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Implication of Blockchain in Agriculture

By Bitsbeat


Blockchain is one of the most recent advancements in the field of information and communications technology, and it has already begun to transform our world. Blockchain's uses are only just beginning to be fully explored, and its potential is enormous.According to a recent report by Grand View Research IncThe worldwide blockchain business would be valued at USD 394.60 billion by 2028. This says a lot about the industry's future possibilities.During the COVID-19 pandemic, global food supply chains proved brittle, prompting recommendations to strengthen the resilience of global food supply chains through increased efficiency in the production, distribution, and consumption of nutritious food. How might blockchain, which provides data to producers, distributors, and consumers, contribute to the solution?Big data technologies may present chances to improve global food security by addressing inefficiencies from farm to table.Blockchain, a connected decentralised database that maintains auditable data across entire supply chains, has the potential to change the game for food producers all over the world.

Blockchain in Agriculture

The agricultural industry's dynamics have recently been influenced by blockchain. Blockchain is a distributed ledger of transactions and accounts that is recorded and preserved by all parties involved. The goal of blockchain is to promote openness and accountability, which is why it's becoming a popular tool in modern agriculture.In farming or agriculture, blockchain is used as a technology to assist enhance the number of trustworthy information available about inventory, agricultural contracts, and the general state of the farms. In the past, gathering this type of data was a costly endeavor, but blockchain has the potential to change that in the near future.

Application of a blockchain in Agriculture

There are various blockchain uses in the agricultural sector right now, and more are being developed based on recent technological advancements. It is possible to break down the key applications of blockchain into four broad divisions in order to discuss them:

  • Smart Farming
  • Supply network for food
  • Agribusiness insurance
  • Agricultural product transactions

Smart Farming

Smart farming, also known as smart agriculture, is the process of incorporating numerous current technological advancements into the farming process to increase its efficiency and reliability. It incorporates aspects such as information and communication technology (ICT), the internet of things (IoT), various sensors, machine learning technologies, and a variety of data gathering and analytical tools, such as unmanned aerial vehicles.Although smart technology has been available to farming for some time, developing a solid and comprehensive security system in order to effectively handle and exploit the data being collected is a big difficulty in its application.

Model of Smart Farming

Numerous smart farming models have been established to date based on the value and promise of blockchain technology in agriculture. These models help to bring the features of blockchain technology and IoT together.One such solution was created expressly for greenhouses, which require the usage of IoT sensors to operate as a private local blockchain that can be easily maintained by the farmer.Another approach has been developed for broad usage, which incorporates IoT and blockchain technology. The basic premise of this framework is to aid in the development of trust among the many blockchain players.

Agribusiness insurance

Climate change has rendered the entire agricultural process increasingly uncertain in recent decades. Weather extremes have an impact on the quality of both crops and cattle. Agricultural insurance programmes are considered a go-to choice for most farmers in order to combat the volatility of farming.Farmers pay a modest insurance charge at the start of each cropping cycle and are eligible for a payout if their farms suffer losses due to weather irregularities. This provides farmers with some breathing room while they deal with the uncertainty brought on by weather variations.

Agricultural product transactions

With the use of blockchain technology, the acquisition and sale of agricultural products on ecommerce sites can be substantially accelerated. It is beneficial to this segment in two ways:

  • Information protection
  • Management of the supply chain

In terms of data security, blockchain provides the critical characteristic of private key encryption, which improves the authentication process' validity. This can aid in the safe and secure application of all data collected during the planting and harvesting phases.In terms of supply chain management, blockchain helps to increase overall efficiency by lowering the cost of signalling for all parties involved.Furthermore, blockchain contributes to the security of the payment process by providing digital payment solutions with no transaction fees. The adoption of cryptocurrencies in this technique will assist to reduce transaction costs even more.All of this contributes to increased consumer trust in the ecommerce process of purchasing agricultural products. This has a number of advantages for farmers, who stand to make a lot more money and obtain a larger internet audience for their products.

Limitations of blockchain in agriculture

Blockchain technology allows for information traceability in the food supply chain, which helps to improve food safety. It promotes the creation and deployment of data-driven technologies for smart farming and smart index-based agriculture insurance by providing a secure manner of storing and managing data. Furthermore, it has the potential to lower transaction costs, improve farmers' access to markets and provide new revenue sources. Despite its immense potential benefits, blockchain technology in agriculture and food still has significant limits. Second, collecting the data that is posted to a blockchain can be highly expensive, which will be a barrier to blockchain adoption in the industry. The setup of a distributed ledger may be inexpensive, but gathering data required to make the ledger usable, such as DNA from livestock animals, may be costly. Sampling can save money, but it requires a large population of products to collect data on. This suggests that the average cost of data gathering is cheaper for larger farms than for smaller farms, thus widening the income gap.Third, blockchain does not interface with traditional systems in a seamless manner. The technology must be integrated with an existing database and legacy systems such as enterprise resource planning, warehousing management, and manufacturing execution systems in order to be successful. It can take a long time to set up an infrastructure to employ blockchain technology. Middleware and communication protocols that can bring disparate systems together will be crucial.


Blockchain in agriculture enables the facilitation of numerous data-driven technologies in order to usher in the era of smart farming because it is a reliable and trusted method of storing data. When used in conjunction with the concept of smart contracts, it helps to smooth out the nature of transactions between multiple parties by speeding up the process. When it comes to blockchain in farming or agriculture, this is just the tip of the iceberg. In the section below, we look at numerous blockchain examples and uses in the agricultural landscape. While blockchain technology is far from flawless, the sheer number of benefits that have already been gained from it in such a short period of time is amazing. Blockchain has the ability to completely transform the agricultural sector if properly deployed. The dependability and efficiency of this system will undoubtedly improve as technology improvements continue.