Agrinode-Expand financial options for farmers
In the case of developing economies, farmers have limited access to financial resources. With the help of blockchain technology, farmers can show what they have harvested and use it for verification, funding for crop insurance. If a farmer manages to apply for crop insurance and at the same time uses blockchain technology to track weather conditions, an insurance company can directly request the blockchain to obtain the necessary information using smart contracts. When the claim is approved, farmers will automatically receive compensation on their wallets.
Blockchain will help farmers by providing them with quicker access towards verification and to be financially viable in developing economies. Etherisc, a Germany-based company, works exactly like this. The firm provides decentralized crop insurance based on blockchain. They offer farmers to select crop types and field locations first, and then farmers receive automatic payments based on weather information. Farmers receive money in DIP (Decentralized Insurance Protocol) tokens — Etherisc’s own cryptocurrency. The solution is built on Etherisc’s “Generic Insurance Framework” on Etherеum. It utilizes local weather parameters, and in extreme weather conditions, insurance policies are automatically activated by incoming data, resulting in fair, timely, and transparent payments that insurers can’t tamper with or change.
Agricultural insurance is a risk management tool to help stabilize farm income and investment in the event of losses, due to natural disasters or low market prices. These tools cushion the shock of income losses to help farmers initiate crop production after a bad agricultural year and spread the losses over time to enable continued investments in agriculture. Agricultural insurance products are often unavailable in developing countries and in particular for smallholder farmers. Digital technologies provide the possibility to address some of these challenges by enhancing actuarial estimates and reducing the cost of delivering and monitoring insurance products. In the case of weather-indexed crop insurance, for instance, mobile phones allow consumers to be geotagged, which (in combination with automated weather stations and satellite imaging) eliminates the need for insurance providers to conduct in-field loss assessments.
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