June 20, 2019 Last updated June 19th, 2019 2,629 Reads share

Blockchain in Agriculture: Why and How We Should Use It?

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We always deserve the best. The best in education, business, health care and even in the grocery store. Thanks to advancements in the agriculture industry, we always have fresh fruits and vegetables, goats, dairy products and meat to lead healthy and delicious lives.

But have you ever wondered how healthy the food we’re buying is? Was it delivered from proven farmers? What about its transportation and storage conditions? And, above all, does the quality match the price? We sure you have, and thanks to the technological development and blockchain industry we came as close to an answer as we ever did.

In this article, we will discuss technology of blockchain networks, its use in agriculture, and major improvements it can offer. So if you’re associating blockchain with single Bitcoin, we assure you – it’s so much bigger than just a cryptocurrency.

Use of Blockchain in agriculture

An encrypted information transfer is vital for each part of our modern life. We want our personal data to be safely stored and not disclosed to third-party companies and people. And that’s exactly what blockchain provides – efficient data protection and its secure exchange. As information in the network is written in blocks, it cannot be modified or easily read if the access is not allowed.  Also, all the data is stored on decentralized networks that negate hacking and prevent fraud activity.

Currently, the blockchain network is used mostly in the financial area to watch over transactions, confirm them, improve their speed and security level. Banks that have tested this technology appear to be quite satisfied with the results. Blockchain also helps with document verification and confirmation as well as helps to speed up logistic processes.

That’s great, but how blockchain is good for agriculture? As we’ve mentioned, the network is great for accelerating and securing financial transactions – the same way it may help with solving issues concerning agricultural projects funding and lead to further development of the whole industry. Blockchain allows to control and expedite everyday processes of the industry, such as:

  • Production
  • Food processing
  • Transportation
  • Storage
  • Sale

Blockchain technology is also great for solving issues connected with the growing population and thus food demand, and high-quality products demand. First, we can efficiently organize logistics and purchase funding by using this network. Second, blockchain can be useful for identifying food quality and preventing adulteration.

In addition, blockchain has a significant impact on supply chain arrangement as a transparent and secure network for data exchange greatly simplifies the cooperation between farmers, carriers, and customers. That’s vital for products with short expiry terms because it helps to reduce expenses and, therefore, the total price of these products.

When using the system, a farmer should enter all the details about the products they sell, and nobody can remove or edit them. Thus, it won’t be possible to sell the same dozen eggs twice – the system will detect the fraud and so will other users.

Benefits of using blockchain in agriculture

As you can see, the blockchain approach alone doesn’t guarantee that farmers’ income or beef quality will get better. Instead, the technology is rather a tool of automation, tracking, quality assurance, etc. By using it, we can experience improvements in the field.

Blockchain network has a lot of benefits when applied in each industry, including the agricultural sector. So let’s find out how exactly it can help us.

Transparent supplement

Customers do want to know where the food they’re buying has been grown, how it is delivered to the store, and if the products comply with quality standards. After all, we are what we eat.

Blockchain technology provides access to this data, and users are aware that information cannot be secretly modified or hidden from them. This way, if a special label with QR code is put on, for example, a meat package, the customer can not only check everything about conditions the animal lived in but also delivery details, storage time, etc. A full description is shown on a smartphone screen – how convenient is that!

Security system

As you already know, data stored in the blockchain network cannot be modified without other users knowing that. This approach results in creating a reliable system that protects its users from fraudsters and prevents cheating. For example, price reduction or increase not previously argued is impossible to perform.

The only thing to take care of is finding a good team of software developers with good rates and a decent portfolio, featuring at least one agricultural project, for example, agricultural CRM. The company should be able to deliver a well-designed and high-quality product with all the necessary data records set.

Investments encourage

Owning a small business is often hard. Add one-two years of looking for loyal customers and establishing processes, and it may not be just hard but rather unbearable. By using blockchain technologies, small farm owners will be able to find investors and improve their business with the help of Initial Coin Offering program. ICO is a funding type similar to crowdfunding, however, with cryptocurrencies instead of regular payments.

All you need to do for turning ideas into reality is to persuade people to invest in your project. Although ICO is not regulated and secured by the government, startups don’t need to cover additional legal expenses or hire a lawyer.

