It's fast becoming evident that the blockchain technology is about a lot more than just Bitcoin. Across many sectors like healthcare, finance, government, media and more, innovative applications are cropping up every day. The blockchain technology is going up against technology that’s ripe for replacement and decades-old, by being tested in a whole lot of ways. Let’s take a look at how it’s influencing the agriculture industry.
What aspects of Blockchain technology could the agriculture community adopt?
Food supply chain
Due to information asymmetry, food supply chains in most developing nations are inefficient. As farmers do not get their due share, this leads to low farmer income, even though they are the food producers, the most critical part of the chain. The supply chain for food becomes a lot more simple with the blockchain, as data management over a complicated network including brokers, farmers, processors, distributors, regulators, retailers, and consumers becomes transparent and simplified. In this way, so far, the Blockchain has been most handy in the agriculture sector in understanding the journey and source of produce, giving consumers confidence in the knowledge of exactly where produce they buy comes from while allowing farmers to negotiate fairer rates throughout the supply chain. When taking the growing lack of trust in the sourcing of produce sold in markets into consideration, this is a key aspect.
Checking the authenticity of agriculture-inputs
Often, the farmers are unaware whether the inputs they are buying are authentic or not. To increase their profit margins, local level retailers are selling fake products to farmers. Sometimes, even the retailers are unaware whether the products supplied to them are authentic or not. Due to pilferage or duplication which impacts their brand image, big agriculture-input players are also losing millions of dollars. From manufacturer to the end buyer, by increasing the traceability of each product sold, the blockchain application will solve this problem. By just scanning the blockchain barcode on their product through their mobile, retailers and farmers can understand the source and authenticity of the products they are buying.
To maintain accountability, it is essential for agricultural concerns and smallholdings to be able to keep track of their contractual obligations with suppliers, buyers and other stakeholders and transactions. This minimizes fraud, maximizes transparency, and ensures that each link in the supply chain is satisfied. The link between farmers and commodity buyers can now be monitored more closely, and distribution channels streamlined yet further.
Firms operating within the agricultural sector often have extensive contractual obligations to a multitude of stakeholders, and many FinTech innovations, notably the Blockchain, can have a beneficial impact on contracting, particularly in areas such as hedging contract and pre-sales of harvests.
Data monitoring is one of the most visible uses for Blockchain. Now, to assist them with planning their spaces more efficiently and maximize the rate of success with their harvests, farmers have an opportunity to capture data in real-time. For wireless sensors for instance, with all of the data recorded onto the Blockchain, it can be integrated into fields to monitor crop growth, harvesting, and subsequent yield. This information, over time, will become an invaluable resource to the farmer.
Minimising human error
There are many ways in which Blockchain can take tasks away from the workforce and automate them to minimize errors. Often, it is an individual mistake that causes financial and physical losses in the agricultural sector, and so adopting technological innovations can reduce the amount of resource that is wasted or misused.
Based on weather, demand and global production levels, with crop prices fluctuating wildly, the blockchain can provide an easy solution for both suppliers and buyers looking to negotiate a fair price for their product. By giving access to information to both parties on similar transactions and on the present stock price of goods, suppliers in rural areas can also ascertain what their harvest is currently worth. This way they can sell it to distributors at a price which reflects global market conditions.
While in rural areas, the agriculture industry has been the most significant sector, providing a means for seventy percent of the world’s poor, it also happens to be the industry with the most considerable disconnect between retailer and supplier. However, using Blockchain, we can establish a more direct link, allowing retailers to ensure that they are getting what they’ve paid for and making sure farmers receive better pay for their products. Further, through the exchange of digital products and currency, the agricultural industry can see the increased global exchange of produce. This can affect all from rural farmers who are selling to big nations who need to track their aid relief accurately to consumers across the globe, leading to the fairer distribution of currency and goods among the most deprived areas of the world, as well as increasing agricultural models that are community-based on a global scale. There’s such a buzz around blockchain as there is massive potential in it. This, of course, does not mean all drives seeking to modernize needs to involve the blockchain, even if it sometimes seems that way these days.