Posted by : The Caspian Debt Team Impact of Blockchain On Food and Agriculture
Is there a problem with the way agriculture and food supply operates in India? Are the farmers paid their fair share? Are the local growers able to compete directly with the multinational companies? Do the end consumers know where their food comes from, or what process was followed to grow it?
If your answer to all of the questions (other than the first) are a No, you understand how the food and agriculture segment works. In one word, inefficiently. However, with the growing use of technology, it is now possible to find answers to most of the supply chain problems of this industry by using blockchain. Blockchain is a continuously growing list of records, or blocks, which are linked and secured using technology. In context of agriculture, each of these blocks can store information regarding payments to farmers, source of the crop, farming and growing techniques, supply chain logistics etc. The information on blockchain is available to the public, i.e. can be accessed by anybody. This results in transparency, low dependency on middlemen, and equal opportunity for everybody. Blockchain offers a means to the growers to directly connect with the sellers to grow what is needed. Full or partial payment can then go to an escrow account, thus guaranteeing payment to the farmer and low possibility of exploitation. Growers can enter into smart contracts with sellers to ensure consistent revenue throughout the year. For example, a coffee shop owner in Delhi can directly order his coffee beans from a grower in Araku Valley (Vizag). He can either pay the entire amount at once, or only pay for the supply of coffee beans to Delhi, and the rest when he receives the shipment. The process frees-up growers from the chain of intermediaries.
Blockchain also allows consumers to support the suppliers they chose. Especially in case of organic or certified products, consumers are keen to track the food they buy. Blockchain empowers them with this ability. A potential buyer can scan the bar-code on a product in the supermarket and instantly know the entire chain from supermarket to farmer. In one of its blockchain projects, Walmart reportedly took 2.2 seconds to trace mangoes to the farm – a process that would otherwise take 18 hours and 26 minutes.
The biggest challenge in implementing blockchain in agriculture is removing the technology barrier, both practically as well as from the minds of farmers. Farmers are generally only focused on farming and reluctant to accept change that involves use of technology. It’s a matter of how quickly, and not if, Blockchain can build a more sustainable food industry.
