Impact of Blockchain in Agriculture – A Complete Guide for 2020
Blockchain is an emerging digital technology allowing universal financial transactions among distributed untrusted parties, without the need for intermediaries such as banks.
These case studies examine the impact of Blockchain in Agriculture and the food supply chain, present existing ongoing projects and initiatives, and discuss overall implications, challenges, and potential, with a critical view over the maturity of these projects.
Potential Use Cases for Blockchain in Agriculture
An overview of how blockchain is being used to improve food and agriculture supply chains around the world:
1. Food Safety
Ensuring food safety is the utmost priority in Blockchain in Agriculture.
It is the area where almost all the measures have already been taken because there is clear vested trust from both the producers and consumers.
IBM along with Walmart has already started leading the charge in this capacity because consumers were getting infected from the last several years after consuming contaminated food and water.
They have started building and following the protocol that has been used in food safety and security.
It will be helpful in bringing transparency in the supply chain of the food and removes the poor processes being followed till now.
This ensures ideal conditions from farm to market, and we can pinpoint source quickly in the event of a food safety outbreak.
This could save time, money, and lives.
As the word suggests, the quality of having a course or development.
Here it means tracing the quality of the food where it is grown and where the food is coming from.
It ensures companies to quickly track unsafe products back to their source and see where else they have been distributed.
This prevents people from sickness and saves lives and also reduces the price of production.
Big names companies like IBM have started their food trust initiative along with Walmart.
It also includes big names companies such as Dole, Driscoll’s, Kroger, Nestle, Tyson, and Unilever.
Frank Yiannis of Walmart has said that IBM has taken the initiative to trace a mango from the store back to its sources from seven days to 2.2 seconds.
This initiative has helped in finding out the poor supply chains and clearing ill products before they are consumed and cause sickness.
3. Weather Crisis Control
Smart contracts help in controlling the weather crisis.
Farmers have to face unpredictable weather conditions throughout the year.
For reducing the risk of crops to get damaged and monitoring them Blockchain in Agriculture technology can be crucial for better crop survival.
In heavy rains, the chances of crops being spoiled are the highest.
It becomes difficult for grown crops to handle heavy rains and floods.
Farmers must have an idea when the crops would be affected the most but when it comes to consumption, the consumers are never aware of when the crops have suffered heavy rainfall and poor weather conditions.
Also, how the prices of crops are being struck in the market.
It is possible for the involved members in crop harvesting to trace the weather conditions from theBlockchain in Agriculture solution, farmers can quickly request and receive insurance claims through smart contracts.
4. Services in managing agriculture finances
Credential records and agreements need to be transparent and it is lacking between smallholders and financial inclusion.
They are being confronted with such problems.
Financial services not only help in investing in farming but also ensures them in resolving liquidity constraints.
It becomes difficult for the buyers in such cases to pay farmers and it makes farmers sell the crop at a relatively low rate.
With Blockchain in Agriculture technology, the agricultural finance process becomes more transparent and fair and enables shared control accessibility.
The agriculture industry needs to do a lot of work to grow trust in the eyes of buyers or consumers by ensuring the quality of the food.
Blockchain in Agriculture is the future and its solution holds a lot of promise for the agribusiness industry with its ability to bring transparency.
5. Agriculture Insurance
Providing low cost agriculture schemes are increasingly viewed as a measure taken to protect the number of people being affected by the floods or droughts and helping them in reducing the impacts they suffer as a result of such events.
Even today the number of poor people is still low in order to take up agriculture insurance.
For smallholders validating claims and effecting payouts is still time-consuming and this is one of the reasons for index-based insurance not being chosen as the first risk mitigation strategy.
Index insurance which is based on smart contracts works efficiently.
They can easily simplify the process thereby providing instant payouts for worse weather conditions whereas automated data feeds provide continuous and reliable hyperlocal data to the contract thereby eliminating the need for on-site claim assessment by the surveyor.
