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emerging technology

Blockchain in agriculture: Uses and benefits for the agricultural supply chain

Gibson Toombs
April 19th, 2021
8 MINUTE READ

In conjunction with artificial intelligence (AI), machine learning, internet of things (IoT) devices, and other innovative digital technologies, blockchain is transforming the agriculture industry. 

From the growing and harvesting of crops on farms, to the purchasing of food products in grocery stores, blockchain technology is helping agricultural supply chains increase efficiency, safety, and sustainability. Not only does this help boost revenue for growers and manufacturers, but it also contributes to a cleaner environment and safer food products for consumers. 

Digital transformation is necessary to solve many of the issues that farmers and agriculture organizations face today. 

Here are some of the main problems in the agriculture industry that blockchain and other digital innovations aim to fix: 

  • Growing populations: By the year 2050, there will be roughly 9.8 billion people in the world. And in the US, three acres of farmland are lost to the development of urban and rural areas every minute. Therefore, leaders in the agriculture sector must adopt technologies that help extract more value out of arable land.  
  • Low income for farmers: Experts predict that the average net farm income will decrease by 9.7% in 2021. Farmers can improve their bottom line by utilizing technologies that increase outputs while decreasing traditional inputs, such as water, fertilizer, and human labor. 
  • Negative environmental effects: Unpredictable weather conditions caused by climate change make farming more difficult—and food production itself accounts for 26% of global greenhouse gas emissions. Proper utilization of big data and autonomous farming equipment will lead to smarter farm management, reduced carbon footprints, and less waste. 
  • Unsafe food products: Contamination can occur at any point during the production, management, and distribution of food products. As a result, 600 million people fall ill from consuming unsafe foods each year. This statistic can shrink by increasing the efficiency and security of supply chains via data technology.  
  • Food fraud: Food fraud—the act of intentionally altering, substituting, mislabeling, or misrepresenting food products to boost profits—costs the agriculture industry $10 to $15 billion each year. This illegal activity—which also poses a public health risk—can be discovered more effectively with the help of blockchain technology. 

A blockchain consists of individual digital records—or “blocks”— which are linked together in a single list—or “chain.” Participants inside the network can access these records, and use the data to gain insight, oversee processes, and make informed decisions. In the agriculture industry, farmers, manufacturers, logistics companies, consumers, and other participants can establish a stronger supply chain by sharing digital records relating to farm management, product tracking, food quality, government regulations, and more. 

Here are some of the most important benefits of blockchain in agriculture: 

  • Greater supply-chain transparency: Manufacturers, growers, and other supply-chain entities can access every detail of the food production and distribution process in real time, from farm to shelf—leading to higher quality food products, more sustainable practices, and increased revenue. 
  • Improved quality assurance and security: Greater data transparency enables simpler compliance with food and sustainability standards. This elevates the food inspection process and helps distributors identify cases of food fraud before it’s too late.  
  • Streamlined operations: The organizing, storing, locating, and mailing of physical documents requires unnecessary time and effort. Rather, engaging with digital, centralized data via desktops and mobile devices is faster and easier for all parties involved. 
  • Enhanced analytics: Using big data analytics tools, farmers can make smarter decisions during each stage of the process. For instance, they can improve outputs by picking optimal times to plant seeds, based on in-depth weather forecasting data. They can also access important information regarding consumer and market trends, such as shifting demands for specific foods—allowing them to more accurately prioritize and price their products. 
  • Stronger customer engagement: Consumers can also engage with agricultural supply chains via their own mobile devices. By scanning QR codes on packages, customers can backtrace food items to their origin and gain a full understanding of the product’s lifecycle. 

For these reasons, blockchain technology will continue to play an increasingly essential role in food supply chains. And by 2028, the global market for blockchain in agriculture is expected to reach $1.8 billion in revenue. 

How does blockchain work?

The underlying technology that supports every blockchain is known as a distributed ledger. Operating in the cloud, this ledger is essentially one big database, synchronized across multiple locations, institutions, and devices—and is accessible by multiple parties. Data can be saved in the blockchain manually, or automatically through various IoT devices, such as drones, satellites, and soil- or plant-based sensors. 

