Blockchain Technology in Smart Agriculture : Creating Trust

The agricultural sector continues to lag behind other industries when it comes to embracing the latest technologies. While the introduction and adoption of state-of-the-art machinery for production are evident, traditional methods are still employed for pre-harvest and post-harvest processing. For example, tracking, storing, and communicating agriculture information are still done using conventional methods. 

Consequently, these circumstances lead to communication gaps, inadequate provision of product information to consumers, unfair remuneration for farmers, and intermediaries capitalizing on inflated retail prices to maximize their profits. However, utilizing blockchain and IoT devices makes it possible to fully automate the process while building absolute trust among all the supply chain stakeholders. 

In the following blog, we will explore how Blockchain technology and IoT assist the agriculture industry, their advantages and disadvantages, and the applications of the blockchain-based smart agriculture market. 

Understanding the Concept of Smart Agriculture and Blockchain Technology

Agriculture plays a vital role in the economy of any nation as it provides food to the entire population and establishes connections with various related industries. However, in traditional farming approaches, farmers spent considerable time in the field, continuously monitoring crop conditions and land. As farms expanded with time, it became increasingly difficult for farmers to monitor every aspect around them. This challenge was particularly evident in micro-farming, where numerous remote land plots are cultivated for various crops, each demanding specific conditions and meticulous control over soil and water. Hence, smart agriculture systems were introduced to eliminate these problems. 

Smart agriculture is a management concept that aims to equip the agricultural sector with the necessary infrastructure to harness cutting-edge technology, such as big data, cloud computing, and the Internet of Things (IoT). This enables the industry to track, monitor, automate, and analyze its operations effectively. Smart agriculture systems enhance resource management, boost productivity, and minimize wastage by leveraging remote sensing technologies. However, still, many disadvantages still led to Blockchain-based Smart Agriculture. 

In simple terms, Blockchain technology enables users to establish a digital record of transactions and distribute that record among participants within the value chain. It establishes a singular, reliable source of information. Blockchain presents a distinctive approach to information sharing in processes that involve multiple parties, as it enables the creation of a real-time, comprehensive view of the entire supply chain. This eliminates the need for questioning the accuracy of the information recorded within the chain, ensuring transparency and certainty.

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The Benefits of Adopting Blockchain Technology in Agriculture

In agriculture, the utilization of Blockchain Technology facilitates transparent peer-to-peer transactions, eliminating the necessity of intermediaries like banks (as seen in the case of cryptocurrencies) or middlemen in the agricultural industry. By eliminating the need for a central authority, this technology transforms the provision of trust. 

As a result, it helps restore trust between producers and customers, leading to potential reductions in transaction costs within the agri-food sector. The following are the primary advantages of adopting blockchain:

  1. Enhances efficiency and traceability throughout the supply chain:
    Blockchain technology solves data management issues in real-time throughout the supply chains of agricultural products. The Blockchain offers a transparent and immutable registry of information. The registry offers a streamlined and user-friendly solution to monitor and enhance traceability in the supply chain, improving efficiency. 

    Blockchain enhances security and trust among stakeholders, which proves valuable for product exports. In scenarios such as product recalls due to health concerns or tracking the usage of agrochemicals and fertilizers, Blockchain enables rapid response and ensures traceability.

  1. Streamline production processes:
    Blockchain technology has a positive impact on agriculture productivity and efficiency. For example, the collected information could be stored in the Blockchain and utilized for certain actions. Measurable information involves the utilization of fertilizer or agrochemicals, the temperature of the soil, weather conditions, and water availability. 
  1. Increase transparency:
    With the growing demand of consumers to know the origin of the product, Blockchain technology has opened the window for new opportunities. In highly competitive fields, such as farming commodities, final users value access to data regarding the production process, the complete quality of the product, and the sellers of the product. 
  1. Improves management of farm finances:
    The agricultural sector faces challenges in managing financial, accounting, and administrative information, which can hinder the determination of competitive product prices. However, the implementation of Blockchain can address these issues by enhancing transparency, accessibility, and real-time efficiency in managing such data. The immutable nature of Blockchain registries can serve as a valuable ally for farmers.

