How is Blockchain helping the agriculture industry and the food supply chain?

“Everything will be tokenized and connected by blockchain one day”

— Fred Ehrsam

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Blockchain is redefining the way we transact. It has the potential to change the way we buy and sell, track the provenance of food, and thus helps create trustworthy food supply chains and build credence between producers and consumers. It is an especially encouraging and revolutionary technology as it helps reduce risk, removes fraud, and brings transparency in a scalable way for multiple uses. The significance of blockchain is no more limited to cryptocurrencies as people have shifted their interest to a wider understanding of different ways of leveraging blockchain technology across industries. They are also being used with agriculture supply chains, land registrations, and digital IDs.

 Agriculture Sector contributes 6.4 percent i.e. $5,084,800 million of the total world’s economic production, and has over one billion people involved worldwide. With increasing consumer consciousness towards food security, the application of blockchain technology can play a key role in addressing several challenges related to the Agri-sector.

 Some of the promising benefits over the years that have been observed by implementing Blockchain are: 

1. Traceability: The growing demand for traceability enables the QR code scanning on Consumer food products as it helps the consumer to track the complete cycle of the food item from where it was grown or hoisted and other information about the product’s lifecycle. It also enables the company to trace their products and see where they have been distributed, this can help to reduce wastage of food products as they are tracked and safeguarded on time. With the help of blockchain system, we can quickly track the unsafe products in seconds and call them back to the source. 

2. Agricultural Insurance: Bad weather conditions can put the food crops at risk, for this agriculture insurance is a well-known tool to manage weather related risk, however, the process of validating claims is complicated and time taking. The introduction of smart contracts from blockchain eliminates the risk making it simpler, faster, and transparent. Smart contracts are lines of code that are stored on a blockchain and automatically executed, when predetermined terms and conditions are met. This helps farmers to receive money directly hence, there’s no fraud. 

3. Food Supply Chain: Agricultural supply chains are riskier than other supply chains as it depends on factors like weather and diseases that are harder to predict and curb. There are some common problems in food supply chains such as food traceability, food safety and quality, food trust and supply chain inefficiency, which add additional risks to the entire society, economy and the health of humans. Blockchain can help in providing a complete track record from the initial stage of growth and reach to the end consumer. This creates a brand image and trust in the quality of the product that consumers buy. 

4. Agricultural Finances: Small farmers might find it difficult to get the loan for their business as they have no credit histories and land ownership, the inability to access financial services can harm agricultural performance which may lead to farmers not being able to maximize their yields as buyers may find difficulty to pay farmers on delivery, this forces poor farmers to sell crops at the inferior rates. However, Blockchain provides investment tokens and funds for their business to pay for raw materials and machinery, and it also brings transparency and shared control attainable in the agricultural system. 

There are a few real-life examples that use blockchain technology for Agriculture and Supply Chain: 

  1. AgriDigital: It is a platform that provides simple, easy, secure, and changes the way we buy, sell, move, store and report on your grain. It can manage grain from yard to cash conversion by track every truck that leaves the field, keep track of grain from field to storage site, always helps us know the position of grain. It is allowing to contract, deliver and make payments securely and in real-time. 
  2. AgUnity: It provides solutions to digital identity and financial inclusivity to empower poor farmers. Using blockchain, it ensures that all transactions implemented by both our users and clients are recorded permanently and securely into an immutable Blockchain ledger. 

Blockchain technology has enormous potential to revolutionize many industries. Knowing the reliability that digitization brings between parties, facilitate information sharing throughout the supply chain, significantly reduce agricultural transaction costs, the demand for data and food integrity. It could prove helpful for partners in making systems more transparent, business transactions and compliance processes more efficient, and reduce complex traceability operations. Consumer safety is ensured as Blockchain technology unfolds unique transformations in ensuring quality-controlled food, providing storage conditions and empowered many farmers to be insured. 

At Admantium, we have specialized in helping blockchain companies develop their ideas and raise capital. We build all fundraise documents and advise on the process. We will help you come up with the best tech solution for your specific needs. Let us speak your ideas into existence. Mail .

About the Author – KASHIV CHAWLA

Kashiv Chawla is a Financial Analyst at Admantium Crypto Advisors, an Investment banking and consulting firm focused on blockchain technologies. We help early-stage entrepreneurs and startups in Building Business Models and Developing Business Ideas take a 360-degree view of how to build a sustainable business using blockchain technologies, translating concepts into clear cut plans. We also help raise external funding to kickstart or grow your business.

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