Blockchain Integration and Its Effect on Agricultural Supply Chain Management

Blockchain is an emerging innovative technology changing many industries and has immense potential to impact agricultural supply chain management systems. People have become conscious about their food choices and want to know about production certificates, chemicals and fertilisers used, production standards, and more. That is where blockchain technology is helpful in agribusiness supply chain management to improve food safety, quality, and the traceability of the farming supply chain. Blockchain technology is revolutionising agriculture by solving innumerable challenges the agriculture sector faces.

Adopting blockchain technology in supply chain management in the agricultural sector has increased transparency, efficiency, and the consumer experience. According to a market research study, the global blockchain technology in supply chain management was around USD 262.9 million in 2021, and it is estimated to increase to USD 3153.7 million by 2028 with a CAGR of 51.3%. Blockchain integration in agricultural supply chain management prevents data manipulation, increases transparency, and prevents fraud. Agri finance companies in India like NAFA (Netafim Agricultural Financing Agency) are helping farmers adopt new technologies like blockchain into their system through agricultural loans.

The human population is proliferating, leading to increasing demand for food. To overcome the challenges and satisfy the growing requirements, farmers can make the most of smart technologies like blockchain and NetBeat software that help in sustainable farming, optimise yield, save cost, and meet the rising demand for food with transparency and integrity, and efficiency. Furthermore, Agri finance companies in India, like NAFA, are helping farmers adopt these modern technologies by financing solutions to enable smart agriculture and boost automation processes. Technologies like blockchain are empowering farmers to produce high-quality food and efficient supply chain management in agriculture.

Challenges faced by agricultural supply chain management 

The supply chain ecosystem consists of many processes and requires intermediaries to carry them. Some of the problems the agricultural sector encounters in the supply chain are product traceability, transparency, food safety and quality, and supply chain inefficiency. The problem arises because the database records are maintained separately and unavailable to all the stakeholders, which, in turn, gives rise to challenges in transactions. Another significant issue is that the recorded database does not ensure that it is authentic and has not been tampered with or modified. And also, increased food demand poses a problem of fake products that threaten the various stages of the supply chain; hence it develops a lack of trust between the producers and consumers. The traditional way of managing data is risky as it leads to inaccurate data, misuse, and sometimes prone to cyber-attacks.

Blockchain technology is transforming agricultural supply chain management 

Blockchain is an incredible technology proliferating and addressing the challenges in the agricultural supply chain mentioned above. The global blockchain market size in agriculture and food supply chain was valued at USD 133 million in 2020 and is estimated to reach USD 948 million by 2025. The blockchain allows the supply chain to automate the processes of storing data in a digital format, making it tamperproof. For transactions and negotiations, it also eliminates the need for mediators and synchronises the transactions data across networks with ease of tracking transaction data of its origin. The smart contracts in blockchain help efficiently handle all the communications and dealings between the stakeholders in the supply chain.

Furthermore, blockchain and IoT-based food traceability is becoming key to smart agriculture. Food safety has become of utmost importance, and a reliable traceability system can track and monitor the lifecycle of food production from raw materials to cultivation to processing, transportation, warehousing, delivery and more. The technologies like blockchain and IoT are proving to be efficient in ensuring food safety and eliminating human intervention. Blockchain technology in the agricultural supply chain is tamperproof, reliable, encrypted, increases transaction efficiency, and helps in advanced traceability in the supply chain. Data and information are crucial in agriculture because they offer sustainable and effective farming practices.

A blockchain is a database that contains essential data and transactions related to products. The database comes in handy in optimising farming with the help of data-driven strategies. The collected database through blockchain is helpful in making informed decisions. The best solution to tackle the complex supply chain is blockchain technology. It helps build consumers’ trust by providing accurate and reliable product information. Blockchain helps address consumer concerns about food safety and quality and opt for eco-friendly methods. Hence it becomes difficult for fake and low-quality products to be in the market, forcing suppliers to improve the quality of the products.

Wrapping Up

Blockchain technology is becoming a crucial part of agricultural supply chain management. It enables food security, food safety, food integrity, support for small farmers, waste reduction, environmental awareness, and better supply chain control. Farmers can use blockchain technology to the fullest by availing of agricultural loans and upgrading their farming and supply chain practices for sustainable business.