“Ensuring Efficiency, Trust and Transparency from Farms to Groceries”
Despite what the news may make us believe, blockchain has a vast range of applications beyond cryptocurrencies. The technology is set to radically transform a large number of industries, from healthcare to law, to real estate, to banking.
However, one little-explored industry that blockchain has the potential to revolutionize completely is agriculture. It may not seem as glamorous as banking or health care, but this massive industry underpins our society. More importantly, it has a growing number of issues that desperately need solving.
Uses Cases of Blockchain in Agriculture:
1. Crop and Food Production
Catering the needs of the increasing population by growing more food with minimal resources while reducing environmental footprint, maximizing customer satisfaction, enabling transparency across the supply chain and guaranteeing fair income to farmers while handling the vagaries of the weather- the agriculture sector has a lot of challenges to overcome while improving profitability under unfavorable environmental conditions.
From farmer to manufacturer and grocer, blockchain coupled with IoT is remodeling the food production industry. The blockchain is all set to make farming a sustainable practice by optimizing farming resources including water, labor, and fertilizer using a simplified approach.
Let us explore how blockchain combined with IoT can facilitate farmers and other stakeholders in taking optimum decisions.
Here is a detailed process of how blockchain can transform the way crops or food items are produced:
Step 1: IoT devices generating data
The population across the globe is expected to touch 9.6 billion by 2050 and therefore, to feed the increasing population, the farming industry is adopting IoT devices and sensors. In IoT-enabled smart farming, a system is built for keeping an eye on the crop field using sensors (temperature, pH, soil moisture, humidity, light).
IoT sensors and devices generate data which can help farmers make well-informed decisions related to the growth of the crops. The information gathered from the IoT devices first need to be structured before getting saved on the data storage.
Step 2: Cleaning and Enrichment of the collected data
Before saving the collected data on the blockchain, there is a need to ensure that it is structured and understandable.
Data Enrichment is done to add more value to improve the quality of the captured information. The following two steps ensure that the data is cleaned before it gets stored on the distributed storage platform:
- Adding Meta Information
Information related to timestamp, demography, and type should be added to the data for making it more structured.
- Making data ready for compliance
Saving data on the blockchain does not mean that it should not be compliant. Instead, it makes compliance enforcement more seamless.
Meeting compliance ensures that the personally identifiable information associated with the data collected from IoT devices is protected and follows security measures.
Once the data is enriched, it is put into the machine learning-ready format.
Step 3: Making the data more insightful with machine learning algorithms
Machine Learning is applied to the data generated from the sensors to provide useful insights. Predictive models can drive several high-value use-cases including:
- Crop Quality Recommendations
- Crop Identification
- Crop Yield Prediction
- GrowScore (Automated crop growth factor)
- Crop Demand Prediction
From the information captured through machine learning algorithms, farmers and other stakeholders will be able to make improvements in the irrigation system from time to time.
The insightful data should be stored on the blockchain to enable agriculture market participants such as growers, innovators, producers, service providers and retailers to access it transparently.
Step 4: Data gets saved on the blockchain
The high-value data gathered by applying machine learning gets stored in IPFS (Interplanetary File System), a distributed storage platform having addresses hashed and stored on the blockchain.
Unlike the existing method to store essential information in the centralized server which has a risk of single point of failure, the data is distributed across every node in the network preventing a central authority to control the system.
The information captured in the blockchain will trigger smart contracts to process rules defined within them.
Smart contracts facilitate the exchange of data stored on the blockchain within the specific stakeholders in the system.
Since information will be visible to every agriculture market participant, it will become seamless for them to bring efficiency in crop or food production.
2. Food Supply Chain
Food Supply Chain tracking is critical to exploring the source from where the food has originated or grown. It is essential to ensure that the supplied eatables are safe to eat.
But when it comes to the way the food supply chain is managed currently, it becomes challenging for the food producers and retailers to confirm the provenance of the products. While facing the constant threat from adulteration, food frauds cost UK families upto £1.17 billion per year.
With the emergence of the blockchain, it has become possible to bring trust and transparency in the food supply chain ecosystem, ensuring food safety for everyone. Read further to discover how.
Here is an in-depth explanation of how the food supply chain blockchain can reduce food frauds:
Step 1: IoT sensors generating data or Farmers storing data
As discussed in the above use-case, smart farming allows sensors to generate crucial information related to the crops sown in the fields.
If the farmer is not using technology-driven methods, then they can simply store the essential information such as crop quality, type of seed and weather conditions under which the crops were sown using their mobile application.
The data captured either by using IoT sensors or manually by farmers is saved in the distributed storage platform, i.e., IPFS with addresses stored in the blockchain.
Step 2: Distribution of grown-up crops to the food processing companies
Once the crops are grown up, the food processing companies start bidding on the bidding platform.
The crops can be transported to the refineries via IoT-enabled vehicles, capturing temperature conditions under which the items are kept and delivered.
After the bid is validated through smart contracts, the crops undergo processing and companies store information captured at every step of the process on the blockchain.
