The wave of cryptocurrencies has surprised the financial industry. Regardless of what’s in store for Bitcoin and its peers, the underlying blockchain technology will surely survive and make inroads in each sector. Though the blockchain revolution began in the Banking and finance industry, yet other industries such as energy, healthcare, governance, retail, supply chain and agriculture too are going to be disrupted by this technology to a greater extent.
A Short Intro To The Uniqueness Of Blockchain
The blockchain is a sort of distributed ledger technology that enables all individuals to record exchanges in a decentralised data log that is managed on a network of computers instead of a physical ledger or a single database. Exchanges have to be endorsed through agreement, and everything is secured through cryptography.
In laymen terms, consider blockchain as google sheets versus excel sheet sent via emails. In google sheets, all the individuals have live access to the information being entered into the sheets and can freely track/record the updates of each section being made. Include another layer on top of this, where entry made once is recorded permanently and can’t be altered or erased by anyone.
What makes blockchain such a unique technology is that data stored on its networks is not just transparent, but incorruptible. Data is embedded in this network as a whole, by definition it’s open, and information once stored can’t be undermined by changing any data on the blockchain.
5 Potential Uses of Blockchain in Agriculture
Needless to say, one of the most logical applications of blockchain technology is in agriculture which is plagued with a few challenges. With increasing consumer consciousness towards food safety, blockchain application can play a significant role in taking care of numerous agriculture-related issues.
- Food Safety
Indeed, consumers today have grown quite suspicious about the food they are consuming. Food fraud costs an estimated $30-40 billion per anum globally. Moreover, food allergies are much more common now as compared to 25 years ago. This has resulted in the increasing demand for the information related to the food people are consuming.
Since this trend continues to rise, big food chains won’t have any choice but to use blockchain technology to ensure accountability, traceability as well as the quality of the food. Blockchain will act as a competitive edge for the brands competing in the competitive FMCG space.
- Food Supply Chain
In most of the developing countries, food supply chains are inefficient owing to the information asymmetry. This results in low farmer income since farmers don’t get their due share, even though they are the most significant part of the chain. With blockchain technology, the food supply chain gets simplified as the data management across a complex network including, consumers, regulators, retailers, processors, distributors, brokers and farmers get simplified as well as transparent.
Enhanced data sharing too can be helpful in reducing the $1 trillion problems of food waste. Farmers and all the members of the supply chain can have access to all the information throughout the chain. It will make the whole supply chain democratic as well as more efficient resulting in lesser food wastage and higher remuneration being paid to the stakeholder including the greater amount of the total value.
- Agri Inputs
Farmers are usually unaware of the inputs whether they are authentic or not. Local level retailers are selling duplicate products to the farmers with an aim to enhance their profit margins. Sometimes, even the retailers are not aware whether the products are authentic or not. Big agriculture-input players lose thousands of millions of dollars due to pilferage which impacts their brand image too.
Here comes the blockchain technology! The application of blockchain will solve this problem with increasing traceability of every product sold, from the manufacturer to the end customer. Farmers and retailers can scan the blockchain barcode on the products through their smartphone and know about the authenticity as well as source of the products they are purchasing.
- Land Registration
Land registration for sale and purchase is such a cumbersome process. Even, it is believed that it’s the most susceptible to the fraud. Blockchain technology can turn land recordings to more efficient and accessible as the data recorded is open, and bring complete transparency in the system.
By partnering with Swedish startup ChromaWay with an aim to build blockchain solution for land registration, Andhra Pradesh has become one of the first movers in this space. This will be a huge cost saving for the government as recordkeeping is a labour intensive process, which is costly. This partnership shows the progression of the Andhra Pradesh government vision for the state. Some states will follow suit once the pilot proves to be successful in AP.
Smart Contracting between the farmers and corporate farming firms can result in easier contracting for the leasing of land. Ethereum is an open source blockchain project explicitly built to realise the possibility of smart contracting.
- Disbursement of Subsidies
Around the world, the farm sector is completely dependent on government subsidies. For instance, $4.9 Bn (INR 32,000 Cr) were allocated for agriculture-related subsidies to the farmers in India, according to the 2017-18 budget. How much of this sum reaches to the farmers is still unsorted.
With the blockchain, the distribution, as well as the delivery of subsidies, can become much transparent resulting in the targeted disbursement of the subsidies plugging duplication in the existing system. Even though, the process is for establishing this network will be complicated since multiple stakeholders would be required to come together.
The days of blockchain application have just commenced, and as with the new technology, blockchain is set to hit a few roadblocks particularly with the government’s regulators around the world. As the true essence of this technology is to take power away from the hands of powerful by decentralising all the information and handing it over to the true owners (the people), democracy in the true sense.
If people can see the value that the technology brings into their lives, they will rally behind it, and blockchain application will act as mainstream in most industries including agriculture in the coming time.
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