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Blockchain technology (BCT), which has been hailed as disruptive since its inception, is
gaining traction, particularly in the agri-food industry, due to its numerous advantages. We
sought to undertake a comprehensive bibliometric analysis of the BCT in the agri-food
system in this research. The investigation looked into the list of nations and institutions that
performed BCT research in agriculture, growth trend analysis in research publications,
bibliographic coupling of journals, and then the countries and institutions researching on
BCT. We observed that many researchers have begun to investigate the deployment of BCT
in agriculture and its application to diverse difficulties in the internet of things (IoT).
China, the United States, and India were the most active nations in BCT research and
publishing; however, India has little research collaboration with other countries in
comparison to China and the United States. The keyword analysis demonstrates the
importance of BCT in maintaining supply chain transparency by ensuring the privacy of
stakeholders' personal data. According to the research, BCT provides several benefits and
scope in the agri-food system, including allowing food safety and traceability, a fast and
transparent payment method, record keeping, effective supply chain management, and
warranting credit and insurance in the agri-food system.
The study also analyses the possibilities and problems that are at the forefront, as well as
policy implications for various stakeholders. Future study should strive to establish
legislation to support the use of BCT in agricultural supply chains, as well as to incorporate
blockchain as a vulnerable sector in agriculture to ensure undistorted competition among
stakeholders.
Blockchain applications in agriculture domain
• The current blockchain technology in the food supply chain is still in its infancy. At
the same time, there are numerous immature and defective spots in the blockchain
technology deployment process. Furthermore, the deployment of blockchain
technology necessitates broad participation and collaboration of all stakeholders
involved in the food supply chain, which is critical for it to play its full function.
Blockchain technology, with its qualities of transparency, security, and
decentralisation, enables the tracking of food quality information across the supply
chain. This helps to avoid food transaction fraud and lowers the expenses of food
supply chain management. As a result, all stakeholders, including manufacturers,
consumers, and government regulatory authorities, stand to profit.
Problem Area:
Food supply chains have gotten longer and more complicated than ever before as a result of
rising globalisation and market competitiveness.
Food traceability, food safety and quality, food trust, and supply chain inefficiencies are all
prevalent issues in food supply chains that pose significant dangers to society, the economy,
and human health.
Here are the problems that exist in the traditional supply chain process
• Food Fraud
Tampering, misrepresentation, and purposeful substitution have increased
dramatically as a result of the complex global food supply chain system.
• Foodborne Illness
One in every ten persons in a population of 600 million becomes ill as a result of
ingesting tainted or adulterated food. Foodborne infections impede socioeconomic
growth by taxing the healthcare system, disrupting trade and tourism, and wreaking
havoc on national economies.
• Illegal Production
Seafood is a major category, with clear instances of illegal production entering the
supply chain. The worldwide fishing sector faces issues as a result of unreported,
unregulated, and illegal fishing.
• Food recalls
In certain circumstances, government authorities such as the FDA or the USDA seek
food recalls to determine the existence of any possible allergens in the product.
Frequent food recalls can be costly to the food sector.
Current Solutions:
From the standpoint of the producers, the use of blockchain technology supports in the
building of trust connections with consumers as well as the reputation of their products by
transparently providing individual product information in the blockchain. Businesses may
improve their competitiveness by increasing the value of their commodities. This would
make it difficult for providers of fraudulent and low-quality commodities to continue in
markets, and would encourage all suppliers in the agriculture and food industries to
improve product quality.
Consumers benefit from the blockchain because it gives precise and trustworthy
information on how food is produced and exchanged. It helps businesses answer customers'
concerns about food safety, quality, and environmental sensitivity.
Customers may connect with producers using blockchain since it helps them to understand
the food production process more easily and thoroughly. It helps consumers by eliminating
obstacles to commodity exchange in order to strengthen their relationship and, as a
consequence, consumer trust and confidence in food safety.
Technology used –
Using the mobile app or central location on the blockchain, a farmer might store details
about grown-up crops such as origination, type of crop, sowing technique, storage
information, and so on Farmers' information might be made available to all system
stakeholders.
Farmers may also upload crop images that are analysed using Machine Learning and
Artificial Intelligence to assist refineries or factories in making educated judgments
regarding crop quality.
The smart contracts' built-in restrictions ensure that compliance is met while providing data
to the blockchain.Farmers transfer the crops to food processing firms or refineries for
additional processing after they have matured.
After obtaining food from farmers, refineries or food processing firms might bid on the
crops using a smart contract.
