Time to Bring a Revolution to Agriculture Through Blockchain
It's time for a revolution!
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It wasn't too long ago when agriculture started reaping the benefits of technologies from precision farming, and now, there are many technologies available to help farmers maximize their profits. Now, farmers have many technology options available to get all the information needed for every phase of farming. The world's population is constantly growing and many farmers are leaving their profession, especially in developing countries, and the burden is growing on the remaining farmers that feed the world.
With the emergence of Bitcoin, the world has seen new capabilities of technology in completing safe and secure transactions that are low cost and trustworthy. However, it is important to understand the underlying technology used for Bitcoin and how it is beneficial for the agriculture industry. Until now, everyone has seen a central governing authority where single-party governs all transactions. Blockchain technology is shifting trust on a completely new level because there is no central authority that hack-prone, expensive, and/or time-consuming. On a blockchain, all nodes connected to the blockchain have their own copy, and before making a transaction, a consensus happens between nodes to allow the transaction. Technically, this is a distributed database, and if someone wants to hack the system, then it is extremely complex or, in simpler terms, chances are slim to none.
Let’s understand how blockchain can help the agriculture industry:
Agricultural trades are now on a national and international level. There are a lot of steps involved before crops reach end customers. If we look at it on an international-level trade, then it might take many days before it reaches end customers, and there are various requirements to preserve crops. In today’s scenario, buyers have to rely on the seller and trust their word because there is no way to know how the crop was taken care of throughout the process until it had already reached them. If buyers were able to know how and when things were planted, what kind of nutrients were applied, what kind of pesticides were used, when the crop was harvested, and when and how it reached to the customer, it would provide an extremely high level of trust to buyers. In the end, buyers know exactly what they are buying. If buyers are told that a crop was grown organically, then they have to trust that it's organic because there is no way to know unless the crop was tested in a lab. But if everything is recorded on a blockchain, then buyers can purchase crops with complete trust. In fact, it will help in gaining more buyers because everything is transparent.
Almost all countries have different norms for importing agriculture products and typically limit a certain number of pesticides, and if farmers used more than the permissible limit, then that export can be declined, which is a big loss for the industry — and this process is a manual process. If each and every farming activity was recorded in the form of a blockchain block, then this process would become very easy. All involved parties will know whether or not an export will be allowed, and it reduces a lot of manual work.
Current crop insurance processes could also be further improved with the help of a smart contracts, where if a farmer has experiences losses due to unforeseen circumstances, then a smart sensor can record the data with minimal steps to register a claim and complete the entire transaction. It can save a lot of time for farmers and insurance companies because everything is recorded on a block, and there is no issue with authenticity. In fact, with every financial transaction recorded, it will provide better insight into the insurance company on overall investments that occured over a period of time.
To achieve operation efficiencies, smart contracts can be conducted with seed and chemical companies to order products when a certain situation arises and complete a payment when the product reaches the buyer. In this way, everyone is effectively connected to completeing flawless transactions.
Many governments in the world give various benefits to farmers to encourage them to farm or help them during hard times. Often, farmers are not even aware of their own benefits, and if these benefits are passed communicated via blockchain, then everything is easy to track at all level when benefits were passed and who received it. It can eliminate fraud.
In conclusion, blockchain certainly poses a solid use case for agriculture, demonstrating a strong potential to improve current farming practices. It will not only help farmers but will help all parties involved — buyers, insurance companies, etc. Due to the rising population growth, agriculture needs to step it up, and it seems like blockchain will get us there.
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