The information gathered from refineries can help wholesalers or retailers to confirm if the delivered food is of good quality or not.
Storing data on the blockchain can also ensure if the compliance has been met at every step of the food supply chain.
Step 3: Supply of Processed Food to Wholesalers and Retailers
After the food items or crops are processed, wholesalers and retailers can bid for the products they want through the bidding platform. Similar to the transportation of crops to the refineries, the food items are also distributed to wholesalers and retailers in IoT-enabled vehicles.
Blockchain supply chain offers traceability by helping food companies conducting food recalls or investigations quickly and seamlessly.
Step 4: Consumers can backtrace the supply chain
From farm origination details to transportation details, batch numbers, food processing and factory data, expiration details, storage temperature and other details digitally linked to the food items within the blockchain, consumers can explore everything by back tracing the supply chain.
The food supply chain based on the blockchain can help different stakeholders to access information related to the food’s quality at every stage.
As blockchain brings transparency in the food supply chain ecosystem, it will be easier to figure out when and how food has been contaminated.
Let’s have a look at the architecture for real-time bidding platform built on the blockchain which will enable all stakeholders to bid for the crops and processed food items.
The architecture comprises the systems required to set bidding parameters, create campaigns, serve ads, place the bids, analyze the success of the campaign and store the results.
The application for campaign management including features like dashboards and reporting are hosted on Google App Engine. The campaign information uploaded by the different users of the system is stored in the blockchain ledger.
When any of the stakeholders access content on the web using PC or other devices, an ad placement request is triggered via Double-click or Ad exchange. The load balancer gets the bid request and forwards it to the Bid Server where tables are matched to examine what bid to return.
The ads can be fetched and stored directly from the Blockchain. Pixel Servers running on the top of Google Compute Engine fulfill the ads requests. Modeling and Analytics run on the ads and campaign results via a wide range of methods. BigQueryis used for querying and loading data to explore the campaign’s effectiveness.
On the other hand, the prediction API is used for implementing machine learning algorithms to the history of bidding results for improving the campaigns.
3. Controlling Weather Crisis
Farmers usually have to confront unpredictable weather conditions while growing different types of crops.
Therefore, predicting and monitoring weather conditions are essential to the crop survival.
Many of the crops grown in the US cannot tolerate flooding due to excessive spring rains. The oxygen concentration level reaches zero, making it difficult for the plants to perform life-sustaining functions like water uptake, root growth and respiration.
Moreover, the lack of transparency in the current food chain ecosystems can result in unclear and high surge pricing. Consumers don’t have an idea when did the crops suffer lousy weather conditions and what led to the increased costs.
Due to the ability of blockchain to offer traceability and transparency, farmers and other stakeholders will be able to get a clear understanding of the price differences in the food distribution market.
Since authorized parties can trace the weather conditions from the blockchain ledger, farmers can quickly get the crop insurance claims through smart contracts.
Let’s explore how blockchain can help control bad weather situations.
A step-by-step Blockchain-enabled Weather Control Process for Agricultural Fields
Step 1: Agricultural Weather Stations sending essential information to the blockchain
Smart agriculture enables farmers to understand the crop’s behavior by deploying sensors and mapping fields. Placing agricultural weather stations within the farms can help generate crucial information such as soil temperature at different heights, air temperature, leaf wetness, rainfall, wind speed, dew point temperature, relative humidity, solar radiation, wind direction and atmospheric pressure.
All of the above parameters are measured, recorded and saved in the blockchain enabling farmers and other authorized entities to access it transparently.
Step 2: Farmers can take preventive actions
By analyzing the data generated by the weather station, farmers will be able to make informed decisions related to the farming.
For example, if they figure out that it may rain heavily in the next two days, it will help them to take necessary actions in advance.
Step 3: Quick application for the crop insurance
In case of the damage during a weather crisis, farmers can quickly apply for the crop insurance claim amount through the blockchain.
The transparent and immutable behavior of the blockchain will enable insurance companies and other authorized parties to access the data captured by the smart weather station easily.
They can directly query the blockchain to fetch the required information with the help of smart contracts. After the insurance claim request is approved, farmers will automatically get the requested amount in their respective wallets.
Therefore, a blockchain-enabled solution can help farmers get the compensation seamlessly and quickly.
4. Managing Agricultural Finance
Lack of transparency, credit histories and difficulties in contract enforcement are some of the myriad problems confronting between formal financial inclusion and smallholders.
The inability to access financial services can have an adverse impact on the performance of agricultural value chains due to which producers cannot maximize their yields and buyers face struggles ensuring an efficient supply of commodities.
The financial services do not only enable smallholders to invest in the agriculture, but also assist them in relieving liquidity constraints. It results in the difficulty for buyers to pay farmers on delivery, forcing poor smallholders to sell crops at the lower rates.
Blockchain brings fairness in the process of agricultural finance via transparency and shared control accessibility.
Here’s how blockchain could help in managing agricultural finance
Step 1: Stakeholders sharing information at every step of food production
Every time a transaction will take place, it will be stored in the blockchain, enabling all the involved parties to access every single transaction transparently.
