Blockchain Technology for Precision Agriculture

While there have been promising examples of successful partnerships, the potential for fraud, lack of trust and transparency, inefficiencies, and high costs are still too familiar. The inability of organizations such as the United Nations Food and Agriculture Organization (FAO) to provide accurate data on the state of global food security is a case in point.

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The UN Food Insecurity Report shows that there are still 820 million chronically undernourished people. People believed the number of undernourished to be more than 1 billion two years ago, and not much has changed since then.

In developed nations such as the US, problems include food waste, with as much as 40% of food grown never eaten. It is attributable to several factors, including genetic modification (GM), pesticide use in non-organic farming, excessive packaging, and complicated supply chain processes. 

While some of the estimated $700 billion in food waste every year is energy inefficient, this also includes the cost of transport and storage. The continual rise in the demand for food, coupled with a continuing fall in the global supply of arable land and average productivity per acre, have created a ‘perfect storm to destroy global food security.

ICOs and blockchain in agriculture: 

Some believe that ICOs are beginning to solve this problem by allowing investors to facilitate direct collaboration between farmers and manufacturers. Such collaborations can benefit both parties, as well as more efficient pricing structures for farmers. The next stage of development is to increase the ability of farmers to access finance and technology.

Blockchain is unique because it uses innovative contract technology, a program enabling two or more parties to exchange information. In this case, the parties in question are the farmers and purchasers, who expose themselves to higher returns by collaborating in a decentralized, secure network.

Moreover, as the system creates trustless transactions with transparency and low costs, many innovative new business models are conceivable, supporting growth for everyone. As a result, several blockchain-based agriculture companies have emerged in recent years.

Agricultural Insurance:

 There is a blockchain-based platform that offers clients an argil-insurance product. The aim is to provide farmers access to competitive worldwide markets to protect their crops. This company’s decentralized database works by combining the data from information sent by the farmer and then validating it with satellite information, weather reports, and other local sources. 

If the data is falsified, these startups will be alerted, automatically triggering a payout involving cryptocurrency. It also gives farmers access to low-interest credit, allowing them to invest in improved equipment or business expansion. 

Water management:

The objective is to ensure that farming is more efficient, such as by helping to manage farm waste and providing more efficient irrigation. These companies are also helping to introduce blockchain technology in food traceability.

It is evident in the dairy industry as customers have become used to seeing a story of origin for their food, which includes details about how people made it and where it has come from. By applying blockchain technology, this level of information becomes readily available for consumers to see.

Food traceability:

Blockchain can help farmers connect with consumers and retailers much more efficiently, as with many consumer-facing applications. By applying intelligent contracts, blockchain technology can provide a system where farmers can receive feedback from their customers about the freshness of their products and any food safety or ethical issues that may arise from them.

The agricultural sector is one area where there are already many successful business models based on blockchain technology. Many of these businesses are based in Canada, where several startups have emerged to provide solutions for global agricultural needs.

These provide an end-to-end solution for the entire food system. They offer water and crop management, feed production, fertilizers, and pesticides. By applying blockchain technology, these companies ensure more efficient supply chains and save on costs.

E-Commerce of Agricultural Products:

The global e-commerce of agricultural products is predicted to grow from $3 billion in 2017 to over $30 billion in 2024, with the market expected to show a compound annual growth rate (CAGR) of 44% from 2017 to 2024.

The e-commerce platforms will provide direct sales channels for farmers and short supply chains for customers. Moreover, blockchain technology can provide a system where customers can track all the stages of production, including food safety certification such as organic certification. The agriculture industry is one area where there are already many successful business models based on blockchain technology. 

Maintaining the quality of crops:

It is where blockchain can enhance the way farmers store crops by tracking the entire process from seed to plate. It includes information about the soil, water, and fertilizer used during production and details about every shipping stage. By applying blockchain technology in supply chain management, farmers can reduce crop failure risks from factors such as foodborne diseases, drought, and invasive insects.

Companies like IBM are already providing farmers with a robust platform for optimizing their production systems through blockchain technology. 

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