Increased Conversions, Enhanced Sales and Improved ROI
Before we start with how blockchain can help the agriculture industry, let me ask you, “Do you know what blockchain technology really is?” If not, then let’s start by giving you an idea of the blockchain. It’s an electric system with the help of which you can record transactions in real time. Whenever a participant in a blockchain system makes a transaction, the date, time, cost and nature of the exchange is recorded. Once the accuracy of the information has been confirmed by the parties, it is then indelibly and permanently recorded. Also, it can be made accessible to all the other participants in the system. Improved accuracy and transparency of the information not only increase trust between parties, but also boost efficiency and reduces costs.
One of the most logical applications of blockchain is in the agriculture industry. With the consumers becoming more conscious about food safety, blockchain can play an important part in solving problems related to agriculture. Here are some blockchain applications in agriculture –
Because of information asymmetry, the food supply chains in most developing countries are not efficient. This results in the low income of the farmers as they don’t get their part of the share, even though they are the most essential part of the chain. Blockchain in the agriculture industry makes the entire food supply chain simplified. The management of data across a complex network that includes brokers, processors, farmers, distributors, regulators, retailers and consumers gets transparent as well as simplified. All the members of the supply chain including the farmers can have access to all the information throughout the chain, making the entire supply chain more efficient and democratic. As a result, there will be higher remuneration and lesser wastage of food.
Wouldn’t it be great if you could verify the origin of the food products? There are many food products out there that are labelled as organic. But how can you be sure that the information that is provided on the labels is correct? This is where blockchain comes into the picture. With blockchain in agriculture, you can easily trace the origin of the food and verify its labelling. Farmers and retailers can scan the blockchain barcode on each product using their smartphones. This could prevent false labelling, food fraud and redundant middlemen.
Blockchain allows faster payment options to agri-commerce participants. Also, it lowers the costs to a great extent. In the present system, it takes weeks for the farmers to receive the payment for their goods and traditional payment options like wire transfers can be quite expensive. Blockchain can act as a blessing and cope with all these inefficiencies. It can help a lot in agriculture industry growth. There are many developers who have already designed blockchain-based apps in order to provide secure, affordable and near-instantaneous peer-to-peer fund transfers.
The farm sector is dependent on government subsidies to a great extent. For example, in 2017-2018 India Budget, 4.9 billion USD were allocated to farmers for agriculture-related subsidies. Are you sure that this entire amount has actually reached the farmers? With blockchain in the picture, the delivery as well as distribution of subsidies can become more transparent. While it’s true that the process to establish this network can be extremely complex as multiple stakeholders would require coming together, it is not impossible.
Land registering for purchase or sale is not only a very lengthy process, but also most vulnerable to fraud. This can be changed with Blockchain, as it can make all types of land recordings more accessible and efficient. This is because the data that is recorded can be available publicly in order to bring complete transparency to the system. Recordkeeping is a labour intensive and costly process. With Blockchain in the agriculture sector, there will be huge cost-savings.
In conclusion, it can be said that blockchain has a bright future ahead.
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