Once the offer is approved, they may begin processing and storing crop refining information
on the public blockchain.
Information kept on the blockchain might assist merchants or customers in determining
whether or not food has been properly prepared.
Because the regulations are included in the smart contracts, food safety is ensured at every
stage of production.
3. Wholesalers would bid for the processed products through smart contracts
Following the processing of the food products, refining businesses might put the processed
commodities up for bid.
The smart contract might allow wholesalers to begin bidding.
Once the food processing firms have accepted the offer, they will convey the processed
food to the wholesalers and update transportation records on the blockchain.
The wholesaler might then contract with logistics companies to distribute the commodities
to various stores.
Transporting processed food in IoT-enabled cars or trucks may aid in keeping the food
products safe at a regulated temperature.
The sensors embedded into IoT trucks might provide information to the blockchain about
the temperature of food goods as well as their real-time location.
It may aid businesses in keeping track of the food goods they will get.
4. End consumers could ensure if the food they are having is safe to eat or not
Farm origination facts, batch numbers, transportation details, manufacturing and processing
data, storage temperature, expiration details, and other details may be digitally linked to
food items inside the supply chain blockchain from source to destination.
To establish an agreement, all network parties validate every piece of information acquired
during each transaction.
Following the validation of each block, it is added to the whole chain of transactions,
resulting in an immutable and permanent record.
After tracking the food items back via the supply chain blockchain, an end-user may assess if
the food is safe or not.
With the use of blockchain, a consumer might quickly assess whether or not to purchase a
certain food item.
By utilising DLTs to connect manufacturers directly to customers via data integration.
Globally, the top five retailers control over 60% of the food business, which can result in
unfair trade practises for farmers and manufacturers and excessive pricing for consumers
(Michail, 2017). By avoiding food shops, manufacturers might save money on business-to-
business (B2B) marketing aimed at retailers, saving consumers 20–30% on items purchased
through the INS platform (Michail, 2017). INS is intended to expand market potential for
small food firms. Ambrosus is a Swiss technology company that intends to trace food and
pharmaceutical supply chains using a DLT, smart contracts, and high-tech sensors. Ripe is
another business that uses DLTs, scanners, and specialised sensors to offer agricultural
supply chain operators with improved crop production data in order to generate higher-
quality products (Massa, 2017). A UK start-up, Provenance, has successfully developed a
test programme to track tuna fishing on DLTs. By registering each capture on the blockchain
and selling the fish with a blockchain ID to assure traceability, the firm hopes to reduce
illegal fishing and false certificates.
Food companies can utilize the blockchain to inculcate transparency in their supply chain
process. Blockchain has the potential to add an extra layer of security to the food industry.
• Transparency
• Efficiency
• Food Safety
2. E-commerce of Agricultural products
Problem Area
Some of the challenges faced in e-commerce trade of agriculture products are-
• Cash on delivery and logistics services especially in developing countries.
• Basic information of agriculture products is not easily confirmed and trusted by
customers.
• High operating costs because e-commerce retailers find it difficult to manage time and
demand of small orders with diverse items.
Solution and technology used
Through implementing block chain technology, it can provide solutions to many of these
challenges in agricultural sectors-
• Information security- A powerful tool of block chain technology that can be
implemented in agriculture sector is the private key encryption. It provides
authentication requirements which can link the data of all aspects of planting and
harvesting of agricultural products thus ensuring its safety.
• Supply chain management- Each and every component in the supply chain is
represented by a block of information which provides the benefit of visibility,
aggregation, validation, automation and resiliency. This will reduce signaling costs
thus making sure that the supply chain management is more efficient than traditional
monitoring mechanisms.
• Payment methods- Digital payments with zero rates are made possible through block
chain technology. Implementation of crypto currency in e-commerce transactions of
agricultural products will decrease transaction cost.
• Confidence of consumers- The block chain technology is a decentralized mechanism
through which the distributed accounting system of block chain is time stamped. This
feature of block chain ensures that all information stored on the chain is transparent
and cannot be modified which increase consumer confidence in e-commerce trade.
• Reduce cost of farmers- Producers of agricultural products are excluded from markets
as traditional e-commerce is not willing to provide services to them. This is because of
low transaction volume and small scale. Block chain technology has the potential to
drastically lower transaction costs and reintegrate them into the market.
