How Blockchain Technology Can Transform the Agriculture Industry?

Transparency is the major problem in the agriculture industry at present. The consumers and farmers are not aware of the market price, demand, and availability of goods in their area. There are a lot of middlemen (third parties) involved in the process of buying and selling of goods. 

The involvement of middlemen makes the process more complex and costly. The farmers get a very low rate for their products and the consumers need to pay high prices because they are not aware of the market supply and prices. 

What if you can check the quality and price of goods before buying it? You always want to check where the goods are produced. 

Here is the solution:

Blockchain in agriculture connects the consumers and farmers directly to each other. All the data is uploaded on the blockchain and visible to everyone. The consumers can directly see the supply and availability of goods in their area. It will also prevent food fraud, false labeling, and chain of middlemen. It is easy when you buy the goods from the local market because you know the sellers and the quality of food, but there is always a doubt when you are buying from an unknown market or seller. Blockchain solves this problem now consumers can buy food from anywhere by knowing the exact time of harvesting and where it comes from.

The income of farmers is highly volatile and depends mainly on the weather conditions, market demand and the variable market rates. The market rates are highly volatile and totally in control of the store holders. There is a big chain of middlemen between the consumers and the producers. The farmers get a very low price for their goods and all the profits are made by the middlemen. Just take an example of the current situation of onion in India, the price of Onion would reach up to 150 INR/kg but it purchased from a farmer at 20-40 INR/kg only. 

Blockchain will remove the middlemen chain and will provide fair prices to farmers according to their quality. There are validators (that are not controlled or influenced by anyone) that will verify the data provided by the farmers and upload it to the blockchain. The validators may take some fee for verifying and maintaining the blockchain that is very less than the charges the middlemen are taking now. 

Foods and products that we eat will travel a lot before making its place in our stomach. The goods are transported to the stores from the farmer’s lands and then delivered to the small retail seller. The transportation process is time-consuming and costly. Sometimes some people or groups take control of transportation and limit the supply of goods in the market, which will increase the price and the consumers need to pay more for the same goods. 

If the transportation process is uploaded on blockchain than it is very easy to track it by anyone. The consumers can track the supply of the goods in the market and the price will become fairer. Blockchain will remove the control of some people over transportation and brings transparency to all this process. 

The agriculture industry is totally based on weather conditions. There is an increasing number of farmers affected by floods and droughts every year. There are some insurance providers but the process is very complex and time-consuming. Taking insurance takes a lot of documentation and verification, that is the major cause of very less adoption of insurance by the farmers. 

The insurance process becomes very easy by implementing smart contracts. Smart contracts can automatically divide funds between the affected farmers and there is no need for any documents. By smart contracts, we can help them financially on time without any hassle. The smart contract makes sure that the agriculture subsidies are going to the farmer’s bank account. 

We have discussed the benefits of using blockchain in the agriculture industry. There are some companies that are already using blockchain technology for their food products. Let’s talk about them:

IBM Food Trust is built on blockchain that provides a safer, smarter and sustainable food ecosystem. The digitalization of data and transactions brings transparency in the food supply chain.

The IBM Food Trust provides all the food supply data in just one click for authorized users. Walmart the world’s largest company is using the IBM Food Trust to bring transparency among its transportation chain. 

The Kerala Government announced to use the benefits of blockchain technology. The project is implemented by the Kerala Development and Innovation Strategic Council (K-DISC). K-DISC is creating an ecosystem using modern technology. 

The state is also working on crop insurance to make it smarter and fool-proof, ensuring quick and simple processing. The settlement of claims for farmers suffering crop losses. 

Andra Pradesh Government is using blockchain technology in land records and transport. State Information Technology Minister Nara Lokesh said that blockchain technology will prevent tampering of land records which already are in digital form. The state is creating an ecosystem with blockchain technology to create a business, investment, and employment opportunities. 

Blockchain is the emerging technology and there is a  lot of room for its growth. There is much application of blockchain that will make the world a better place. In the next 2-5 years, we will see many new startups on blockchain and many big companies will start adopting it.