Agrinode-Blockchain in Agriculture
Agriculture has always played a vital role in the promotion of life and wellbeing across the globe. But it is in dire need of innovations. One technology is ready to offer new methods of work and interaction between producers and consumers and solve many industry problems — blockchain.
Agricultural trends are directly related to what is happening to the world’s population, namely continuous population growth, urbanization, and globalization.
This sector is so crucial to global prosperity and must adapt to a myriad of challenges over time, blockchain supporters have begun to introduce this technology into agriculture. But is it really a big leap forward or merely the senseless digging of an already sown field?
Using blockchain for agriculture: potential benefits
While blockchain technology has gained popularity, mainly due to its invasion of the financial sector, even its basic characteristics and capabilities can greatly transform other industries, including agriculture.
Transparency and trust
Most businesses are accustomed to trusting authority or seeking services from third parties. Blockchain is changing these habits: peer-to-peer architecture, cryptography, and mandatory verification of identity and transactions now ensure trust amongst participants in the network.
Customers also trust retailers and farmers more when they know where their food came from, how it was delivered, and how it got to a given supermarket. They can receive all this information through blockchain-based applications.
Intermediaries? No, thanks.
By utilizing blockchain, the need for a large number of intermediaries is significantly reduced. Banks, notaries, and many third-party sites are no longer necessary, so you can save money.
Once on the blockchain, always on the blockchain
Every piece of information added to the blockchain is immutable and time-stamped. Taking into account that it’s validated by multiple network participants, you can always be sure that the data is legitimate.
Fraud and malfunction detection
Blockchain doesn’t completely exclude the possibility of fraud, but it can help to seriously reduce risks. Take supply chains, for example. Since all stages of the supply chain can be tracked through the blockchain and the information is immutable, such an application becomes very difficult to manipulate.
Enhancing food quality and safety
The agri-food system is extremely large and complex. It needs to be simplified and improved not only for farmers, suppliers and retailers but also for the end consumer, as their health heavily depends on what products they buy.
Using blockchain-based platforms, supply chain participants can report emerging issues in real time. If a foodborne disease outbreak still occurs, retailers can determine where the contaminated food came from in a matter of seconds. This helps to implement quick food recalls and thereby save the health and even the lives of buyers.
Now that you are familiar with blockchain technology and its main functions, you are probably assuming that its main use case is the food supply chain. You are partially correct, but the range of possible blockchain use cases in agriculture is much wider, and literally extends from planting crops to the consumer’s dinner table.
Blockchain in food production
Blockchain implementation can start right from the field, but it’s more effective to combine two technologies — blockchain and the Internet of Things (IoT).
Together, the IoT and blockchain in agriculture are capable of driving the transition to smart farming. IoT sensors can collect and generate important data such as soil temperature and moisture, pH and water levels, pesticide and fertilizer information.
Once the data has been generated, it needs to be structured correctly by adding timestamps and demographic information. After that, the cleaned and well-structured data is converted into a format that machine learning (ML) algorithms will work on. This will provide even more important and useful information for the farmer. ML mechanisms are able to build forecasts for crop yield, crop identification, GrowScore, crop demand, and can even report crop quality recommendations.
After completing these steps, smart contracts built into the blockchain begin to process the data received. Smart contracts also allow all network participants to view the information stored on the blockchain, because the blockchain itself implies transparency and decentralization. Thus, the data is distributed and open to every node, but no one has control over the entire system.
This approach can help farmers optimize the use of resources. For example, they can calculate the amount and cost of water and fertilizer needed and plan how big a workforce will be required at a given point in time. Soil quality and yields can also be greatly improved because farmers will make informed decisions based on real facts gathered in their own fields.
Blockchain transforming food supply chains
Supply chains give many businesses headaches, not just in agriculture. Have you ever worked in a food-related business? If yes, you know how many inspections and stops a product goes through before it gets to the dinner table. And what about all the paperwork? There are piles of documents, which can easily be lost, damaged, or falsified.
Core challenges
Agricultural enterprises and retailers point out several common food supply chain problems: food quality and safety, food traceability, supply chain inefficiency, and trust.
Concerning food safety, eating contaminated and expired food can have dire consequences for a person’s health and life. The World Health Organization (WHO) estimates that nearly one in ten people contract foodborne illnesses each year, resulting in 420,000 deaths. Regardless of a country’s level of development, foodborne disease outbreaks can occur anywhere in the world.