The data stored in each block—from food safety certificates to transaction details—are encrypted and immutable, so they cannot be stolen or altered. This makes it possible for farmers, retailers, and other members of agricultural networks to access important information easily on a single, secure platform. This is particularly beneficial for farmers, who can instantly gain valuable insights regarding seed quality, environmental factors, market prices, payments, and more.

As a product moves from one stage to the next in a supply chain, more and more blocks get added to the chain. So by the time a customer picks the item off a shelf and scans the QR code, they can see the product’s entire history. 

Here are some unique types of data collected and saved on blockchain at different stages of the food supply chain process: 

  • Crop and soil monitoring: Soil temperature and moisture levels, pesticide and water spray amounts, weather conditions and forecasts.
  • Warehousing and distribution: Quality control information, food safety inspection results, transportation data.
  • Retail and marketing: Electronic bills, tax information, business compliance credentials. 

How is blockchain being used in agriculture?

To get a clearer picture of the role blockchain plays in the agriculture industry today, let’s take a look at a few common use cases: 

Streamlining food and crop production with big data

Through IoT-enabled smart farming, groups of data—like the ones listed above—are collected to help farmers facilitate stronger outputs. But before the information is saved on the blockchain, machine learning algorithms are deployed for data enrichment and cleaning. 

In other words, massive amounts of data from multiple sources are automatically tagged and organized on a digital platform, so that farmers can easily adhere to government compliance enforcements, as well as extract valuable insights—such as predictions around crop yields and the current demand for certain products. This helps farmers make better decisions, such as which crops to prioritize, when to plant seeds, when to add more water and pesticides, when to harvest, and how to accurately price their products.

Once the enriched data is saved in the blockchain, it becomes accessible to every participant in the network—saving massive amounts of time, money, and effort for everyone involved.   

Helping farmers utilize financial services by increasing transparency

With a lack of transparency into resource allocation, transactions, and credit history, financial institutions are less likely to issue loans to agriculture organizations. And without access to financial services, farmers are unable to grow their operations, hire new employees, or invest in cutting-edge technologies. 

When stakeholders can share information from each stage of the production process through blockchain, they can prove to investors and financial institutions that their organization is not a risk. This also makes life easier for auditors, as they can digitally view every single transaction the organization has made via digital ledgers, rather than having to wait weeks for financial documents to arrive in the mail. 

Ensuring food safety through optimized supply chain tracking

Supply chain tracking is essential for guaranteeing that food products are safe to eat. However, without a centralized data platform, it can be difficult to know exactly where a particular product came from, how it was grown, who inspected it, and so on. 

When data is saved at each stage of the process, either manually or automatically through IoT, validating the quality of food products becomes much easier. Upon receiving deliveries from farms, food processing companies can check which types of seeds the farmers used, what the weather conditions were like during production, what the temperature was inside the IoT-enabled vehicles that transported the products, and so on. If everything checks out, the facility will confidently move forward with processing the food. 

Moving downstream, wholesalers and retailers go through a similar validation system when processing companies send them shelf-ready products. And as mentioned above, consumers can do their own quality checks with their smartphone by scanning the QR code on a food item’s packaging. 

Implementing blockchain solutions for your agriculture organization

For farmers, adopting blockchain technology can be a daunting task, as it requires sophisticated technical knowledge around IoT, machine learning, data analytics, and more. 

That’s where Codal comes in. We’re an award-winning design and development agency that specializes in digitally transforming agriculture businesses—helping them leverage data to increase efficiency, cut costs, reduce waste, and boost profitability. As we’ve done with many clients in the past, we’ll help guide your organization through the implementation of blockchain solutions, and provide ongoing support, so you can focus on running your business. 

By combining our technological expertise with your agricultural skills and knowledge, we can help make the world a better place. Interested in learning more about the benefits of blockchain in agriculture? Reach out to Codal today!

Gibson Toombs
AUTHOR

Gibson Toombs

Gibson Toombs is a Technical Content Writer at Codal. His writing career began in 2015 after graduating from the University of Oregon School of Journalism and Communication. Since then, he has worked on many projects, covering a wide range of technical topics, from solar energy to cybersecurity. When he’s not taking complex ideas and turning them into easily-digestible pieces of content, Gibson can be found playing guitar and writing songs at his apartment in Chicago.

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