Sharing essential information at every step of the food production will bring more fairness to the entire system.
Step 2: Auditors can effectively conduct audits
Having the ability to store information permanently and securely, the blockchain can also serve as a source of verification for the recorded transactions.
Instead of asking farmers or retailers to send financial reports for auditing purposes, the auditors will be able to verify the transactions directly via blockchain ledgers.
The automated auditing process can make the audit environment cost-effective. Rather than carrying out assessments at the end of the year, audit firms will be in a position to conduct audits throughout the period.
Blockchain will make it possible to replace the random auditing by auditors, making it more effective to access every single transaction.
Here are the benefits of implementing the Blockchain in Agriculture
1. Improved Quality Control and Food Safety
One of the significant applications of blockchain is bringing increased transparency to the supply chain. It can help us to remove ineffective processes and ensure optimal quality control conditions.
For instance, crop failure is a prevalent issue faced by farmers around the globe. It usually happens because of unfavorable climatic conditions, such as poorly distributed rainfall and erratic weather.
To solve this, companies like IBM are already investing millions into precision agriculture, creating IoT devices that allow farmers to monitor factors such as the soil quality, pests, and irrigation that could affect their crops.
By connecting these devices to a blockchain ledger, the results can be updated continuously and viewed in real time by just looking at an application on their phone. It will allow them to check that all factors are as they should be. If something is wrong, they will be notified immediately and can make adjustments before it is too late.
Even more importantly, in the case of problems such as a food safety outbreak, it also gives us the ability to find the source of the issue almost immediately. This has the potential to save more than just time and money in the supply chain process—it could even save lives.
2. Increased Traceability in the Supply Chain
We’re witnessing a dramatic rise in consumer expectations for food standards. Most notably, more and more consumers want to know where their food comes from.
Using blockchain technology will solve this problem by letting consumers know exactly where their food originated, who planted it, and how fresh it is. It will only require workers to scan the product at each stage in the process to update the database with information.
Just imagine buying something from the store and being able to find out absolutely everything about the product by just scanning the barcode with your smartphone app.
Increasing the traceability of the supply chain will have a considerable impact in reducing food fraud, false labeling, and cutting intermediaries out of the process to ensure producers get paid fairly for their efforts and that consumers know exactly what they’re paying for.
Increased traceability will also help farmers by allowing them to record and update the status of their crops and track them through the process of planting, harvesting, storage, and delivery by simply using an app on their smartphone so they can see the exact status of their products at all times and make adjustments if necessary.
Considering that roughly one-third of the food produced for human consumption—that’s approximately 1.3 billion tons—every year is wasted, this innovation is long overdue. In Australia, some farmers are already utilizing blockchain to track their production and reduce waste.
3. Increased Efficiency for Farmers
Currently, most farmers use a combination of multiple software apps, spreadsheets, and notes to record their data and manage their processes. However, this is complicated and requires a lot of effort to send this data to other service providers.
Blockchain technology would allow farmers to store all of their data in one place so that it can easily be accessed by those who need it, simplifying the entire process and saving valuable time and energy.
For instance, they’d be able to keep track of things such as:
- Their business goals, and how they plan to reach these goals.
- The number of animals, health issues with animals, what they eat, and how often they should be fed.
- How many different crop varieties are there, when they were planted, and how they are performing.
- Their employee schedule, how much each employee needs to be paid, and how many hours each employee has worked.
- Income and expenses.
Keeping track of everything on a single application instead of having a variety of different methods clarifies the process and diminishes the chance of valuable information getting lost.
4. Fairer Payment for Farmers
There are currently several problems that make it difficult for farmers to get paid for their produce.
First of all, it often takes weeks for farmers to receive the full payment for their goods.
To make matters worse, traditional payment mechanisms—usually wire transfers—often take a significant chunk of the farmers’ earnings.
Blockchain based smart contracts work by triggering payments automatically as soon as a specific, previously-specified condition has been fulfilled by the buyer—and without charging extortionate transaction fees.
It means that the farmer could theoretically receive payment for their goods as soon as they have been delivered, without a significant portion of their income being taken away from them in the process.
Also, many farmers experience difficulty when they try to sell their products in the market at a fair price. Right now, the intermediaries enjoy most of the profits, while doing a minimal amount of work in comparison.
Smart contracts would completely eradicate the need for these middlemen, as it would allow farmers to connect directly with retailers. Therefore, they’d be able to receive a fairer price for their goods.
The Future of Blockchain in the Agriculture Industry
The blockchain is still a very recent technology, so there’s a long way to go before its full set of applications can be developed and put into practice.
However, it’s becoming increasingly clear that there are opportunities in the agriculture industry. The global agriculture industry is now worth over 2.4 trillion dollars and has over one billion people involved worldwide. Now, more than ever, there is an opportunity for innovation.
Contact our team of Blockchain Experts to get a better understanding of the blockchain implementation in agriculture industry.
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