Agriculture has been the beating heart of human civilization for several years. Feeding and providing a livelihood for billions of people across the globe. Agriculture is now under attack by unpredictable climate changes like floods, prolonged droughts, and bushfires. As farmers battle the effects on their crops and animals. The global food supply chain is a big labyrinth of logistics and middlemen. This has made it hard to trace where our food comes from. Creating room for food fraud and wastage in the supply chain. This repeal effect has left many farmers worldwide stuck in a cycle of poverty with no access to loans and capital.
The exciting part is we are standing at the edge of a new era in agriculture, joining blockchain with smart agriculture brings solutions to food insecurity and sustainability.
What is the blockchain?
Blockchain is a technology with the potential to bring breakthroughs in the Agri sector. This term has commonly been used in cryptocurrency but now with ICT joining agriculture. Blockchain technology has the potential to improve transparency, traceability, and value chain in this sector. Blockchain offers more decentralized access to information as compared to the Traditional centralized methods.
The Technology is distributed ledgers that create databases for tracking data and maintaining information flow across a decentralized network. It has gained popularity since about 2019. However, there is limited evidence as to the practicality, and scalability. And the impact of Blockchain in agrifood value chains, particularly those that include smallholder producers.
The global blockchain in agriculture and food supply chain market size is estimated at USD 133 million in 2020. It is projected to grow at a CAGR of 48.1% to reach USD 948 million by 2025. This growth is driven by the increasing demand among stakeholders to trace and track the raw materials. And final products which increases the trust among all stakeholders.
Furthermore, the tech comes with the use of other complex accessories like sensors, robotics, the Internet of Things (IoT), and digital platforms. This is without doubt an expensive venture but the farmers who have taken the leap of faith are enjoying several benefits amidst the challenges that we are to share in this article.
What are the benefits of blockchain in agriculture?
- Traceability and transparency:
I must say this is the major benefit of this technology. It is now possible for consumers to trace and know where their food comes from with the detailed information the technology gives. We have the chance to track the food after it is harvested and know exactly where and the condition of the food.
- Improved quality control and food safety:
Blockchain enables farmers, processors, and distributors to track the movement of goods from the farm to the consumer. This capability is especially crucial in the case of foodborne illness outbreaks, as blockchain’s traceability can help pinpoint the origin of the contamination and prevent further spread.
- Efficiency and fair payments for farmers:
Smart contracts on the blockchain can automate transactions, payments, and other processes, reducing the need for intermediaries and cutting transaction costs. - Environmental sustainability
Reducing food waste by enhancing the traceability and transparency of the supply chain. Optimizing Resource Use, also Promoting Responsible Agricultural Practices through smart contracts. Blockchain can incentivize farmers to adhere to sustainable and eco-friendly farming practices. Automating rewards or subsidies for compliance with environmentally friendly protocols.
Challenges and solutions in the Application of blockchain technology.
1. Lack of Digital Infrastructure
- Challenge: Many farmers, especially in rural areas, lack internet access and digital literacy, making it hard to adopt blockchain solutions.
- Solution: Governments and private sectors should invest in rural digital infrastructure, provide mobile-friendly blockchain applications, and offer training programs for farmers.
2. High Implementation Costs
- Challenge: Setting up a blockchain system requires significant investment in technology, training, and infrastructure.
- Solution: Adoption of public or consortium blockchains instead of expensive private ones, and leveraging government subsidies or agribusiness partnerships to reduce costs.
3. Data Accuracy and Trust
- Challenge: If incorrect data is entered into the blockchain (e.g., fake organic labels or false yield reports), it becomes a permanent part of the record.
- Solution: Use IoT sensors, GPS tracking, and AI verification to automate and validate data entry, reducing human errors and fraud.
4. Scalability Issues
- Challenge: Blockchains like Ethereum face scalability issues, leading to slow transactions and high costs when handling large volumes of agricultural data.
- Solution: Implement layer 2 scaling solutions (e.g., sidechains, rollups) or use alternative blockchains like Hyperledger Fabric, which are optimized for enterprise use.
5. Regulatory and Legal Uncertainty
- Challenge: Many countries lack clear policies on blockchain use in agriculture, creating uncertainty for farmers and agribusinesses.
- Solution: Governments should collaborate with blockchain experts to develop clear legal frameworks and incentives for adoption in food supply chains.
6. Interoperability with Existing Systems
- Challenge: Many agribusinesses already use centralized data management systems that may not be compatible with blockchain networks.
- Solution: Develop blockchain APIs that integrate with existing ERP (Enterprise Resource Planning) and supply chain management systems, enabling smooth data exchange.
How does Blockchain technology work?
The following are some of the most common blockchain applications
- Agribusiness insurance.
- Smart farming.
- Traceability.
- Land registration.
- Food supply chain.
- Security and safety farms.
- Agricultural product e-commerce.
Case study
Blockchain technology in the East African agricultural sector can address many challenges by increasing efficiency, reducing costs, and increasing access to finance and credit (Mavilia & Pisani, 2019). In addition, Blockchain can increase transparency and reduce corruption in land transactions, a significant issue in the region. One example of a Blockchain project in the agricultural sector is the ‘Blockchain for Agrifood. Which aims to use Blockchain technology to increase the efficiency and transparency of the farm supply chain in Kenya.
Future of blockchain technology
Am not a prophet to predict the future but incorporating blockchain. AI and other robotics allow for the collecting, analyzing, and storage of large amounts of information. This information on plant and animal health, production, and market price is easy to interpret and reference for making informed decisions. I see more farmers venturing into blockchain because of its capacity to revolutionize the sector. Through smart agriculture which favors sustainability.
Many farmers will resort to automated payments and monitoring farms and markets. Blockchain connects the farmer directly to the consumer eliminating middlemen.
In conclusion
The integration of blockchain technology in agriculture is transforming supply chain transparency by ensuring secure, immutable, and traceable records from farm to table. By reducing fraud, improving food safety, and enhancing trust among farmers, distributors, and consumers. Blockchain is creating a more efficient and accountable agricultural ecosystem. Farmers benefit from fair pricing, while consumers gain access to verifiable information about the origin and quality of their food.
Despite challenges such as high implementation costs and digital infrastructure gaps, the long-term benefits of blockchain outweigh the obstacles. With continued investment, regulatory support, and innovative solutions like IoT integration. Blockchain has the potential to revolutionize the global agricultural supply chain. Making it more sustainable, transparent, and resilient for the future.
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