Blockchain: A Technological Beacon For The Farming Industry

Thong Ming Sen

September 30, 2020

As humanity moves along its path towards modernization, the central themes seem to be those which fall along the lines of digitization and transformation.

Although this is all well and good as technological progress can help make our lives better, in our all out chase for development it is easy to lose sight of what is arguably our most important need i.e. for fresh produce.

With rapid urbanization resulting in the endless expansion of city boundaries,  agricultural land is becoming increasingly polluted so much so that soil pollution has been identified as one of the emerging threats to agriculture.

Besides accelerated urbanization, another contributing factor to soil pollution is the use of pesticides by farmers themselves whereby although this may help farmers grow more food on less land, the excessive or improper use of pesticides can cause serious repercussions to the health of the general population.

According to the World Health Organization (WHO)’s estimates, more than 3 million people from around the world end up in hospitals as a result of pesticide poisoning each year with 250,000 of them suffering premature deaths.

Tracking the Origins of Our Greens with Blockchain

As much as we need to take our greens for the maintenance of health, it is only natural to find ourselves wondering as to whether the greens which we hope would keep us healthy may end up poisoning us.

In comes blockchain as a technological supply chain tracking solution to warrant the provenance of agricultural produce. Standing testament to this is the United States (U.S)’ Department for Agriculture observation that it expects blockchain  to serve as an essential role in the management of complex supply chains.

In this regard, leading the way for the rest of the global agriculture industry is India’s Sahyadri Farmers Producer Co. which is one of the country’s largest farm producer organizations (FPOs).

Through the company’s blockchain-based tracking system, consumers would be able to trace the origins of agricultural produce back to the farmer who produced it using QR codes attached to the products which function as digital maps of the produce’s journey.

The transparency brought about by the use of the system would go a long way towards enhancing the confidence of consumers particularly for those who are health conscious and literally watch what they eat.

Economic Impetus to Keep Farmers in Their Trade

In a study conducted by Delhi-based Centre for Study of Developing Societies (CSDS) which is one of India’s premier social sciences research institute, it was found that a worrying 76% of farmers in the country has thought about quitting their farming jobs whereby one of the main reasons for this is their poor income which caused them to feel stressed out over their bleak future.

Little surprise therefore that the Indian government has stepped in to alleviate the plight of farmers in the country by using blockchain to help the farmers receive a better deal from the sales of their produce.

In May 2020, the Indian government had entered into an agreement with local startup Agri10x to develop a blockchain-based platform which leverages the disintermediation features of the technology whereby the platform would serve as a marketplace through which farmers can sell their produce directly to buyers without the need for middlemen.

Through the use of the platform, the previous situation whereby an estimated 69% to 73% of farmers in the country have had to sell their produce to middlemen at a price which is below the Minimum Support Price (MSP) i.e. at nearly zero profit would no longer arise.

On an international level, Indian farmers would be relieved to know that they would soon be able to sell their produce directly to traders and wholesalers from the United Arab Emirates (UAE) through the blockchain-based Agriota E-Marketplace (the “E-Marketplace”) which was developed with the aim of bridging the gap between farmers in India and the UAE’s food industry.

With India having exported more than US$1 billion worth of food products to the UAE in 2019, the E-Marketplace is set to take the trading of agricultural produce between India and the UAE to the next level under a mutually beneficial arrangement which entails a win-win situation for both the Indian farmers as well as traders and wholesalers from the UAE.

For the Indian farmers, the use of a multi-tier escrow structure under the E-Marketplace would ensure that they receive a fair price for their agricultural produce in a secured manner whereas for the traders and wholesalers from the UAE, the supply of agricultural produce from India would go a long way towards helping it achieve its goal to become a global leading hub in innovation-driven food security.

Sustainable Agriculture as the Way to Go

The role of agriculture in the sustenance of humanity is aptly illustrated by the fact that the second of the seventeen United Nation (UN)’s Sustainable Development Goals (SDGs) emphasizes on the promotion of sustainable agriculture as a means to end hunger and achieve global food security.

As we move towards the age of digital revolution, the use of blockchain-based supply chain tracking coupled with the establishment of decentralized agricultural produce marketplaces would go a long way towards ensuring the sustainability of the agriculture industry.

Suffice to say, blockchain is turning out to be the technological beacon which lights the way for the global farming industry.

Sources: UN, CoinDesk, CoinTelegraph, DownToEarth, BusinessStandard

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About the author
Thong Ming Sen

Content Strategist

Combining his professional experience as a corporate legal practitioner with his knowledge of blockchain, Ming Sen finds it fascinating to explore the endless possibilities of blockchain particularly in the regulatory domains of the financial services and capital markets sectors.

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