Blockchain, the technology underpinning various cryptocurrencies in circulation today, has been explored for application in different fields. Simply put, distributed ledger technology (DLT) is a decentralised digital book for accounts and transactions recorded by all the participants.
In the agricultural sector, blockchain technology enables authenticity and accountability by recording data that is shared across multiple stakeholders. Blockchain technology can help monitor the source of food, help form a reliable food supply chain, and build confidence between the producers and consumers.
In this article, we explore the applications of distributed ledger technology in the agricultural sector.
Overview of The Agriculture Sector:
The agricultural sector is essential to the development of a nation’s economy today. Many years ago, civilization in the world only began to prosper with agriculture, and although humankind has significantly transformed, agriculture remains of paramount importance. For instance, the agriculture, food, and other corresponding sectors contributed $1.109 trillion to the United States’ GDP back in 2019.
More importantly, the agricultural sector embodies about 40 percent of the global human resources. It means that almost half of the worldwide populace is engaged in farming or related activities to sustain their bread and butter.
New technology has begun penetrating the agricultural sector to improve productivity, yield better outcomes and minimize costs. Some of the notable technologies finding their way into agriculture include big data analytics, drone applications, GIS mapping, and the internet of things (loT). Blockchain also has the potential to improve the agricultural sector remarkably. Here are some applications of DLT in the agricultural field:
Tracing and Monitoring Food Products:
DLT can trace and record food product transactions to enhance food administration, security, and quality. Today, the agriculture sector lacks clarity between food products manufactured and the food consumed. The consumer is entirely unaware of where the food products originate from, and the farmer is not well compensated for engaging in acceptable farming practices.
The use of blockchain-based applications facilitates the storage of immutable data about the suppliers on a decentralised ledger. Additionally, consumers can track the information from raw materials to finished goods. This enables engagement in fair practices by farmers and suppliers. Blockchain technology presents an innovative solution to stopping the distribution of contaminated food in the supply chain. It provides consumers with assurance and notifies producers and retailers of harmful food products.
Management of Farm Inventory:
To avoid post-harvest waste, farmers need to adopt a dynamic approach in inspecting their crop storage approach. They need to make sure carbon dioxide concentration remains under 600 parts per million to avoid mold growth and invasion. The loT-enabled sensors in the market help perceive the potential for losses significantly sooner than traditional methods of checking temperatures.
The utilization of DLT, which is open and accessible to all the stakeholders in the activity, relays all the relevant information. This includes harvesting the products, ordering new tools, and making modifications, among other things.
Upgrading farm management software (FMS):
By 2025, the worldwide farm management software (FMS) market is anticipated to grow to $4.22 billion. The need for farm products is anticipated to surge by 50 percent by 2050. With the agricultural sector facing challenges such as water shortage and stagnation, technology and innovation in farm management software are essential in increasing yields.
With farmers incorporating drone monitors, sensors, and Al, they will realise that repository data through distributed ledger technology enables them a better degree of distinction among rivals.
A community-supported agricultural business model:
Blockchain technology brings together interested parties who promise to support agricultural activities financially and, in return, receive the produce. Community- supported farmers may have a higher inclination to adopt blockchain technology if it can prove advantageous to their business.
Community-supported agricultural activities are on the rise, and blockchain technology helps bring investors to the scene. These projects can quickly raise the required capital from investors’ global pool through tokenization of farm shares on the blockchain. Besides, the distribution of rewards through tokens is far more manageable and efficient.
Even though blockchain has begun revolutionising many industries, the technology is still in its early phase of development. There is still a long way to go for it to realise its full potential. Nevertheless, it is becoming more evident that there is a window of opportunity for it in the agricultural sector. A 2020 report indicated that approximately 690 million people worldwide are hungry; agriculture-connected growth, poverty eradication, and food security are increasingly at risk. Now more than ever, there is an opportunity for innovation in the agricultural field.
Disclaimer: The content in this report is from the open source and for educational purposes only, therefore should not be considered as financial advice. We all know that the cryptocurrency market is highly volatile. Therefore, all the financial decisions should be made after doing your wide spectrum research.