One of the rarely talked about areas where blockchain can “break” existing constraints is Agriculture. The industry accounts for 6.4% of all world economic production, employs 40% of the total global workforce, and total worldwide output is approximately $5 trillion.
According to ReportLinker, blockchain in food and agriculture supply chains was estimated at $60.8 million in 2018 and is expected to reach $429.7 million by 2023.
Blockchain is a ledger consisting of accounts and transactions written and stored by the participants. This is a reliable technology that opens up opportunities for development for farms, warehouses and agricultural contract enforcement. Tracking food origin, agricultural insurance, farming information, trading agricultural products or assisting in logistics chain management with this technology will help Vietnam improve its competitive position.
Although this technology belongs to the back-end processing of applications and software, its superiority will help solve previously difficult problems with smart contracts and incentive and operating mechanisms. characteristic system. In particular, transparency and access to public information on the Internet of all transaction information will help create trust between producers, manufacturers, distributors and consumers.
The big chunks that blockchain can help the agriculture industry include:
- Agricultural insurance: Focusing on authentic data if there is volatility and impact, 3rd parties will provide important data to make insurance decisions for farmers. Such information could be weather information. Blockchain technology that provides private key encryption is a powerful tool that provides authentication requirements. Therefore, it can securely link data on all aspects of growing and harvesting agricultural products and cannot change that information.
Etherisc1, a company based in Switzerland, provides blockchain technology-based decentralized crop insurance that provides payments based on weather data in DIP as native currency (token decentralized insurance protocol).
WorldCover2, an insurance provider based in New York City, offers index insurance to smallholder farmers in Ghana, emulating the application of Ethereum blockchain-based smart contracts . As a result, payments will be made in the Ether cryptocurrency .
Another smart crop insurance provider is Arbol3. At Arbol, a farmer can propose a contract that includes premium payments, payouts and payment-triggered weather events. An investor, acting as a counterparty, can then agree to that proposed contract. Initial and final payments are made in Ether
- Smart farming: A smart agriculture based on digitizing, controlling and adjusting the influencing factors of the environment, drugs for plants and animals, to the diet, .. Support devices need to be continuously connect and transmit information to ensure adequate information for the processing system. This information makes it easier for farm owners to know the operation status, growth or production time of their products more easily through familiar devices such as computers, mobile phones or computers. tablet. This is achieved by combining IoTs (devices connected to each other via the Internet) and Blockchain technology. This is the basis for farm owners to use as a basis to retrieve farming information and improve product value. On the other hand, companies supplying agricultural materials better understand,
- Food supply chain : The global food supply chain has experienced strong and complex developments. Many problems arise for food such as food traceability, food safety and quality, food trust and inefficient supply chains, which add to the risks for society as a whole. economy and human health.
Blockchain technology can enable more efficient supply chain management than traditional monitoring mechanisms by reducing the cost of signaling for each entity (Jig et al., 2019). Each link in the supply chain – manufacturer, place of origin, shipping company, destination, intermodal, warehouse and last mile – represents a block of information, with the advantage of being able to visibility, aggregation, validation, automation and resiliency
From the role of a manufacturer, the use of blockchain technology helps to establish a relationship of trust with consumers and build a reputation for their products, by providing individual product information in the blockchain one at a time. transparent way. Enterprises can achieve better product value and thus increase competitiveness. This will make it difficult for fraudulent suppliers and low quality products to stay in the market and force all suppliers to improve product quality throughout the agricultural and food sectors.
From the role of the consumer, blockchain provides authentic and trusted information about how food is produced and transacted. It helps to address consumer concerns about food safety, quality and environmental friendliness.
The use of blockchain provides the ability for consumers to interact with producers as consumers can understand the food production process more conveniently and in more detail. It assists consumers by removing obstacles in the exchange of goods to tighten their relationship, and thus strengthens consumer trust and confidence in food safety. From the point of view of regulators, blockchain provides reliable and accurate information for them to implement effective and informed regulations.
4. E-commerce of agricultural products: Many agricultural products are produced by households. Due to low transaction volume and small size, limited understanding of e-commerce reduces the chances of entering this market.
Old Farmers shopping mall, an e-commerce company in China’s Hubei province, can be traced back to the source, and all production information can be queried by customers. Before the goods were put on the platform, detailed information was recorded including seeding, watering, fertilizing and deworming. They also provide basic knowledge of the manufacturer, shipping logistics, storage dates, and storage temperatures. Customers only need to scan the QR code on the goods, which is unique and all information will be available to access. This method can effectively avoid counterfeiting by bad merchants and regenerate consumer confidence in agricultural products from e-commerce and its suppliers.
Blockchain application in traceability
In the framework of this article, we go to analyze more clearly the effects of blockchain on traceability, one of the two outstanding problems of agricultural products.
To build a sustainable agriculture, we need to provide consumers with information from the time of seed import, the process of farming, processing and distribution to create a firm belief in the product. Since then, the value and opportunity to penetrate difficult markets become more open.
You go into the supermarket, you will want to know where the things you want to buy come from, are harvested, processed and who is responsible when we ourselves are unfortunate enough to have problems.
Blockchain has the ability to record product information from origin to retail store. It provides a secure and immutable way to store data collected at the start of the supply chain, e.g. livestock DNA, pesticide residues of grains or vegetables. Such information can be checked and verified by any party involved in the product’s supply chain. Collecting such data for all products can be very expensive, but it can be done on samples. The transparency of such information could help uncover, for example, the containment of undeclared meat as happened in the 2013 horsemeat scandal in Europe.
