How Blockchain can Revolutionize the agriculture industry

Zebi
Zebi
Jun 5, 2018 · 5 min read
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Before jumping into “How Blockchain can revolutionize the Agricultural industry?”, let’s deep dive into what’s the need to integrate blockchain into agriculture.

Indian Agriculture sector — Facts

  1. Indian agri. Industry contributes to 13.7% to GDP

The status of Indian Farmers

The farmers, who were once regarded as the very heart and soul of the economy are now struggling all over the world to sell their produce at a decent cost. They work day and night to cultivate good crops, but most often they sleep with empty stomach. They have a handful of income and a bagful of debts.

Main reasons for Farmer’s financial distress

The agriculture industry is characterized by financial instability because of different types of risks involved in market, production, and prices. Following are the main reasons:

Unfavourable climatic conditions

  • Erratic weather

Decreasing size of land holding

  • Division of land holdings

Unsatisfactory realization of prices

  • Inability of most farmers to sell their produce in regular market at decent price

Inadequate storage facility

  • Upto 30–40% of agricultural produce is damaged due to lack of cold storage facilities

Indebtedness

  • Indebtedness is the main reason behind the suicide of 90% of farmers in India.

Reasons for Indebtedness

  • Increasing costs of agriculture inputs

Below is some statistical data to show the financial crisis of farmers:

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Image source: Isha Outreach

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Image source: The Economic Times

While the high levels of household debts have been considered as a significant cause of farmers’ distress, the use of certain unconditional debt relief to improve crop productivity, living conditions, and to reduce suicides is controversial. About 52% of India’s 90 million agri. households are indebted.

The debt relief programs fails to provide proper assistance to small farmers those who depends on money lenders and the farmers who is landless and don’t have access to bank loans.

What is needed?

1. Better credit facilities

2. Better quality and cheaper inputs required for crops

3. Useful weather information to farmers timely to plan their crops

4. Eliminate middlemen by linking farmers directly to consumers/retailers

5. Improve farming profitability to ensure the financial stability of farmers

The farmer needs a transparent, trusted and Reliable source of information which can connect them directly to the market, banks & consumers and eliminates middlemen who do profiteering at the cost of farmers due to lack of transparency in the process.

So, the question pops up — How can we solve this multitude of problems via Blockchain Technology?

It’s likely that whenever you hear or read “blockchain”, you will automatically think about cryptocurrencies. Indeed, cryptocurrency has been the most common use of blockchain technology. But, blockchain has a lot more to offer than just virtual currency. It has the potential to transform a myriad of industries — from manufacturing industries to agriculture — It’s enormous.

Let’s Know more about “Blockchain”

What is Blockchain and how it works?

The blockchain is based on a shared ledger or DLT (Distributed Ledger Technology). In more simple words — it is “one big ledger in the cloud.”

This ledger contains records, transaction details and information called blocks. These blocks are immutable and tamper-proof, i.e. the data in these blocks are hard to alter or hack. These blocks hold incorruptible trust. Anyone can put anything of value on blockchain from golds to tomatoes.

All these features make it possible for the various network (like farmers, consumers, retailers) to register and share information with maximum safety, transparency and speed. The data entered is visible to all of the elements in the blockchain. One has the freedom to approve or reject the information. Once the data is validated, it gets recorded into blocks, which gets organised in a chronological chain which cannot be altered by anyone.

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With blockchain technology, we can put all the information about the entire cycle of agricultural events onto blockchain to enable transparent and trusted source of information for the farmers.

Farmers can get instant data related to the seed quality, soil moisture, climate & environment related data, payments, demand and sale price, etc. all at one platform.

Blockchain will help in establishing direct link between farmers and consumers/retailers. It will empowers small farmers to organize themselves and get together to reach the market without taking any help from middlemen.

This will reduce the problems of low income, as blockchain will give transparency in supply chain, enabling farmers to get the real price for their produce.

FINAL THOUGHTS

In Blockchain the information is highly secure and tamperproof. With Blockchain, we can expect an efficient supply of products, fair pricing, efficient supply and improved product tracking. It will also enable farmers to do real-time management of the stock.

All the information starting from seed procurement to harvest to sale at POS system can be recorded on the blockchain. This will greatly help producers and consumers in quantifying, monitoring, and controlling the risks throughout the agriculture process. This could assist in alleviating rural distress in developing countries like India.

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