic

to find the new market clearing price of sugar beets, where the role of the "auctioneer" was played by a computer program implementing a

(SMPC) between the farmers and Danisco. The use of SMPC not only reduced expenses of the

auction process An auction is usually a process of buying and selling goods or services by offering them up for bids, taking bids, and then selling the item to the highest bidder or buying the item from the lowest bidder. Some exceptions to this definition e ...

(when compared to hiring an external consultancy to run the auction), but also allowed farmers' bids to remain private from

, the only sugar beets processor on the Danish market and the seller of production contracts. This was important as farmers' bids can reveal their individual economic positions and productivities, which Danisco could have hypothetically used to their advantage when selling contracts. In a survey of the auction participants, 80% of respondents indicated that it was important to them that the bids were kept confidential. Aside from organizing the logistics of such a novel auction, the actual computation of the market clearing price and each bidder's positions only took about 30 minutes to complete. Ultimately, the auction resulted in the transfer of 25 thousand tons of production rights between farmers.

References

{{reflist History of auctions Food processing Beta (plant) Beet auction