The blockchain technology has been a revolutionary innovation which has been changing the way we do things. Applications of this technology can be seen across various sectors – and blockchain tech has become so big that it is even being hyped as ‘Web 3.0’. While cryptocurrencies are the most popular application of this technology at the moment, there are a number of other possibilities which have now opened up. One such example is that of the agribusiness sector, which has a lot to benefit from this technology.
Over the course of this article, we will take a detailed look at the agribusiness sector – and how the blockchain technology is helping it evolve. Agriculture is just one of the names among the various industries and sectors that the blockchain technology benefits. However, before we deep-dive into how blockchain benefits agriculture, let us take a closer look at some of the basic features of a blockchain network:
Basic Features of a Blockchain Network
The following characteristic features of the blockchain technology are what makes it such a perfect technology for various businesses. Here’s a closer look at the basic features of the blockchain tech:
The kind of security that blockchain networks offer is quite unique. Data that is stored on a blockchain platform is tamper-proof and secure. It is an incorruptible network where data can neither be added nor be removed without the permission of various ‘nodes’ which guard the network. There is also a track of every change that is made to the data – which ensures that there are no loose ends and the accountability is quite clear. Each block on the blockchain is stored within another block which is within another block – thereby ensuring a high level of security.
Blockchain networks are trackable – which is another major benefit of the technology. They help ensure that every transaction on the network can be traced back to the source: this again adds to the security aspect of the technology but also helps businesses manage their supplies better.
Blockchain technology helps reduce costs: costs of documents’ transfer, proof of authentication, or even that of transfer of funds, particularly on an international scale. All these costs drop down significantly with the use of a blockchain network.
One of the core features of a blockchain network is the decentralized framework. There is no ‘governing authority’ when it comes to blockchain tech. In fact, a number of ‘nodes’ run the blockchain network. When the nodes verify the genuineness of a transaction, only then is it considered a success. This ‘transaction’ here can be replaced with any other authentication process, be it documents, or identity, etc. Decentralization also ensures that one person or organization does not have a dominating authority over the entire network. A number of decentralized applications (dApps) can also run over a blockchain network with the help of ‘smart contracts’ which are pre-set instructions based on which the dApps function.
Blockchain in Agriculture: How Blockchain is Revolutionizing the Agribusiness
The agribusiness industry, or simply the agricultural sector, is the third cog in the trio of industry-service-agriculture. It is a part of an extremely important global triad which is essential for global economies to function. While the industry and service sectors are critical for the economical growth of a nation, the agribusiness sector is important to keep a nation self-sufficient in terms of basics such as food.
Of late, a number of blockchain-focused startups are coming up and even big names in the industry are showing interest in backing them up. Among these blockchain based startups, agro-focused firms are also rising in number these days, Blockchain tech has brought forward a major innovation when it comes to the agricultural and agribusiness sectors. Here are the top three ways in which blockchain tech is innovating the agricultural sector:
Where Does Your Food Come From?
The use of blockchain technology in the agricultural sector can help the consumer keep a perfect track of where their food production is coming from. Using RFID tags, the data from which would be stored over blockchain-based ledgers, consumers would simply be able to scan a QR-code and track the journey of their food product right from the farm it was produced in to the warehouses it was stored in – and from the wholesalers to the retailer – and ultimately to them.
This ensures that the food that the consumer gets in the end is actually fresh as all the data is recorded with dates. This puts an end to malpractices such as false advertising and lableings.
Farmer Subsidies and Welfare Benefits
Farmers, particularly in developing and underdeveloped nations, are often burdened by various problems. Ranging from weather-related issues to a hike in the price of basic items that they need to farm, farmers in several nations such as India are often treated unfairly. However, governments of such countries often come up with schemes and welfare benefits for the farmers, which ensures that farming becomes easier for them.
The government of India, for instance, may not be interested in cryptocurrencies, but it strongly believes that blockchain can boost the agriculture sector. Its government recently issued a ‘Soil Card’ which would soon be linked to blockchain systems – which ensures that every farmer gets the subsidies as well as various other state-backed welfare benefits that he or she is entitled to. A record of all the soil card holders would be maintained and measured against the total funds released by the government. This ensures that the fund goes directly to the accounts of the farmers and middlemen cannot take away what rightfully belongs to the farmers.
Opening New Opportunities for Agribusinesses
A number of agro-focused startups are coming up of late. Some of these startups are coming out with farmer markets based on blockchain networks. This ensures that farmers get the best price for their produce – and the consumers also get the best quality of products which are verified by nodes over the blockchain network. With the credibility of both, the buyer and the seller ensured, traditional farmer markets are now getting online: a win-win situation for both, farmers as well as consumers.