Smart contracts implementation

Smart contracts are integrated into the network in the form of written code created by software developers, and the technology itself greatly simplifies the process of supplying food and receiving the payment. Farmers don’t need to wait for weeks and months to get paid – transactions are processed immediately, as soon as products are supplied. Moreover, no intermediaries are involved. So both farmers and their customers can be sure that all obligations are properly fulfilled.

Stock exchange for farmers

Blockchain technology is represented on stock exchanges too. Their processes remain the same, however, stock exchanges can now benefit from blockchain. Farmers can easily trade upcoming contracts with fixed prices for crops, cattle, fruits, vegetables, and other agricultural products. As a result, farmers will know its cost, and customers won’t be affected by pricing changes.

Agricultural cryptocurrency

We often hear of blockchain technology in the context of Bitcoin and other cryptocurrencies. So when it comes to the agricultural sphere, they have PavoCoin –  a digital currency similar to Bitcoin, developed exactly for the world of corn and chicken. PavoCoin is designed specifically for farmers. It provides a secure payment method throughout the whole system. The currency is used to increase transparency, accelerate and simplify customers’ interactions.

Blockchain network use cases

We’ve discussed the benefits of using blockchain in agriculture, so it’s high time to get down to the ways the technology can be implemented in this industry.

Food origin tracking

Stores have to keep all the required certificates and other documentation you can ask for when buying food or other products. Still, they can’t say for sure whether a chicken or cow had even been ill, how it was fed and so on.
Blockchain networks help users find all the relevant details regarding food production, transportation, and storage time.

It keeps all the records without hidden modification, and you receive a full description of the food origins – directly on your smartphone which is both fast and easy. Thus, you can be one hundred percent sure you’re buying safe and healthy food for yourself and your family.

For instance, the technology is used by Walmart corporation for supplying livestock products from China and mangoes from Mexico to the United States. Walmart together with IBM are currently working on an agriculture supply chain based on the blockchain network to make everything transparent for retail corporation customers.

The system encourages all parts of the ‘food chain’ (farmers, suppliers, trading organizations, etc.) to enter their data into a single database that is based on the blockchain network.

The number of agrotechnical companies using the system is increasing daily, and soon many of them may start to accept payments in Bitcoins and other cryptocurrencies.

Preventing raw material forgery

Growing healthy cattle or plants is impossible if the purchased seeds and grains are of improper quality. Moreover, low-quality materials may affect farmers’ businesses and result in significant expenses. Surely, both small and big farmers are interested in purchasing products of decent quality and this is where blockchain system plays its part.

This way, in case suppliers, provide seeds of low quality, this information will be reflected in the network for other users to see. Not only customers but farmers themselves will be able to check all the black spots of the product they’re going to buy, save their money and demand for decent quality.

As an example, IBM blockchain for a supplement is based on transparency, featuring farmers’ records and real-time locating of their products. With the help of this platform, we can check records that reflect a product transfer flow and conditions, examine sources, check for dangerous components used, and find out many other details.

Decentralized organizations

Large companies are taking a great share of the market, displacing small-size companies and facilities. Same for small farmers – corporations dictate their terms, define what to grow or breed, the way of growing it, set unrealistic prices, etc. Depending on these clients and suppliers, farmers are not supposed to set their own terms as losing plenty of orders will be a predictable result. Luckily, we have a blockchain system that can change it.

Small households can now benefit from working directly with new customers, having stable work, funding, and defining their own working terms. As for consumers, they will get first-class products at a reasonable price and remain sure that these products are safe.

Watching over quality

Internet of Things is another important and innovative technology that can simplify our lives starting from housing to, as it turns out, agriculture. Using special sensors, we can monitor soil quality, the number of pests, irrigation and many other aspects on our phones or tablets.

A combination of IoT technology and blockchain network gives us a safe and secure storage system for the information about cattle, crops and other aspects. Sensors send all collected data to cloud storage in the blockchain.

Currently, Flux development team is working on a blockchain-based solution with the desire to create a combination of IoT technology and artificial intelligence. Eddy, the world’s first Growbot, is designed specifically for ensuring that the harvest is a success and for yield maximizing. And who knows, maybe each and every farmer will use the technology in just a few years.

In conclusion

Drawing the line, we can see that blockchain networks gain more and more recognition each year. They are already implemented in many spheres of our life, making it easier and staying on guard of our comfort.
Due to the use of blockchain in agriculture, farmers and customers can easily find each other, communicate, make a profit and, of course, grow and deliver safe and healthy products to our homes.

Sergey Lypchenko

Sergey Lypchenko

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