Agriculture, with its allied sectors, is one of the biggest industries in India, with predictions to grow much more. Currently, it contributes about 15% to the national GDP and provides incomes to nearly three-quarters of Indian households.
Urbanization has helped farmers expand their market, but it has also exposed them to some pertinent problems and issues. These problems affect consumers and businesses as well.
A closed-system agricultural supply chain forces farmers to accept low prices and engage with unethical middlemen. Nowadays, consumers also wish to trace the source of their food/crop and how it was grown.
Farmers are the most integral part of the agriculture ecosystem. But they still have the least access to the end-user customer. This makes them unaware of any feedback or even trading processes.
Moreover, government schemes and policies for farmers don’t always reach their target. This may be due to a lack of information, misinformation, or even attempts to swindle farmers. These urban problems need a modern solution.
Blockchain technology can solve some of these issues and also promote transparency and accountability. Many assume that blockchain technology is limited to cryptocurrencies, but that is not the case.
What is Blockchain Technology?
A blockchain is a chain of connected blocks that store information. It is a digital ledger with information about the sender, receiver, and payment.
Each block has a unique encrypted identifier called a 'hash' that is used to refer to a particular block. The block also contains the ‘hash’ of the previous block that connects it to the whole blockchain. Transparency of data between blocks removes the need for any authority figures.
But how does any of this help strengthen the agriculture industry in India?
Streamlining Agricultural Practices Using Blockchain Technology
Many countries have already integrated blockchain technology into their agricultural supply chain.
As we adopt blockchain technology, it will help create a decentralized electronic ledger. A peer-to-peer network gives access to this ledger to all stakeholders in the value chain.
Each block in the ledger will keep records of the transactions of all the stakeholders involved. Once all the blocks are filled with data, they get chained together in chronological order, thereby creating a chain of different blocks. Collecting this information is a costly affair, but blockchain can help change that shortly.
The transactions between stakeholders occur with immense transparency. They will not need an intermediary or middleman in the process. The lack of an authorizing figure changes how stakeholders trust the details of any given transaction. Trust will then be placed in the peer-to-peer networks and cryptography.
The transparency of transactions helps develop better data-driven crop insurance options. These options include schemes that may protect farmers from the uncertainties of agriculture.
For example, the Pradhan Mantri Fasal Bima Yojana (PMFBY) protects farmers in the event of crop failures or other disasters. The scheme gives farmers crop insurance coverage and financial support.
Blockchain technology can help farmers know the exact re-compensation of the produce lost under this scheme. It will also help other stakeholders know that their investments are protected.
A transparent system further bolsters schemes like the Gramin Bhandaran Yojna. This scheme assists farmers in creating scientific storage facilities for their produce. It also helps in maintaining a standardized grade or quality of the produce. Blockchain technology will enable tracking of the quality of the crop and its storage conditions, promoting food safety.
From a government perspective, blockchain can also help track land loans. The government will be able to track the eligibility of farmers who apply for these loans. Once approved, they can disburse payments when all the procedures have been completed.
Farmers will be able to view this disbursal and its details when they are processed. Since these payments will be carried out transparently, it will reduce the risk of fraud or misappropriation of funds.
The Spices Board India, along with the UN Development Programme, has created a blockchain-powered trading system for Indian spices. It is facilitated through an online portal called eSpiceBazaar that promises traceability and quality assurance.
This initiative will help spice farmers enhance their income by selling in international markets. It will also help rebuild pandemic-affected supply chains by providing trading partners and consumers with trusted and accurate data on goods and transactions.
Benefits of Blockchain Technology: Revolutionizing the Indian Agricultural Landscape
A digitalized inventory of the agriculture value chain will help make all transaction and data-related processes efficient, transparent, equitable, and beneficial to all the stakeholders of the agriculture ecosystem.
Based on the examples and applications mentioned above, it is evident that blockchain can provide heaps of benefits to the agricultural landscape. Some of the salient benefits are discussed below:
Farmers will be able to store and manage data on their produce throughout the crop lifecycle. It also gives farmers a seat at the table, encouraging them to know more about the value chain that they initiate.
Blockchain's transparency helps improve the trust between all stakeholders (consumers, farmers, traders, etc.)
Tracking produce and crop payments in an extensive supply chain are a lot easier with blockchain technology. This helps reassure the customers concerning the safety and quality of the foods they consume.
The use of smart contracts makes it easier to detect and report any instances of malfunctions or fraud in the blockchain in real-time.
There is greater trustworthiness regarding all transactions within a blockchain ecosystem. All the data collected under this method is highly reliable and traceable. This helps the government ensure that the allotted land use is ethical and environmentally friendly.
Conclusion: Developing Blockchain Technology for a Better Future
Although blockchain technology is not yet perfect, the advantages it provides are commendable. The reliability and efficiency of blockchain are bound to improve with acceptance. When implemented well, blockchain can potentially change the face of the agricultural sector in India.
Get started with Spydra
Spydra is a next-generation API driven Decentralization-as-a-Service platform to enable business and developers to leverage the full potential of Blockchain and the Decentralized Web Infrastructure.