Category Archives: Agriculture

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Should Governments Back DLT Agricultural Initiatives?

Blockchain tech could be the way forward for agricultural revolution.

Blockchain technology has gone far beyond its application in the financial sector. The disruptive technology, of late, has been flooding the newspapers and mainstream media for all the right reasons.

We have already seen its substantial impact in food traceability and supply chain management. Currently, as many industries are experimenting the vast inherent capabilities of the technology, the agricultural domain is also eyeing the integration of innovative technologies in its intricate supply chain. The premise on which blockchain technology is based, that is, recording of transactions in a decentralized log which is transparent and accessible to the involved parties can prove to provide essential advantages in the agricultural sector.

Ensuring food safety

Food adulteration and quality manipulation have been a constant occurrence in the agricultural sector. This increases consumer demand to know the source of the foods they buy and blockchain technology can be used to align with these demands. Consumers can, with ease in accessibility, obtain information regarding the origin of their food. Food traceability, and establishing accountability becomes easier, and this simultaneously decreases occurrences of fraudulence.

There has been significant progress in this aspect, since it is in both farmer and producer interests. This is because of the instances along the way for farmers to get their profits eaten up by those higher up the supply chain or the retailer’s brand image being tarnished by counterfeits or duplicates. Hence, blockchain technology could be a win-win situation. In fact, the fast-moving consumer goods sector (FMCG) is already seeing many companies trying to get an edge over their peers.

Establishing source and transparency

Perhaps the most prominent use of blockchain technology in the agricultural sector lies in the fact that it could provide transparency in the supply chain. There exists a highly intricate flow of resources in the agricultural sector. With this, it becomes increasingly difficult to verify the accuracy and attest to the transfer of commodities or money from the farms to the fork.

What this essentially means is that the provision of information to the involved parties in the supply chain can be manipulated to align it with the interests of certain people. Farmers do not get access to basic information of things such as the volume of their products being sold and the amount they are sold at. This ambiguity could create a sense of vulnerability among them leaving them at the hands of parties involved higher in the supply chain.

Blockchain provides a solution to this problem. It can track the information relating to the supply chain with great accuracy, without it being prone to manipulation. This means that farmers and retailers will have access to data in relation to the products and can justify any excess charge levied on them. This ultimately leads to customer satisfaction as they gain information about the foods that they consume. In addition, this transparency facilitates the smooth conduction of transactions among farmer and buyers as it increases mutual confidence. All of this significantly removes the existence of unnecessary middlemen, food adulteration and manipulation.

Optimizing payment options

It is not an unknown fact that one of the major concerns pertaining to the agricultural sector is the authenticity of the financial transactions. Farmers have to wait for long periods of time to receive money from buyers. In addition, farmers have to previously know their buyers to have the element of trust between them — a pre-requisite for them to enter into business. The transaction cost is also significantly high and can sometimes prove to be a hindrance due to their risky nature.

The adoption of blockchain technology can address the aforementioned problems. Firstly, it would facilitate faster movement of funds while being transparent. This means that the farmers would not be left wondering about due payments. In fact, Ethereum-based smart contracts could be used to immediately conduct the transaction as soon as the action is complete. This reduces the need to individually analyze and assess the trustworthiness of their buyers, which previously served as a hindrance. As a result, time and money of the farmers is protected and the chances of fraud decrease.

In addition, governmental subsidies, although meant for the benefit of the farmer, do not necessarily reach them. The transparent nature of blockchain can help in making sure that the correct allocated amount reaches the right hands at the right time.

An agricultural revolution?

The inclusion of blockchain technology in the agricultural sector gives rise to a new scenario. Previously, those who could not conduct business due to trust or accountability issues, can now do so without any concerns. This will lead to the formation of many more chains of business between the farmer and their buyers. The expansion and scope of this market is unprecedented, and could possibly revolutionize the agricultural sector.

There are many startups that have worked towards integrating blockchain technology in the agricultural sector. Agri-ledger, stores transaction data and helps in tracing back to the origin. Agri-chain helps in conducting peer to peer transactions. California-based Ripe helps in assessing quality of food which creates transparency right along the supply chain. Crop insurance is also facilitated by blockchain technology with Worldcover using satellites to constantly monitor factors such as rainfall which affect the growth of crops, and triggers instantaneous payment. Provenance has vested its funds into food safety by giving consumers access to product origin and history. In July, Aon plc unveiled a blockchain-based platform for the provision of agricultural insurance policies for smallholder paddy field farmers in Sri Lanka.

This clearly establishes the fact that blockchain technology has already started to find its way in the agricultural and food sector. In May 2019, research by Gartner, Inc indicated the major shift of global grocers towards blockchain. The research claimed that 10% of the top global food conglomerates would adopt blockchain for food traceability by 2025. As reported in March 2019, French president Emmanuel Macron urged the EU to embrace the use of blockchain technology to exploit its benefits and enhance the agricultural industry.

Agriculture, coupled with blockchain technology, has a lot of scope for expansion and adoption thanks to the plethora of functions it brings along.