Some prominent blockchain developers serving the agricultural industry providing traceability solutions include Ripe.io, AgriDigital.
Many solutions powered by blockchain technology have been proposed to improve the traceability of agricultural products. Tian proposed an agri-food supply chain traceability system using Radio Frequency Identification (RFID) technology, a contactless automatic identification communication technology. It can track products with reliable information throughout the entire supply chain. The use of blockchain ensures that the records of production, process, storage and distribution in the system are reliable and genuine. Caro et al. (2018) proposes a blockchain-based traceability system that is seamlessly linked to IoT devices, providing digital data on production and consumption. Traceability is achieved using both the Ethereum and Hyperledger Sawtooth blockchain platforms.
Many companies have committed to explore the application of blockchain technology in food safety management and actively do so. For example, Wal-Mart, Alibaba, and JD.com are actively implementing blockchain food traceability projects and using blockchain technology to track the entire process of food production, processing, and sales. .
In October 2016, retail giant Wal-Mart, Tsinghua University and IBM applied the Hyperledger blockchain system to food supply chain management, exploring the Chinese pork supply chain and the supply chain. United States mango application to test the practical application methods and benefits of blockchain technology.
In March 2017, Alibaba and Australia Post explored blockchain to combat food adulteration. In August 2017, the world’s 10 largest food and fast-moving consumer goods (FMCG) suppliers, including Wal-Mart, Nestle, Dole and Golden Food, partnered with IBM to integrate blockchain into the supply chain. their own so that food vendors’ misconduct can be detected more quickly. In this partnership, IBM’s blockchain platform is designed to help food companies improve the visibility and traceability of their supply chains and make food safer.
Current blockchain technology in the food supply chain is still in the early stages of development. At the same time, there are many immature and imperfect places in the implementation of blockchain technology. Furthermore, the adoption of blockchain technology requires the broad participation and cooperation of stakeholders in the food supply chain, which is crucial to play its full role. Due to the characteristics of transparency, security and decentralization, blockchain technology allows to track food quality information throughout the entire supply chain.
Outstanding startups in the field of Agricultural Blockchain
AgriDigital : AgriDigital has a cloud-based commodity management solution for marketing to the global grain industry. It connects grain farmers, buyers, website operators and financiers through a single platform, allowing them to contract, deliver and pay securely and in real time.
Building blocks : using blockchain to transfer cash – The World Food Program (WFP) is testing blockchain technology as part of a pilot of Building Blocks, to make money transfers more efficient, secure and transparent. This can save millions of dollars. Specifically, WFP is using blockchain to more effectively provide food assistance to approximately 100,000 Syrian refugees in Jordan. The aim is to reach all 500,000 refugees living in camps and in host communities in Jordan by 2018.
AgUnity : AgUnity has developed a solution for the poorest farmers in the world. The AgUnity app is a simple mobile service that helps small farmers plan, trade and track their daily transactions. This is a way for farmers to collaborate, store value, save money, and easily buy products and services. This app ensures that everyone gets paid by creating a secure profile when smallholder farmers deliver their crops to a co-op or rent another farmer’s equipment.
TE FOODS: is the world’s largest farm-to-table food traceability solution. It serves more than 6000 business customers and processes 400,000 business transactions per day. TE-FOOD provides solutions for operations such as object recognition and product serialization, data collection through B2B interfaces or/and mobile applications, data storage on blockchain, data processing data to follow custom protocols and tools to present food history to consumers.
Farm traceability allows supply chain companies to submit their event data to TE-FOOD, registering them on the blockchain while connecting IDs to keep data integrity. The blockchain ledger contains proof of information entered by various supply chain participants. The transparent, immutable and irreparable approach of blockchain technology assures consumers that data can be falsified by a food company.
Hello Tractor – Tech giant IBM has partnered with Nigerian agricultural technology startup Hello Tractor to launch a new blockchain farming application, which is being tested in Kenya. Hello Tractor is an agricultural technology company that connects tractor owners with smallholder farmers in need of tractor service through Internet of Things technology. Their technology creates a win-win situation for both tractor owners and farmers as tractor owners can operate their tractor rental business more profitably and farmers can get the right to use their own tractors. use tractor services.
AgriLedger : This company has begun testing a blockchain-based mobile phone solution that provides small-scale farmers with market pricing information and transparency on middleman costs in Kenya. This will provide many benefits to farmers and suppliers including efficiency and traceability – two factors that are currently lacking and are creating serious problems in today’s ecosystems. This will go a long way towards ensuring food safety and security.
BanQu : The solution provides an Ethereum blockchain-based solution that allows farmers to use their mobile phones to record personal information and transaction history verified by a network of friends, family, partners. agribusiness, etc., with a pilot project in the Congo. These digital identities can then be used to apply for credit and open up the world of financial services to this unrestricted sector.
Shamba Records : Kenyan agricultural technology startup Shamba Records has built a blockchain-based platform that uses artificial intelligence (AI) and big data to collect farmers’ harvest records, process payments payments and credit. The platform provides users with features such as data collection and mapping, payment aggregation, smart contracts and bulk SMS, making farms more efficient and information gathering possible for allow them to access financial services.