Challenges of Adopting Blockchain Technology in Smart Agriculture

  1. Lack of strict regulation:
    The absence of stringent regulatory guidelines from governments poses challenges to the widespread adoption of Blockchain technology. Many countries face regulatory issues and lack readiness to embrace blockchain. Further development and research are necessary for Blockchain to reach its full potential. Governments must establish comprehensive guidelines that facilitate the adoption of Blockchain in agro-based industries. Without adequate government support, numerous sectors may struggle to implement Blockchain successfully. 
  1. Security issues:
    Security concerns are of utmost importance and present a significant challenge for Blockchain technology providers. Industries express apprehension that shared information could be vulnerable to hacking or loss. While top management may have full confidence in Blockchain and its associated technologies, there remains a concern that competitors could exploit data sharing in agro-industries to gain valuable insights. The agro-industry places great emphasis on the security of transferred data and information.
  1. Lack of awareness among various parties:
    Many stakeholders are included in the agriculture supply chain operations that are not aware or educated about the latest innovations. So, this develops an issue among various partners in adopting Blockchain in agro-industries. Due to a lack of awareness regarding the latest technologies, late adoption of innovative technologies is found in the industries. Employees are required to have a piece of proper knowledge and skills regarding blockchain.  
  1. Blockchain system complexity:
    Blockchain technology adoption needs massive financial investments, including employee training. Infrastructure should be designed as per the adoption process. There is also uncertainty about the company’s profitability after implementing Blockchain in its systems. Big firms can still adopt innovative technology as they can easily take risks, however, it is difficult for smaller firms to take such a risk.
  1. Huge Investment
    The widespread integration of Blockchain requires substantial financial investments, which encompass the training of employees. The infrastructure must be tailored to align with the adoption process. Moreover, there is an element of uncertainty regarding the company’s profitability once Blockchain is implemented within its systems. While larger corporations can embrace innovative technologies and undertake risks, smaller firms face challenges in doing so.

Application of Blockchain Technology in the Smart Agricultural Futures Market

  1. Smart Farming Technology
    Farming companies, such as Filament have started to build smart agriculture technology. This technology enables the selling of products by connecting multiple networks to the actual items. The company developed a coin-sized piece of technology to assist users in safe transactions against a blockchain. 
  1. Food Supply Chain:
    Globalization trends have led to a significant expansion and intensification of the food supply chain. However, this growth has brought forth numerous difficulties, such as food safety, quality, traceability, trust, and inefficiencies within the supply chain. These challenges have placed a burden on both the economy and society, posing risks to the health of consumers.

    Blockchain technology plays a vital role in addressing many of these challenges by enabling the establishment of trust between producers and consumers. Major companies like Wal-Mart,, and Alibaba have embraced blockchain-based traceability initiatives, leveraging its principles to closely monitor the entire process of wholesale, processing, and food manufacturing. From the perspective of consumers, the utilization of blockchain can be crucial in providing reliable and authentic information regarding the production of their food. It has the potential to address various concerns related to food quality, safety, and environmental sustainability.

  1. Agriculture Insurance:
    Climate change has introduced increased uncertainty into the agricultural process, with extreme weather affecting the quality of crops and livestock. To cope with this unpredictability, farmers often rely on agricultural insurance systems. One common type is indemnity-based insurance, where payouts are determined by an expert assessment of farm damages. However, this approach suffers from limitations in damage estimation and insufficient information sharing, adversely impacting both farmers and insurance companies.

    Blockchain offers a superior alternative through index-based insurance. Utilizing quantifiable indicators rather than direct loss assessment, enhances the accuracy of the insurance process, providing a more reliable and efficient method for triggering reimbursements.

  1. Transactions of farm products:
    The utilization of blockchain technology can help speed up the acquisition and sale of agricultural products on e-commerce sites. Blockchain helps provide a secure authentication system with private key encryption, increasing the authenticity of all information acquired via planting and harvesting. Blockchain also increases overall efficiency by lowering the costs associated with signaling. Hence, contributing to safety by facilitating digital payment solutions that eliminate transaction prices.

Final Thoughts

Blockchain technology in the agriculture sector enables stakeholders and consumers to access reliable data. It helps in tracking goods and minimizing the need for a third party to monitor the network and control data. It facilitates several benefits, such as preventing product fraud, securing transactions, traceability, transparency, and easy information retrieval. It supports supply chain management and provides data transparency throughout the entire cycle. It enables multiple entities to access similar information even when they are not actively sharing tracking systems. 

However, the task involves designing a platform that precisely aligns with the unique objectives and necessities of each business. PrimaFelicitas can craft a tailored solution to fulfill all your business requirements.

Planning a new Blockchain technology Project or wish to upgrade your existing project to Blockchain? Our expert team of professionals will assist you in every step of your development journey.

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