 

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Blockchain To Bring Transparency and Wealth to Coffee Farmers in Ethiopia

Blockchain To Bring Transparency and Wealth to Coffee Farmers in Ethiopia (1)

Reuters reported earlier today on the initiative of a roastery in Ethiopia under the brand Moyee to use blockchain in supply chain management and improve coffee farmers’ incentive.

Most coffee exporters process the beans elsewhere and among other things, price fluctuations make the business an uphill battle for farmers. Despite the business being a very lucrative one, most farmers in the area are left at the bottom of the earning chain.

More so, “One reason why buyers from faraway places or different countries go through middlemen is because they rely on them to make sure farmers are following these good practices,” says Vijay Kandy whose company will build the blockchain platform.

Co-founder of Moyee Coffee Killian Stokes said “It’s the world’s favorite drink. We drink over 2 billion cups a day,” and being a huge industry, it’s rather bizarre that farmers are treated the worst. “The industry’s worth USD 100 billion and yet 90 percent of coffee farmers in Ethiopia live on less than USD 2 a day,” Stokes added.

In an attempt to bring economic relief to farmers, Moyee created unique digital identities for 350 farmers working with the company. The aim was to create transparency and allow buyers access to how much each farmer was being paid. Despite the prices being 20% higher than market prices, still farmers’ livelihood could still be improved, at least that’s what Moyee thinks since it wants to introduce blockchain to its business.

According to the company’s blog, it had been working on a prototype with bext360 and the FairChain Foundation since November 2017, and said that blockchain will “bring about a revolution in transparency that certification programs cannot currently offer.”

Blockchain continues to offer traceability, transparency, and trust which break barriers in economic distribution, and also promises to be the future technology of supply chain. Further, its underlying asset class – cryptocurrency – creates value as an incentive instrument for most business environments, and now, Moyee intends to apply that logic to the Coffee supply chain.

Blockchain will open up a new economic model for the farmers, allowing buyers to tip farmers, fund projects using a mobile app. Also, every transaction across the supply chain will be logged to the blockchain, ensuring transparency.

In a report by the United Nations’ Food and Agricultural Organization, it concluded that emerging technologies like the blockchain in the agricultural sector shows promise of inclusive market participation for smallholders and Micro, Small and Medium Scale Enterprises (MSMEs).

Blockchain innovations in the agricultural sector transcend technological benefits in managing supply chains alone, however, it has an overwhelming socio-economic impact. “It’s an innovation that is poised to empower local farmers in the Caribbean region,” said Pamela Thomas, executive director of the Agriculture Alliance of the Caribbean (AACARI) referring to the blockchain initiative to be adopted by fruit farmers in the Caribbean.

Apart from economic empowerment, blockchain has phased its way into improving food safety, export security and animal welfare as to be demonstrated by BeefLedger in its partnership with Australia’s National Transport Insurance (NTI) to trial blockchain monitoring of beef handling from Australia to Shanghai.

 

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South Korea Adopts Blockchain for Beef Supply Chain

South Korea has further expanded blockchain infrastructure and will now be utilizing the technology in a beef supply chain pilot in order to create transparency for consumers.

Beefchain

First reported by local media outlet Yonhap News, the project will be conducted by the Ministry of Agriculture, Food and Rural Affairs (MAFRA), as well as the Ministry of Science and ICT. It will be piloted in North Jeolla Province by December and after a trial period, it will be officially launched in January 2019 in cattle farms and slaughterhouses.

Like many supply chain systems that are blockchain-based, accountability, transparency, and immutability are core characteristics from which industries such as agriculture will benefit from. Additionally, the upgraded system is anticipated to the reduce costs, time-consumption, and risk of fraud that presently looms over the paper-based reporting system that tracks cattle from birth, slaughter, packaging and distribution.

According to the joint press release from MAFRA and the Ministry of Science and ICT the blockchain platform, all related information and certificates will be stored, enhancing efficiency and credibility.

Blockchain adoption

South Korea is bustling with blockchain projects that are being introduced into many sectors; most recently, the nation’s largest power provider KEPCO unveiled plans to transform energy infrastructure using by blockchain and other technologies to develop microgrids. In doing so, they would allow for electricity to trade across microgrids which is seen as a solution to energy supply issues and to “promote eco-friendly energy practices”.

Furthermore, plans to upgrade e-government services and utilize blockchain for hospital patient records are underway. These are just the tip of the iceberg for a nation that continuously announces budget increases for blockchain and places blockchain within extremely well-funded innovation plans.

Agriculture

For farming, blockchain technologies have found themselves as favorable entries into the sector and have also come in numerous nuanced forms with the typical benefits still intact.

One pilot project which was recently announced in the United States is a supply chain solution that utilizes both blockchain technology and the Internet of Things (IoT) to trace and track dairy products, improving connections between farmers and end customers and increasing transparency and product freshness, an overall upgrade to the system.

Oxfam International is also on board with blockchain for rice farmers in Cambodia; the project being trialed is designed to create a fair pricing ecosystem among rice farmers. It sets in place digitized contracts that carry numerous essential data inputs as well as establishing appropriate contracts with clients, reducing the risk of exploitation and lowering financial pressures for farmers.

 

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