Blockchain Agriculture Effect In The Supply Chain
When most people think or hear about blockchain, they think of cryptocurrency. This is the immediate thought because that is what they see in the news. But cryptocurrency is based on the blockchain technology and not the other way round’- Erik Valiquette
Erik Valiquette on our podcast gave the simple reason why Blockchain is always misunderstood. When most people hear or think about blockchain technology their minds go straight to Bitcoin Ethereum Doggie Coin…., who will blame them since this is what is talked about in the media? But Blockchain is way bigger than all these cryptocurrencies. In fact, without Blockchain, many cryptocurrencies cease to exist but Blockchain can exist without cryptocurrency. This is because cryptocurrencies are built on the blockchain. Blockchain is the foundation while cryptocurrency is the building.
Blockchain technology which was introduced more than 10 years ago by Satoshi Nakamoto is majorly used as a source of transactions. But this is not the only use of blockchain.
Top Blockchain Applications to Know:
- Money Transfer
- Smart Contracts
- Internet of Things (IoT)
- Personal Identity Security
- Non-fungible tokens (NFTs)
Blockchain Agriculture and Supply Chain
With the ability of blockchain technology to create fairness and transparency, blockchain is crucial to the supply chain.
This underlying technology has been around for many years. It is a very safe and secure way for sharing lots of information making it good for the supply chain.
The supply chain is all about a chain of events relying on each event to get things done. Where blockchain becomes important is the tracking of events in the supply chain.
Uses of Blockchain in Agriculture Supply Chain
1. Smallholders have access to market
One of the challenges smallholder farmers face is direct access to the market. Most smallholder farmers have access to the market through middlemen. This causes the smallholder farmer to sometimes sell below price value. Blockchain agriculture eliminates the middle man and gives more power to the farmer after all he is the real actor in this process.
For example, a group of farmers in Colombia would give their food to the distributor and they didn’t know the price of the market might be in North America Australia, or anywhere with blockchain technology, farmers get direct access to the market and would know their produce worth.
This helps the farmer put a fair price on his product and not feel cheated or ignorant about how much he should make.
2. Reduce illegal and unethical modes of production
One of the things blockchain agriculture brings is accountability. The farmer is accountable to their final consumer because information about the quality of production is in the hands of the consumer through blockchain technology.
3. Aids in purchasing decision-making for the consumers:
Just by scanning through the barcode or QR code because of a product a consumer can get information about relevant details about the whole events on the supply chain.
With blockchain, from production processing to transportation. How the produce was stored…. all in the hands of the consumer. – Dr. Dinesh
Blockchain agriculture provides the consumer with relevant information about the product thereby aiding him in making a purchasing decision.
4. Consumers Feel Safe
Consumers become assured that what they are eating was produced ethically. The consumer is no longer afraid of how the product came about because he has the information needed to assure him.
5. Aid farmers to get loans capital or government aid
One of the farmer’s challenges in the agricultural sector is access to loans capital or government, especially smallholder farmers. One of the reasons these challenges persist in the agricultural sector is that banks, financial institutions, or, government do not have the relevant information about the farmer like the number of output acres of land used, and the crop produced…. This information aids these institutions to disburse the right amount of loans or financial aid to the farmers because they are sure that the money will be used for the right purpose.
6. Transaction Time Is Reduced
Blockchain agriculture saves time for transactions. When there is transparency, the transaction becomes quicker.
CHALLENGES OF BLOCKCHAIN AGRICULTURE IN THE SUPPLY CHAIN.
Blockchain technology is expensive and it requires banks and technology companies to assist the smallholder farmer in implementation because this might be a huge financial burden to the farmer. Though blockchain is cost-effective long term, it might not seem cost-effective in short term for the smallholder farmer.
Dr. Dinesh believes that with much supply the cost will reduce. This is why more Agri-tech companies should be encouraged to invest in this technology.
Not many smallholder farmers know about blockchain agriculture and its application in the supply chain. This problem can be solved through workshops, seminars, and the distribution of educational materials.
Let’s talk agriculture plays its part by bringing more awareness about this technology through the use of our podcast. We understand that this technology will be a game changer in the agriculture sector.
Change disrupts, it shakes people. Technology causes change and this change disrupts people. Blockchain technology eliminates the use of middlemen. This is likely more beneficial to smallholder farmers than to middlemen.
Blockchain agriculture aids trust between the actors in the supply chain. This technology has already been applied by major companies like Starbucks, IBM, Alibaba, and so on.
Listen to all our episodes on the blockchain. We invited top experts in blockchain technology in the supply chain to give relevant information about this topic. You don’t want to miss an episode; I can assure you.
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