Blockchain in Agriculture: Blockchain Saves the Day (Again)

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Many of us think Blockchain can only be applied in the finance industry.

That is understandable as we've seen numerous decentralized solutions blockchain technology has offered us.

With the likes of Bitcoin, Ethereum, and other altcoins, individuals and companies alike can make transactions in thousands, hundreds of thousands, and sometimes millions in a matter of minutes and with low transaction fees.

Yes, that's right.

Blockchain is a game-changer across different fields such as education, digital entity, gaming, real estate, healthcare, etc.

But today, we are looking into Blockchain and the wonderful solutions it brings to the agricultural sector.

Blockchain and Agriculture

Agricultural trends directly link to the world's population, including continuous population growth and urbanization.

Agricultural trends directly link to the world’s population, including continuous population growth and urbanization.

According to Worldometer, we are currently 7.8 billion people worldwide, and every day, the numbers are increasing.

Experts have estimated that this number could reach 9.7 billion by 2050 and 11.2 billion by 2100.

If you ask me…

That’s a whole lot of people to feed.

With such a growing population, it is obvious that food demand worldwide will increase significantly.

Globally, agriculture plays a major role in the growth of developing countries' economies. The agricultural industry is massive, so it has numerous challenges that negatively affect its sustainability.

From the 1st step of the agricultural process to labor and when the produce is harvested, producers must observe many processes.

These processes are full of inefficiencies which have caused a huge demand for innovative agricultural solutions, which blockchain technology can solve.

Blockchain can assist the food and agricultural industry in dealing with the predictable dangers throughout the ecosystem.

But before we go into that, what exactly is Blockchain Technology?

What Exactly is Blockchain Technology?

In layman's terms, a blockchain is a linked chain responsible for storing data in blocks (AKA units) in layman's terms.

It has been likened to a Google spreadsheet that accepts various authors' contributions through a locking technique.

Blockchain is a safer way of storing and transacting value and is the principal technology that powers cryptocurrencies like Bitcoin and Ethereum.

All transactions are monitored by a P2P (peer-to-peer) network, which records and keeps the transaction data.

Every transaction recorded then forms a block, and these blocks make the chains.

You cannot modify one block without changing others, and this action will need the approval of all systems involved.

Below, you will learn more about the agricultural industry's various challenges and how blockchain technology can solve the problems.

But, first, let us start with what Blockchain in agriculture is all about:

What is Blockchain in Agriculture?

Here, Blockchain in agriculture uses blockchain tech to optimize the agricultural process to get better results.

Blockchain in agriculture has many applications, from reducing waste to creating and managing a sustainable business to understanding consumer purchasing decisions to have better, smoother transactions while eliminating fraud.

Integrating blockchain tech into agriculture can also be referred to as Smart Agriculture.

Smart Agriculture uses natural resources and reduces environmental impact through ICTs (Information and communication technologies), Blockchain, and other technologies for gathering data.

In comparison to the crypto finance ecosystem, Blockchain applications in agriculture are still immature.

But the sector is very vital to our prosperity, and it has numerous challenges.

And these challenges have stirred blockchain supporters to start integrating the technology in agriculture.

But is this transition really feasible or merely pointless digging on an already sown land?

Let's find out!

Challenges the Agriculture Industry faces

Our demands on agriculture don't stop at production; we also use it to increase economic prosperity and revenue for social amenities.

Agriculture is also used to preserve land and water while facing pressures from industrialization and unsteady climates.

Along with those mentioned above, other challenges reduce the efficiency of agricultural processes.

  • Lack of transparency: Agro businesses, just like other industries, don't have a universal database. Even though the internet has made our world a small village, organizations still keep their databases to themselves.

And agro-businesses are no different.

All teams usually keep their records and share amongst themselves only on request. Because of this, there is a communication gap and a lack of transparency in the whole process.

  • Food quality and safety: Agriculture is one of the industries in which rain, sunshine, climate change, pests, disease, etc., have a significant effect. Something as minuscule as rainfall volume in a period can cost a farmer his harvest.

Feeding a growing population is no easy feat.

To get the best produce, farmers have to go through a rigorous process with the crops.

But the efforts are wasted when the food spoils.

And food spoilage is inevitable.

Even if an adequate amount of food is produced, it needs to be stored and preserved due to its quantity.

While it is in storage, several factors can cause spoilage, such as microorganisms, yeast, natural food enzymes, parasites and pests, temperature, moisture or dryness, and time.

In essence, the product goes through a progressive deterioration starting from harvest. Knowing how much time it takes to happen can help reduce the process.

  • Food traceability: Another big challenge the agricultural industry faces is the inability of producers to accurately track and trace their products’ movements and where they go.

An inefficient food traceability system causes this.

Food traceability is the ability of the producer to track any farm product through all the stages of production, processing, and distribution which may include importation and retail.

This challenge is very problematic as it directly links the food supply and safety in a particular area. Without an efficient traceability system, corrective actions such as product recall can’t be implemented quickly and effectively when there is a potential food safety problem.

Traceability also allows producers to track the whereabouts of the distributed products.

This advantage of traceability drastically reduces hoarding and scarcity of commodities.

  • Supply chain inefficiency: Having a functional, productive supply chain is a never-ending cycle for companies.

The inefficiency is because supply chains are complex.

Supply chain inefficiencies range from inefficient data tracking to unproductive systems that are cost and time ineffective.

Supply chains also suffer from poor visibility.

This means that it will be impossible for you to identify the cause when something goes wrong accurately.

Also, if the supply chain can’t track assets accurately, it is easy for exploiters and hoarders to get the original product and replace it with lookalikes and counterfeit.

