Can Blockchain in the Food and Agriculture Supply Chain Improve Productivity?

The blockchain community has come a long way over the last couple of years. The focus has been shifted from cryptocurrencies to a wider understanding of different ways. Blockchain technology can today is being leveraged across diverse industries, including the food and agricultural sector. Blockchain in the food and agriculture supply chain can track the provenance of food and hence helps to create trustworthy food supply chains and build trust between producers and consumers. As a trusted way of storing data, it facilitates the data-driven technologies to make farming smarter. This article explores how blockchain in food supply chains enables agricultural insurance, smart farming, and transactions of agricultural products.

Traceability, Tracking, and Visibility

The significant benefit of using blockchain technology in retail and supply chain processes is its efficiency in facilitating the tracking and tracing of raw materials, finished goods, and merchandise to monitor it right from the provenance to the point it arrives at the customer. Due to the changing or speculated legislation changes in the Food and Drug Administration level, there is a possibility that more food and beverage organizations will be involved with track-and-trace initiatives due to online buying and selling. Consumers like the idea of a fully tracked food supply. They are attracted to technologies that instill trust in food data after years of food labels being manipulated by the industry.

Marketplace Creation

One challenge for commercial food enterprises is sourcing quality ingredients in sufficient quantity. Farmers may not know who the big customers are or what end customers are looking for. Intermediaries traditionally have controlled a significant percentage of profits. Digital marketplaces enable buyers and growers to connect directly, increasing farmers' profits and investors to invest directly into farms producing commodities and trade on that investment.

While most wine industry enterprises using blockchain are focused on traceability and authenticity, VinX is a platform for trading wine futures. Wineries receive direct funding from consumers, allowing them to develop relationships with their customers and reducing the stress around the often multi-year gap between receiving funds and sales.

Data Sharing

Companies that invest in agricultural products have an inherent interest in having information about the product before they commit to a purchase. This includes everything from salt and sugar levels in tomatoes that would affect flavor to crop health information, which can help banks and others anticipate whether a farm will be able to repay a loan.

They collect data from sensors, spreadsheets, manual surveys and other sources along the supply chain to give commercial buyers detailed information about product attributes. Some firms even bring data from multiple sources and facilitate data access to banks, insurance companies, retailers, agriculture input suppliers, NGOs, and government agencies. One of the many benefits of having so many different types of data related to agriculture on a decentralized data exchange is that it offers enhanced access to funding for farmers that in turn helps them to purchase seed and other inputs to increase their production.

Capital Accessibility

Smallholder farmers across the globe struggle to access funding through traditional financial models like loans. Lack of significant credit histories, land ownership documentation and other issues make it difficult to access bank loans. Therefore, small farmers are often forced to borrow funds from money lenders at higher rates. Tech-savvy agricultural ventures like Bananacoin and Agrocoin are now using blockchain to create investment tokens and raise funds for their agricultural businesses. 

Thus, leveraging the blockchain in the food and agriculture chain can address several concerns, including payment problems, improving the supply chain management.