Blockchain has come to revolutionize farming, it is a technology that trace food from farm to market. It is a big ledger stored in the cloud. This ledger contains all sort of records, like transaction details, seed quality data, moisture content data, climate and environmental data, market prices etc. All these information are called blocks and they cannot be changed or hacked. All these features make it possible for the various stakeholders involved in the agricultural value chain e.g. farmers, marketers, logistics companies, retailers, manufacturer’s, input suppliers etc. to register and share information with maximum safety, transparency and speed. The data entered is available to all of the elements in the block-chain. Once the data is validated, it gets recorded into blocks, which gets organized in a chronological chain and cannot be altered by anyone.
Various sectors of the Agricultural value chain that can benefit from blockchain
- Agricultural Insurance: Low-cost agricultural insurance schemes provided by companies like leadway insurance, IGI, NAIC (Nigeria Agricultural Insurance Cooperation), AIICO, etc are increasingly viewed as a way of protecting farmers from unforeseen losses caused by floods or droughts.
However, despite the benefits, the rate of acceptance of insurance products by the rural farmers, still remains relatively low. Some of the reasons are it takes time to validate claims and to effect payouts. However with blockchain through the use of index-based insurance, this can FastTrack the process.
Index insurance based on smart contracts, can automate and greatly simplify the process thereby facilitating instant payouts to the insured, in the case of adverse weather incidents.
Automatic data feeds provide continuous and reliable hyperlocal data to the contract thereby eliminating the need for on-site claim assessment.
- Land Registration: Blockchain could help provide an authentic ledger of land records. Especially for rural farmers, this will go a long way in mitigating the risk involved in procurement of land for agricultural purposes. You can easily go through land records to determine the true owners of such farmlands.
- Agricultural Supply Chain: Blockchain can assist in providing credible records from the farm to the retail store of a product. This can give consumers increased trust in the products that they buy and it is also an opportunity to reward the producers who employ good agricultural practices to cultivate their produce.
- Crop and Food Production: With the help of smart farming, IoT sensors could fetch important information like the temperature of the soil, water level, fertilizer details and more and send it to the blockchain. Based on the data saved in blockchain, smart contracts could trigger and execute the specific actions. It will help in enhancing the quality of the farming process as well as produced crops.
- Procurement tracking
- Weather crisis control
- Managing Agricultural Financing etc.
A Farmers’ story
AgriDigital’s initial blockchain pilot in 2016 executed the world’s first settlement of a physical commodity on a blockchain. The pilot captured real-time data of a grain sale between a grain grower and a buyer, and then executed that transaction on a blockchain. The grower was David Whillock of Whillock Pastoral Co Pty Ltd who delivered a load of wheat comprising 23.46 metric tons to Fletcher International Exports (FIE). For Whillock, the delivery was business as usual, arriving at the site in Dubbo, moving across the weighbridge and testing the quality of the grain at the sample station. However, at the moment of taring off at the weighbridge, the settlement occurred on the blockchain and simultaneously the payment was created: a global first for the agriculture industry.
“The new blockchain technology will benefit farmers such as Whillock Pastoral Company by providing fast and secure payment of grain,” commented David Whillock, “knowing that we will be paid on delivery will assist in maintaining regular cash flow, helping us better and more confidently manage our business”.
Fletcher International Exports (FIE) was the first customer on board AgriDigital’s blockchain enabled commodity management platform. According to Rodger Fletcher, Chairman of FIE, “We never want to see another IT guy in here who doesn’t understand the industry and our business. Things are changing fast and we’re excited to have AgriDigital as our technology partner for the future.”
Advantages of Blockchain to small holder farmers
- It can help to foster Transparency and trust among stake holders
- Farmers can get reliable information concerning seeds quality, Relative humidity, and weather information, Market prices etc all on one platform.
- It can help importers track/trace the origins and quality of the imported products
- It can help in establishing a direct link between farmers and consumers.
- It can help to eliminate middlemen and outrages prices, enabling farmers get fair prices for their produce.
Blockchain technology is still at its infancy stage so still faces a lot of challenges like, policies and regulations from governments, speed of transactions and it is also considered as a technology that consumes a lot of energy.