For instance, systems in Asia pacific region range from
- Major public sector programs of India and the Philippines
- Public-private partnerships in China and the Republic of Korea
- Private markets in Australia and New Zealand
- Non-formal private mutual and community-based crop and livestock initiatives in Bangladesh, India, and Nepal.
Anyone who has worked in the agricultural supply chain knows the challenges that come with logistics.
Dealing with products that often have a very short shelf life in uncertain conditions in high quantities with a lot of dollars on the line.
Also, often the supply can be uncertain.
Companies are playing a central role in the logistics network of the future, built on blockchain technology.
As we see this taking place, no doubt agriculture is the next thing.
Must Read – Blockchain In Logistics
7. Green Climate Bonds
They were created to fund those projects which have positive environmental and climate benefits.
As an increase in bond value, it should be necessary to track, trace, and verify measures to help increase investors’ trust in climate-smart initiatives.
Blockchain in Agriculture offers carbon credits and trading which could benefit them.
For example, IBM works with Veridium to tokenize carbon credits that are verified by third parties according to international standards.
These are then used to incentivize companies to be more environmentally friendly and to offset their carbon footprint.
8. Marketplace Creation
One challenge for commercial food companies is sourcing quality ingredients in sufficient quantity.
Farmers may not know who the big customers are or what end customers are looking for.
Previously, intermediaries had a major role in controlling a significant percentage of profits.
Blockchain in Agriculture allows buyers and growers to connect directly, increasing the number of profits that go to the farmers, and investors to invest directly into farms producing commodities and then trade on that investment.
For example, Avenues-GT is an Israeli-based company that has created a trading platform that allows commercial buyers to find growers who have what they need.
Their first projects allowed coffee-buyers to find coffee growers in Rwanda, and cattle farmers in South Africa to find alfalfa to feed their animals, request a digital quote, and manage payments all within the Avenues-GT platform.
London-based Binkabi has created a commodity marketplace that reduces foreign exchange expenses and increases profits.
While most wine industry initiatives using blockchain are focused on traceability and authenticity, Vin-X is a platform for trading wine futures.
Wineries can receive funding directly from consumers, enabling them to develop relationships directly with their customers and reducing the stress around the often multi-year gap between receiving funds and sales.
Cryptic Ocean is a blockchain technology company that provides end-to-end blockchain development and blockchain consulting services to multiple business domains.
Our goal is to help companies adopt new technologies and simplify complicated issues that arise during technology evolution.
Contact us for the best solutions about the use of blockchain technology to solve the toughest challenges faced by the world today.
How can Blockchain be used in agriculture?
Linking agricultural shipping and monitoring processes using a shared, decentralized blockchain ledger adds value to agricultural products because machinery, crops, and livestock can be traced by the recipient to prove quality and ethicality and therefore assign
How does Blockchain affect the supply chain?
The real-time tracking of a product in a supply chain with the help of blockchain reduces the overall cost of moving items in a supply chain.
Payments can be processed by customers and suppliers within the supply chain by using cryptocurrencies rather than customers and suppliers rather than relying on EDI.
How do you use Blockchain in the supply chain?
Blockchain helps organizations understand their supply chain and engage consumers with real, verifiable, and immutable data.
Transparency builds trust by capturing key data points, such as certifications and claims, and then provides open access to this data publicly.
What is an agri supply chain?
An agriculture supply chain system comprises organizations/cooperatives that are responsible for the production and distribution of vegetable/Fruits/Cereals/Pulses or animal-based products.
In general, we distinguish two main types:
1.‘Agriculture food supply chains for fresh agricultural products’ (such as fresh vegetables, flowers, fruit).
In general, these chains may comprise growers, auctions, wholesalers, importers and exporters, retailers and specialty shops, and their input and service suppliers.
2.‘Agriculture food supply chains for processed food products’ (such as portioned meals, snacks, juices, desserts, canned food products). In these chains, agricultural products are used as raw materials for producing consumer products with higher added value.
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