Food traceability needs to be improved, as the ability to quickly find a product’s origin will also help to implement efficient food recalls from supermarket shelves, which, in turn, will protect people from consuming contaminated food.
Trust is an issue not only for the participants in the supply chain but also for the end consumer. The so-called conscious consumption is one of the latest trends in consumer behavior. People need to know where their food came from, how it was made, transported, and delivered to their supermarkets.
Smart agriculture means the wise use of natural resources and the reduction of environmental impact through the implementation of ICTs, blockchain, IoT, and other modern technologies for collecting and analyzing data. Traditional systems with centralized control are often vulnerable to data corruption, as the authority running the system can be biased and seek to achieve certain results by inputting the wrong information. Such platforms are also often subject to cyber-attacks.
Addressing challenges
In the case of blockchain technology, all data stored in blocks is transparent for each participant involved in the process. In addition, all information is verified and remains unchanged after being added to the blockchain. There is simply no “edit” option here.
Blockchain helps to collect data at all stages of crop and food production. Through decentralization and encryption, blockchain technology ensures the security of the entire system.
Blockchain + IoT = smart agriculture
What else is there? Blockchain seamlessly integrates with other technologies such as the IoT and AI, allowing agricultural workers to take advantage of all these innovations.
For example, this study suggests using blockchain and the Internet of Things to create a smart greenhouse system. Greenhouse technologies based on the IoT have already gained popularity, but the authors propose to add blockchain to the system since this will make it much more secure and improve data privacy.
Blockchain for weather prediction and agricultural insurance
Before making important decisions about what types of crop to grow, you need to know which way the wind blows, right? A farmer’s success is highly dependent on weather conditions, but these can often be very unpredictable. Crops may not survive if you don’t monitor and forecast possible natural disasters, and here’s how you can make it possible with blockchain technology.
Blockchain for eCommerce agriculture businesses
What’s most important to us when ordering goods online? Naturally, it’s trusting the manufacturer and the eCommerce platform, convenient payment methods, and the ability to track what we ordered. When it comes to food, our requirements become more specific, and this can be a problem for agricultural businesses.
First, it is often difficult for them to confirm the origin and delivery conditions of agricultural products. In addition, they need to process orders as quickly as possible so that the product doesn’t spoil and the company doesn’t end up losing consumer trust.
Benefits blockchain brings to eCommerce
Blockchain technology can provide solutions to many of the aforementioned problems, and others as well. Here are five main points:
Security
Encryption, private key, and multi-factor authentication are powerful tools that can keep the eCommerce platform secure. The information collected from the farm and recorded on the blockchain remains there as well, which is essential for producers and customers.
Effective supply chain management
Information about the farmer, product’s place of origin, logistics company, transportation conditions, warehouse, and even storage temperatures can be added to the blockchain. The data is verified, recorded on the blockchain, and remains immutable there.
Easier access to the online marketplace for smallholders
Traditional eCommerce often involves large companies, as online platforms receive a lot of orders and bring more revenue. At the same time, many agricultural products are made by households. Blockchain technology can significantly reduce transaction costs for them and enable smallholders to become market participants.
Payment methods
It’s quite obvious that with the introduction of blockchain, it becomes possible to use cryptocurrency in transactions with agricultural products, which will significantly reduce transaction costs. But, of course, this will not be the only payment option for buyers.
Consumer trust
Fear of counterfeiting is a strong reason why shoppers may bypass eCommerce platforms. Since the blockchain is a decentralized system where information is verified, timestamped, and publicly available, users will be assured of its authenticity and will be more willing to trust the farmer and their food products.
The future of blockchain technology in agriculture
In the future, we will certainly see the interdependent growth of the following three phenomena. It all starts with global population growth, then leads to an increase in demand for food, and this, in turn, requires innovation. One of the most promising solutions to this problem is blockchain technology.
Agricultural blockchain solutions can address many important industry challenges such as food tracking, food quality and safety, monitoring and weather forecasting. Blockchain helps improve the efficiency, transparency and accountability of the food supply chain and enhance trust between network participants. Consumer confidence increases as well, since with blockchain technology they get access to all the data about the products they buy. In this way, blockchain is able to make agriculture more efficient, profitable, and secure.
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