Blockchain technology has proven its worth in the IT, financial services and crypto industries. However, it has several use cases other than the underlying technology for leading cryptocurrencies such as Bitcoin and Ethereum. Several companies around the world have taken advantage of this emerging technology and used it to improve supply chain management, identity management and healthcare. Less is known about Blockchain’s use cases in the agricultural sector, but the technology has also proven its worth in this $2.4 trillion industry. According to ReportLinker, blockchain in food supply chains and the agricultural ecosystem was valued at $60.8 million in 2018 and is expected to reach $429.7 million by 2023.
Blockchain’s Use Cases in Agriculture
Like many industries, the agricultural sector consists of several steps between agriculture and product packaging that are part of the supply chain. The multi-step involvement increases the need for traceability and transparency to ensure crop safety. This is where blockchain technology comes into play. Blockchain’s ability to store and manage data enables traceability, which aids in the development and implementation of intelligent agricultural and index-based crop insurance systems.
With the participation of stakeholders involved in the supply chain, blockchain technology can be used to improve traceability, efficiency, food safety and quality control. Farmers can use this technology to ensure that their crops are sustainably produced and delivered to the end user. Meanwhile, the end users can rely on blockchain technology to ensure crop quality is up to scratch and track the supply chain to ensure it has not been tampered with. In addition, blockchain technology can 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 because intermediaries are no longer needed.
Companies that offer Blockchain solutions for the agricultural sector
Blockchain technology has yet to revolutionize the agricultural sector as it has taken the financial sector by storm. However, those involved in agriculture are beginning to realize what this emerging technology has to 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 is important to note that implementing blockchain solutions requires careful consideration of technical, regulatory, and organizational challenges. Moreover, scalability, interoperability and data privacy are key factors 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 companies with subsidiaries directly involved in facilitating blockchain solutions for the agricultural sector. IBM Food Trust is a collaborative network of growers, processors, wholesalers, distributors, manufacturers, retailers and others that improves visibility and accountability throughout the food supply chain. Built on IBM Blockchain, this solution connects participants through an authorized, immutable, and shared record of food origin, transaction data, processing details, and more.
AgriDigital is another blockchain solutions company based in Australia that focuses on customers 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 grain trading platform, which reduces the risk of fraud and malpractice by eliminating middlemen. AgriLedger, Ripe.IO and AgriChain also offer blockchain solutions for the agricultural sector. These solutions revolve around improving supply chain traceability and transparency.
Barriers to Using Blockchain in Agriculture
A report published by Forbes earlier this year, citing research from business consulting firm McKinsey, stated that agriculture could realize $500 billion in added value by 2030 through greater use of connectivity and technology. According to the report, blockchain can only bring greater optimization and transparency to food and agriculture if the industry embraces data sharing. The success of blockchain in agriculture largely depends on farmers sharing their property data with agribusinesses developing digital technologies. The World Economic Forum (WEF) believes that blockchain technology will eventually become an important part of the agricultural sector as it responds to the growing demand for transparency. “This can be done by validating the source of the information entered and increasing automation to reduce the risk of human error and avoid data deletion,” the WEF added.
Concerns have also been raised about the misuse or misapplication of blockchain technology, in relation to the agricultural sector and food security. For example, private blockchains can be vulnerable to hacks or malpractice. There may also be a gap in awareness and education about this technology among smallholder farmers. To ensure the success of blockchain in this industry, its implementation should be decentralized to cater to small-scale farmers. In addition, those who do not have the digital literacy necessary to deal with blockchain technology should be trained to ensure that everyone can use this technology for their farming business.