Realizing the full potential of Blockchain In Agriculture
Blockchain technology has proven its utility in the IT, financial services and the crypto industry. However, it has several other use cases other than being the underlying technology for leading cryptocurrencies like Bitcoin and Ethereum. Various firms around the world have harnessed this emerging technology and leveraged it to enhance supply chain management, identity management as well as healthcare. Blockchain’s use cases in the agriculture sector are less heard of, but the technology has demonstrated its utility in this $2.4 trillion sector as well. According to ReportLinker, the blockchain in food supply chains and agriculture ecosystem was estimated to be USD 60.8 million in 2018 and is projected to reach USD 429.7 million by 2023.
Blockchain’s Use Cases In Agriculture
Like many industries, the agriculture sector consists of several steps between farming and product packaging that make up its supply chain. The involvement of multiple steps raises the need for traceability and transparency in order to ensure the safety of crops. This is where blockchain technology comes into play. Blockchain’s ability to store and manage data enables traceability, which helps in the development and implementation of intelligent farming and index-based crop insurance systems.
With collaboration from stakeholders involved in the supply chain, blockchain technology can be used to improve traceability, efficiency, food safety and quality control. Farmers can use this tech to ensure that their crops are sustainably produced and delivered to the end user. Meanwhile the end users can depend on blockchain technology to make sure that the quality of the crops is up to the mark and trace the supply chain to ensure that it wasn’t tampered with. In addition to that, blockchain technology may also be used to facilitate payment between the parties involved in the supply chain, including farmers, wholesalers, retailers and customers. This leads to fair prices by eliminating the need for middlemen.
Firms Offering Blockchain Solutions For Agricultural Sector
Blockchain technology is yet to revolutionize the farming industry the way it has taken the financial services sector by storm. However, those involved with agriculture have started to realize what this emerging technology can offer in terms of smart contracts for farmers, farm management and data sharing, supply chain financing, as well as certification and standards compliance. While the potential benefits of blockchain in agriculture are promising, it’s important to note that implementing blockchain solutions requires careful consideration of technical, regulatory, and organizational challenges. Additionally, scalability, interoperability, and data privacy are key factors to address for widespread adoption of blockchain technology in the agricultural sector.
This is where heavyweights like IBM come in. The tech giant is one of the few mainstream corporations that have subsidiaries directly involved with facilitating blockchain solutions for the agricultural sector. IBM Food Trust is a collaborative network of growers, processors, wholesalers, distributors, manufacturers, retailers, and others, enhancing visibility and accountability across the food supply chain. Built on IBM Blockchain, this solution connects participants through a permissioned, immutable and shared record of food provenance, transaction data, processing details and more.
AgriDigital is another blockchain solutions firm based out of Australia, that caters to clients in the agricultural sector. This company enables farmers to manage their supply chains, from planting to harvesting, by digitizing the process and providing real-time tracking of inventory, pricing, and logistics. AgriDigital also offers a blockchain-based platform for grain trading, which reduces the likelihood of fraud and malpractice by eliminating the need for middlemen. AgriLedger, Ripe.IO and AgriChain also offer blockchain solutions for the agricultural industry. These solutions revolve around enhancing traceability and transparency of the supply chain.
Barriers To Using Blockchain In Agriculture
A report published by Forbes earlier this year cited research conducted by business advisory firm McKinsey while stating that agriculture could realize $500 billion in additional value by 2030 through increased use of connectivity and technology. According to the report, blockchain can only deliver increased optimization and transparency in food and agriculture if the sector embraces data sharing. The success of blockchain in agriculture largely depends on farmers sharing their data with agribusinesses that develop digital technologies. The World Economic Forum (WEF) believes that blockchain technology will eventually become an important element of the agricultural sector if it addresses the growing demand for transparency. “This can be done by validating the source of the inputted information and increasing automation to lessen the risk of human error and prevent data from being deleted,” the WEF added.
Concerns regarding the misuse or misapplication of blockchain technology have also been raised, with respect to the agricultural sector and food security. For instance, privately held blockchains may be vulnerable to hacks or malpractice. There may also be a gap in awareness and education about this technology among small-scale farmers. In order to ensure the success of blockchain in this sector, its implementation would have to be decentralized to accommodate small scale farmers. Additionally, those lacking the digital literacy required to engage in blockchain technology must be educated to ensure that everyone is able to leverage this tech for their agricultural business.