Blockchain for Agriculture: Redefining the Supply Chain

Top Five Uses of Blockchain in Agriculture

1. Reducing food waste

Problem: It’s estimated that a third of all food produced globally is wasted. Up to 52% of fresh fruits and vegetables are thrown away in the USA each year and much of this is happening in the field—long before it ever reaches the consumer. Crops are literally being left to rot where they stand because crop management practices are inefficient for today’s super-yield demand.

In one 2019 article, Forbes cites that “95% of agricultural research over the past 30 years has been focused on raising productivity, and only 5% has been dedicated to reducing losses”.

Solution: Implementing blockchain allows users across the farming operation to access a decentralised ledger which offers a streamlined view of all tasks in the pipeline; be it harvesting crops at just the right time, ordering supplies, tweaking storage and so on. When combined with sustainability consulting, blockchain can become a crucial management tool for storage and post-harvest processes, significantly increasing operational efficiency and reducing food wastage by up to 34% on the farm.

With blockchain, farmers can also make use of accurate supply-demand algorithms which marry consumer behaviour with agricultural data to match supply and demand—thus avoiding the problem of overproduction

2. Promoting traceability and sustainability

Problem: The Community Environmental Legal Defense Fund (CELDF) estimates losses of around $27 billion each year, caused by soil destruction from chemical pesticide use. But that’s not all. The pesticide problem is so bad that, in the UK alone, up to 85% of all waters; rivers, lakes, coastal bodies etc, are contaminated with pollutants from farm runoff. Yet the chemical industry is supported because it brings in around $35 billion annually.

To add to the pressure on growers and livestock breeders, consumers are now demanding farm-to-fork visibility of where their food comes from and how it was grown or raised. This puts greater onus on producers to provide provenance of their methods, suppliers and supply chain.

Solution: There’s a new wave of blockchain-enabled agricultural platforms and innovative, socially-minded startups which provide financial incentives to farmers who follow sustainable practices, rather than simply rewarding yield as the current system does. What’s more, experimental data shows that blockchain-enabled sustainable e-agriculture can increase farmers’ sales by 25%, compared with non-blockchain electronic agriculture.

Where traceability is concerned, using a blockchain-enabled secure ledger to record the status of crops—from seed to shelf—gives even complex and large-scale operations full and real-time visibility of every load via a secure, unalterable database.

3. Improving supply chain management

Problem: Today’s supply chain is a global and complicated one, with many moving parts. There are literally millions of separate entities involved in getting our food from the farm to our plate, each serving its own interests, and this network is fraught with communication roadblocks. Every snag along the way adds travel time which, in turn, can lead to spoilage, stock losses and profit decline. Or worse; food insecurity.

Another issue with the modern supply chain is that a lot of the data it produces is handled by a third party, then stored either as a paper document or in a centralised database. This is fertile ground for food fraud—a problem estimated to cost the global agriculture industry around $10bn - $15bn a year.

Solution: With blockchain, each link within a supply chain can input and access key information on things like prices, dates, location, QC and certificates, plus any other data that might have been logged against an asset. Deloitte describes how this benefits organisations through “traceability of material supply chain, lower losses from counterfeit and gray market, improving visibility and compliance over outsourced contract manufacturing, and potentially enhancing an organisation's position as a leader in responsible manufacturing”.