The term “Blockchain in Agriculture” might be new to you, and that’s okay! Blockchain technology sounds like it’s only for fintech and cryptocurrencies, but it has other uses.
Although still in its early stages, blockchain in agriculture shows undeniable prospects. In 2022, the market for blockchain solutions in agriculture and food supply chains grew to a value of $285 million.
However, a crucial question remains: can blockchain outlive the hype and deliver real value to the agricultural sector? Let’s find out!
Blockchain 101: The Basics
To understand how Blockchain works, think of a record book – a ledger. But instead of paper pages, it uses secure digital blocks linked together.
This digital ledger is used to make accounts and transactions. It’s easy to amend if you have the right permission, but once a transaction is recorded, it’s nearly impossible to alter it.
As a result, blockchain is a super secure way to track, verify, and transfer assets without relying on a bank, broker, or other intermediary.
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So, how does this technology work in agriculture? Let’s get to it.
Blockchain in Agriculture: How it Works
While blockchain is theoretically interesting, farm owners and growers want technology that delivers tangible benefits in the short run.
In agriculture, blockchain promises a single source of information about the state of your farm, inventory, and contracts. It also has the potential to eliminate fraud within the sector.
In addition, it works by recording every step of the food’s journey, from planting to harvest, processing, and transportation on a blockchain ledger.
This digital record can include details like the crop type, the farm it originated from, and even the weather conditions during growth.
Furthermore, everyone involved in the supply chain, from farmers and distributors to retailers and consumers, can access this information securely.
Blockchain in Agriculture: The Platforms and Players
In agriculture, blockchain technology is gaining serious traction. The market is expected to grow significantly from $285 million in 2022 to $7.4 billion by 2031.
At the forefront of this development are innovative agritech companies. These companies are using blockchain technology to transform the agricultural sector.
Let’s meet some of the players:
1. TE-FOOD
TE-FOOD uses blockchain to track food information from its source to your plate in one place. The company is based in Germany. It helps businesses show where their food comes from and how it’s handled.
Presently, TE-FOOD system in Vietnam is one of the biggest traceability programs in Southeast Asia.
- Blockchain Solutions: Farm-to-table food traceability solution that uses blockchain technology.
- Global Reach: The company has over 6,000 business customers, 400,000 operations per day, and serves over 150 million people.
- Financial Success: TE-FOOD’s revenue exceeded $36 million in 2022.
2. Ripe Technology
Ripe.io is a company working to transform the food supply chain through distributed supply chain software. The platform uses blockchain technology to provide data transparency throughout the chain.
The company was founded in 2017. It also focuses on sustainability, reduction of spoilage, and overall food safety.
- Blockchain Solutions: Uses technologies like Blockchain, IoT, and big data, to enhance transparency and trust in the food supply chain.
- Global Reach: ripe.io has partnered with industry giants such as R3 and Microsoft to enhance trust in food supply chains.
- Financial Success: As of the latest available data, ripe.io has secured a total funding of $2.44 million over one round from five investors.
3. AgriDigital
AgriDigital was established to digitise and connect the grain supply chain. In December 2016, the company successfully executed the world’s first physical commodity settlement on a blockchain.
Additionally, the company received accolades such as the AgFunder Most Innovative Startup, and Finnies Awards for Excellence in Blockchain and Distributed Ledger.
- Blockchain Solutions: Digitalizes grain management for over 11,600 agribusinesses globally.
- Global Reach: AgriDigital has over 10,000 active users. In 2021, the company introduced a grain management solution that facilitated transactions of 50 million metric tons of grain.
- Financial Success: AgriDigital has processed transactions worth $1 billion in the grain market.
4. AgriLedger
AgriLedger combines blockchain technology with AI and the Internet of Things (IoT) to boost transparency, streamline pricing, and increase wider access to capital at every value chain stage.
Founded in 2016, AgriLedger aims to remove unnecessary intermediaries and enhance collaboration between producers and key service providers using Distributed Ledger Technology (DLT) and Smart contracts.
- Blockchain Solutions: The company offers a blockchain-based AI platform that tracks food from farm to table. It also streamlines carbon credit verification and trading and provides data analytics solutions.
- Global Reach: AgriLedger works with companies, governments, and farmers to address challenges in the agricultural sector on a global scale.
- Financial Success: AgriLedger’s estimated annual revenue is $1.2 million annually.
Why Blockchain Matters in Agriculture
Here is how blockchain technology matters in agriculture.
1. Food Traceability and Security Concerns
Today, many consumers are curious about the journey their food takes from farm to table. This interest often arises from concerns about food safety and environmental sustainability.
Also, this concern can be a desire to support local farmers, animal welfare, or even fair labour practices.
When a food safety issue arises, the ability to trace the source of contaminated products becomes essential.
With blockchain technology, the consumer can look at a label and say, “Oh, I understand what diet this animal was fed. I understand where they were raised and what packing plant they came from.”
2. Agri-Food Supply Chain
The journey of food from farm to table is a complex one. It involves many interconnected players working together.
This network, known as the agri-food supply chain, includes stakeholders such as farmers, inspectors, logistics companies, regulatory agencies, banks, manufacturers, importers, and finally, consumers.
Blockchain has the potential to connect all parties in the supply chain through a digital transaction record. That means producers, storage operators, buyers, transporters and consumers are all linked together.
3. Secure and Transparent Transactions
Implementing blockchain technology ensures the data is tamper-proof, meaning it cannot be altered or manipulated.
Furthermore, the verified information stored on the blockchain can be used to improve efficiency throughout the supply chain. This significantly reduces the risk of fraud and eliminates any hidden costs or opaque payments.
4. Smart Contracts for Faster Payments
You remember I mentioned that data on blockchain can’t be altered, right? So what can you do with information that can’t be changed? You can execute contracts.
These are called Smart Contracts, which are used to automate the execution of an agreement. Everyone involved in the agreement can see the outcome immediately.
In agriculture, smart contracts are helpful because they help the farmers to get paid faster.
5. Tokenization of Farm Assets
Think of tokenization as a way to turn real-world farm assets like crops, animals, or even land into digital tokens on a blockchain. These certificates can be bought and sold, just like stocks.
Furthermore, it provides an innovative financial solution for farmers to use their assets to obtain funds without losing ownership.
Present Challenges of Blockchain in Agriculture
While blockchain technology holds great potential to transform the agricultural sector, it’s not without its hurdles.
One hurdle is scalability. Today’s blockchain systems can get bogged down by the massive amounts of data in agriculture. This can cause delays and higher costs and make it harder to track and verify food.
The second hurdle is data privacy and security concerns. Farmers, producers, and consumers are wary of sharing sensitive information on a public blockchain due to privacy risks and potential data breaches.
Moreover, regulatory approval plays a crucial role in the integration. Without clear regulatory guidelines and approval processes, the adoption of blockchain technology in agriculture may face obstacles and delays.
Final Thoughts
The future of blockchain in agriculture is no longer a distant future. It’s happening right now!
This technology will keep expanding because it offers many benefits for transparency and effectiveness.
And the best part? There are many opportunities for those who want to get involved. Truly, the potential of blockchain in agriculture is limitless!
