How do we trust in the food materials that we consume on a daily basis? Do we really know where it came from? Its source of origin? Who made it?
Suppose we try to put in self-efforts to dig out the origin of any food material. Lets say you are a shop owner. You wish to retrace the supply chain of the vegetables you that are in your shop. It may take days or even half to one month to completely understand the producing or manufacturing environment of that particular food material.
How about the same situation pertaining Big Giant Multinational Companies who trade from various nations across the globe? Very time consuming it would be, rather most of the times, sources are failed to be re-traced.
Food remains the main source of energy for all living beings. But it should not happen that we are consuming something different to what is actually written on its cover claiming its identity.
Agriculture, being the backbone of world economies, this problem has to be completely eradicated. Blockchain technology finds success in this context improving the agricultural sector.
In December 2016, a company called Agri Digital successfully accomplished the execution of the World’s first sale of 23.46 tons of grains over a blockchain platform. This success inspired various other relevant firms to innovate and explore the powerful potentials of implementing blockchain technology.
Blockchain elevates the agro sector by showering its great features like transparency, high security, and privacy, which are based upon the underlying Open Distributed Ledger Technology (DLT).
Here are the main areas in agriculture which needs to be (or have been) looked upon by this advance flourishing technology:
Managing the Supply Chain Enabling Trust
IBM claims that it can generate the source of food materials within seconds using blockchain technology. Using this technology, the network members are updated in the real time with the latest transaction that has been recorded in the open ledger shared among them. This multiplies the trust among the network members acting as a catalyst for future contracts. This comes under the concern of food integrity in this regard.
Food companies can now easily identify and remove any fraud transaction happening in the network of the supply chain. For example, if the food is found to be contaminated or adulterated. It can be almost equal to impossible to find from where the adulteration happened in the long supply chain of the product development, processing, and transportation. Using the blockchain ledger based technology, we can analyze the multiple inputs and processing performed at various channels in the chain. Here, transparency is the key.
The supply chain is a vast domain which not only involves food related transactions but also other tradeable goods. Blockchain technology holding the same vein line provides an effective solution to those linked sectors too.
Elimination of Middlemen Saving Farmer Lives
One of the key aims for blockchain technology. Farmers all over the world being part of the agricultural sector chain holds the extreme end position. There are many parties involved in between the farmer and the seller/consumer. The farmer is hence paid less which is a relatively smaller amount hardly sufficing his basic human needs. As they are paid less, under the pressure of loan repayments, they commit suicides. Blockchain technology can save a lot of farmers lives all over the world.
By the elimination of the middlemen, the dealing can be established directly with the extreme end person of the supply chain with the farmer. This can reduce the overall costing and price for the product favoring the end consumer.
But how about the payment which is done through various payment portals like PayPal, Banks or any other financial intermediary? How will the farmers participate in the economy? These are the actual high fee-charging institutions making up the middlemen group.
These can be removed and replaced with the use of cryptocurrencies for the monetary purposes of the global system. Now the local and small scale farmers will have a larger scale of the horizon to operate and perform global trade deals.
This is the end of Part 1 of this 2-Part article. Stay tuned for the second part which consists of the best application of blockchain technology in the agricultural sector and the Top 3 Blockchain-based Agricultural Companies.
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