  • Lots of third parties: From the farmland to the processing plant to the retail shop, lots of “hands touch” the produce before it reaches the consumer.

Because of this, the producer cannot guarantee the quality and safety of the produce.

Also, the cost will inevitably be higher than intended because of the large number of parties involved in the manufacturing, processing, and distribution.

This can hurt the profit margin of the producer.

Those mentioned above and more are the challenges facing the agricultural sector.

While they seem formidable, blockchain technology can go a long way to reduce and possibly eliminate their effects on the agricultural process.

Let’s see how blockchain technology can do that and the solutions it brings.

How Blockchain can help

The good thing here is that to solve the agricultural industry’s problems; you just have to apply Blockchain’s basic characteristics just like we use them in other sectors.

Here are some of the solutions Blockchain brings to agriculture:

  • Once added to the Blockchain, always on the Blockchain:

A beautiful characteristic of blockchain technology is that nobody can remove every piece of information you add. And the information is always accurate because multiple networks validate it.

Take this example: A farmer in Zimbabwe misplaced his receipt for wheat sold. Losing the receipt means there is no proof he received payment, but with Blockchain, there’s always an electronic receipt sitting on his phone.

  • Detecting fraud and malfunctions:

Blockchain integrated agriculture doesn’t eliminate the possibility of fraud, but it can help reduce the risks. Normally, with traditional technology, the supply chain can easily be manipulated and exploited.

But with Blockchain, we can now track all stages of a supply chain, and since someone cannot change the information, manipulation is difficult to implement.

  • Blockchain increases transparency and trust:

Most businesses are used to seeking the services they need from third parties. But blockchain technology is changing that with cryptography, mandatory verification of identity, etc., all in a bid to ensure trust amongst the participants in the network.

Consumers can now trust retailers and farmers more when they know the food processes and how the food was supplied, etc.

This information can be made accessible through blockchain-based applications.

  • Third-party? No thanks:

Blockchain’s main promise that has made it so popular in the financial ecosystem is its decentralization. This removes the presence and influence of third parties and authority figures in the whole process.

Decentralization reduces the friction and time it takes for the whole process to occur.

  • Enhancing food quality and safety:

The agriculture-food process is complex and massive.

To ensure the quality of the product, the process needs to be simplified and improved for farmers, suppliers, retailers, and end consumers whose health activity largely depends on what they buy and eat.

With blockchain-enabled apps, people in the supply chain can report emerging issues in real-time.

When a foodborne disease starts, retailers can find out where the contaminated food is coming from on time.

It enables product recalls and helps save lives.

Now you know the various ways blockchain technology can help agriculture.

And you probably think that they are Blockchain’s main use cases in agriculture.

You’re correct…

Partially.

The number of possible blockchain use cases in agriculture is much bigger, and it ranges from planting crops to insurance and extends to the business aspect of agriculture.

We can see this when it comes to the solutions blockchain technology brings for agricultural eCommerce.

Blockchain Solutions for eCommerce agriculture businesses

When ordering a product online, what’s most important to you?

Naturally, it is trust.

You want to know whether you can trust the manufacturer and the eCommerce platform.

The next on the line is a convenient means of payment and also easy trackability. But when it comes to food, our requirements are more specific, which normally poses a problem for agricultural businesses.

1st, they need to process orders quickly so the product doesn’t spoil and lose customer trust. And it is always difficult to confirm the delivery conditions of their products.

Benefits of Blockchain in Agricultural eCommerce

Blockchain provides solutions to any of the problems mentioned above and others. Here are examples:

Security: The main promise of blockchain technology is security.

Encryption, private key, and multi-factor authentication are efficient tools that keep eCommerce platforms secure.

The information collected from the farm and inputted to the Blockchain remains vital for producers and customers.

2. Access to online marketplaces for small producers:

Traditional eCommerce often involves large organizations as online platforms bring more revenue.

But many essential agricultural products are made by small households.

Blockchain can enable small producers to gain market share while reducing transaction costs.

3. Effective supply chain management:

To manage the producer’s supply chain, certain information is needed.

The manager can add information such as the farmer, product’s origin, transportation conditions, warehouse, and even storage temperature states to the Blockchain.

Once it’s on the Blockchain, the data can be referred to whenever there is a need for it.

4. Better payment methods:

Blockchain’s superpower is offering better, faster payment methods.

No wonder it’s popular in the financial sector.

It is obvious that with blockchain-integrated agriculture, farmers can now use cryptocurrencies for transactions.

Using cryptos for transactions is very time and cost-effective.

5. Increasing customer trust:

Fear is one of the main reasons shoppers don’t buy from eCommerce platforms.

Since the Blockchain is a decentralized system where information can be verified and is publicly available, users are assured of data authenticity.

This feature will make consumers more open to trusting the producer and products.

Future of Blockchain integrated agriculture

In the future, we will see the interconnected growth of the following: Global population growth, which will lead to an increase in demand for food that requires innovation.

And the promising solution to this problem is blockchain technology.

Blockchain solutions in agriculture can address important industry challenges such as food quality and safety, weather forecasting, and monitoring.

The technology will also make agriculture more efficient, profitable, and secure.

However, all agro-based businesses aren’t the same, so they need to develop a custom plan that fits their models.

As regards the future of blockchain in agriculture…

Blockchain is bent on revolutionizing the agricultural industry, and it’s only a matter of time.

Do you have any ideas or comments about Blockchain integrated agriculture?

Kindly share them in the comment section.

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Blockchain in Agriculture: Blockchain Saves the Day (Again) was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.