blockchain in agriculture

One of the most talked-about technology today is probably Blockchain technology – the technology which makes bitcoin possible. However, Blockchain use cases are not limited to the financial sector, but also it has drastically transformed many other industries, including healthcare, real estate, law, banking, insurance, supply chain, etc. Not to mention, Blockchain in agriculture is another promising area which we cannot ignore at the moment. The size of blockchain innovations in the agriculture market is expected to grow from an estimated $41.2 million in 2017 to nearly $430 million by 2023, representing an impressive 47.8% compound annual growth rate (CAGR).

There are varieties of use cases of Blockchain in agriculture, which we will discuss in this blog. We can categorize use cases of Blockchain in agriculture  into the following types:

  • Crop and Food Production
  • Improved food quality control and safety
  • Food Supply Chain
  • Controlling Weather Crisis
  • Fairer payments for farmers

We will discuss each of the use cases in this blog, but there are two basic areas that we must know to understand it better. I have mentioned a brief overview of these in my previous blogs. Here are the points with references.

What is Blockchain technology?

What are the consensus algorithms that work behind Blockchain use cases and different types of Blockchain?

Use cases and their benefits of the Blockchain in Agriculture

Here is an Innovation Map from StartsUs Insights research blog that highlights the most promising application areas as well as a deep dive in each of the sections.

Use case 1: Crop and Food Production.

The world we live in today has an enormous demand for food, whereas there are plenty of challenges to supplying this ever-increasing demand to the growing population. Many factors work behind these challenges, and some of them are:

  • Climate change
  • Natural disasters like floods, drought, loss of biodiversity, pests, diseases, Desertification
  • Crop yielding
  • Financial disputes with farmers
  • Transparency in the supply chain process

How Blockchain can help to increase crop and food production?

To explain that first, we have to remember that today’s agriculture has welcomed many modern technologies like Big data, IoT, Machine learning, etc., to improve the process, and it has turned into smart farming. Many agricultural processes are automated nowadays, which use sensors or, in more technical terms, IoT devices that generate data and then get cleansed and enriched by Big data analytics tools.

Furthermore, at this step, the meta-information like timestamp, demography, type are added to it. This cleansed and reformatted data is then fed to machine learning algorithms to make it more insightful through predictive modeling.

Several predictive factors like Crop Quality Recommendations, Crop Identification, Crop Yield Prediction, GrowScore (Automated crop growth factor), and Crop Demand Prediction. etc. Finally, this highly informative data get saved to Blockchain IPFS (Interplanetary File System) or distributed storage systems.

So, in this overall process, the benefits of using Blockchain in agriculture are as follows:

  • Through data Enrichment more value is added to the captured information. Hence, it improves data quality.
  • Since data is stored on the Blockchain, that makes compliance enforcement more seamless.
  • Data compliance with IoT data conforms to security measures.
  • Machine learning feed to the captured data helps to improve the irrigation system with enhanced data.
  • Enables agriculture market stakeholders such as growers, innovators, producers, service providers, and retailers to access it transparently.
  • In Blockchain, data is distributed. Hence, it prevents a central authority from controlling the system. As a result, there is no chance of a single point of failure.
  • Smart contracts facilitate the exchange of data stored on the Blockchain. Since information will be visible to every agriculture market participant, it will become seamless to bring efficiency in crop or food production.

Use case 2: Improvement of Quality Control and Food Safety.

With Blockchain in agriculture, you can get increased transparency to the supply chain. This automatically removes ineffective processes and ensures quality control optimally. For example, each year, crop failure is a repetitive issue faced by farmers around the globe. Climatic adversity is the main reason behind it. To solve this, precision agriculture is a concept that companies like IBM invest in, which implement IoT devices to monitor weather conditions like pests, irrigation, soil condition, etc.

When these devices are connected to the Blockchain ledger, results are updated continuously and in a real-time way, which is also viewable on the phone. Hence, in case of any unusual, farmers are notified immediately.

Use case 3: Food Supply chain.

Blockchain in agriculture brings transparency to this process by becoming a viable solution. With smart farming, Blockchain can store the information related to the crop like crop quality, type of seed weather conditions under which the crops were sown.

You may find this article helpful – How Blockchain Will Transform The Supply Chain Industry.

Similarly, if the crop has been transported to the refineries via IoT enabled vehicles, it is easier to save which temperature they have undergone. This is useful during the bidding of food processing companies. At the same time, it ensures whether the supplied food item is quality or not. The same process can be followed during the supply of processed food to wholesalers and retailers.

This traceability practice applies to the consumer also. They can backtrace the information like –

  • farm origination details
  • transportation details
  • batch numbers
  • food processing
  • factory data
  • expiration details
  • storage temperature

At the same time, as the traceability of the supply chain increases it will have a considerable impact on:

  • reducing fraudulent issues with food
  • false labeling
  • eliminating intermediaries out of the process 
  • ensuring food producers get paid timely
  • enabling consumers to understand what they’re paying for.
  • record and update the status of crops by the farmers
  • tracking farmers through the process of planting, storage, harvesting, and delivery

Use case 4: Controlling Weather Crisis.

Unpredictable weather conditions and lack of transparency in the food chain system often face farmers with high surge and unclear price rising. On the contrary, consumers don’t understand when the crops suffered horrible weather conditions and the reasons for the increased costs. With its transparency and traceability, Blockchain in agriculture gives a clear understanding of the matter to the farmers and other stakeholders. Now how does this happen?

With smart agriculture, you can place agricultural weather stations within farms to generate crucial information about the weather that can direct crops’ behavior. Through this system, farmers can monitor any of the following data:

  • air temperature
  • rainfall
  • relative humidity
  • wind direction
  • soil temperature at different heights
  • atmospheric pressure
  • leaf wetness
  • wind speed
  • dew point temperature
  • solar radiation

The above data is stored in Blockchain so that any authorized entity can access it transparently. So, based on the above data, farmers can take appropriate measures, including crop insurance arrangements. Besides, they can get compensation seamlessly and quickly.

Use case 5:  Better Payment systems for Farmers.

It is a common fact that farmers often face problems getting paid on time. With traditional payment mechanisms, it takes weeks for farmers to receive full payments, and often it takes a chunk of the farmer’s earnings. Blockchain-based smart contract works as an ideal fit here.

Smart contracts trigger automatic payments as soon as a specific, and previously-specified condition has been fulfilled. This happens without charging excessive transaction fees. Theoretically, farmers receive compensation for their goods as soon as they are delivered. There is no chance of their income being taken away from them in the process.

Many farmers also face issues during selling process at a fair price as intermediaries enjoy most of the profits while doing a minimal amount of work in comparison. Smart contracts would eliminate intermediaries’ requirement, as it would allow farmers to connect directly with retailers. Therefore, they’d be able to receive a fairer price for their goods.

Final Words:

Blockchain in agriculture is a technology today that can re-engineer many existing agricultural processes, from tracing the food origin, tracking the customer demand, settling transactions to creating new marketplaces. However, as Blockchain technology is being developed rapidly, it is also necessary to stay informed about its innovations and progress in the agriculture sector to stay ahead of your competition.

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