3. Agricultural Insurance
Weather extremes pose a hazard to agricultural production, jeopardizing food security. Crop
and livestock output are both impacted and future weather extremes are predicted to be
exacerbated by climate change. Agricultural insurance plans have long been used to handle
weather-related risks. Farmers pay an insurance payment before the cropping cycle begins,
and they receive a payout if their farm suffers a loss.
Problem Areas
In terms of how losses are assessed and, as a result, how payouts are triggered, agricultural
insurances differ. Insurances that indemnify farmers based on a damage assessment made by
a farm expert are known as indemnity-based insurances. While indemnity-based insurances
can accurately pay losses, they are vulnerable to difficulties stemming from asymmetric
knowledge. More precisely, information about the riskiness of agricultural output and
practices is transferred asymmetrically between farmers and insurers.
Current solutions
Because of the drawbacks of indemnity-based insurances, the concept of index-based
insurances arose as an alternative or complement to indemnity-based insurances. Rather
than the loss itself, the compensation is triggered by a quantifiable measure, such as rainfall
at a local weather station. If this weather station has a long enough history of weather
records, the farmer and the insurer will have the same knowledge about the insured value,
and agricultural operations will have no influence on the insurance payout. As a result, neither
adverse selection or moral hazard exists, and the technical approach for triggering a payout
has been substantially simplified.
Technology used
Farmers are increasingly using index insurances as a risk management tool, with the goal of
reducing basis risk at the forefront. In two ways, blockchain technology can help to improve
index insurance. First, payments can be made on a timely and automated basis depending on
meteorological data that triggers a smart contract payout. Second, using a smart oracle,
weather data and other data sources, such as plant growth data or data collected by farm
machinery, may be automatically merged, reducing basis risk and speeding up the index
determination and payout process. Smart contracts that use smart oracles to integrate
external data have already proven helpful in various crypto-economic applications.
Block chain Advantages and Limitations
Advantages-Full insurance coverage with no deductibles is feasible, and payments can be
made quickly and automatically shortly after a severe weather event has been detected.
However, some discrepancies can occur which is denoted as basis risk. They are,
• Any variations between observed and on-farm weather are labelled as spatial basis
risk.
• Temporal basis risk implies that an arbitrary time window was used to calculate the
index.
• All remaining sources are summed up in the design foundation risk.
4. Agriculture Finance
Farmers are frequently compensated for their commodities for weeks under the present
system, and traditional payment methods such as wire transfers may be rather pricey. Some
of these inefficiencies can be addressed using blockchain technology. Many developers have
already created blockchain-based apps that enable peer-to-peer financial transactions that
are inexpensive, safe, and near-instantaneous. Some are even using "smart contracts," which
automatically trigger payments if a given condition (such as delivery of goods) is validated by
the buyer. Recently, an Australian farmer became the first to use this technology to settle an
agricultural transaction, and many will undoubtedly follow in his footsteps.
Problem Areas
Lack of transparency, credit histories, and contract enforcement issues are just a few of the
issues that smallholders and formal financial inclusion face.
• Inability to get financial services can have a negative influence on the performance of
agricultural value chains, resulting in: i. farmers not optimising their yields.
ii. purchasers who are having difficulty ensuring a reliable supply of commodities.
It makes it impossible for purchasers to pay farmers on delivery, causing poor smallholders
to sell their commodities at reduced prices.
Through transparency and shared control accessibility, blockchain promotes justice to the
agricultural funding process.
With two easy steps, blockchain can assist in the management of agricultural finance:
Technology used
An integrated payment system based on distributed ledger technology (DLT) and smart
contracts has been introduced to boost liquidity in private bonds and worldwide payments.
The systems for capturing, storing, verifying, and safeguarding data are intended to solve
finance issues among all parties in agricultural supply chains. Farmers, development
agencies, banks, insurance firms, and other financial entities are all included.
created a credit evaluation system using blockchain to increase the supervision and
administration of merchants in the food supply chain, where smart contracts offer the
whole processing flow and logistics Smart contracts are programmes that integrate
computer protocols from the user interface to carry out contract conditions. Because
blockchain simplifies the whole process by eliminating the need for middlemen in asset
contracts, it regulates the damage to properties, tangible or immaterial, by sharing access
data.
• Financial services not only enable smallholders to invest in their farms, but they may also
assist to alleviate liquidity restrictions that make it difficult for purchasers to pay farmers on
delivery, forcing cash-strapped smallholders to sell their products at lower prices in return
for speedier payment.
• Blockchain technology can give agri-commerce players with lower-cost and quicker
payment solutions.
• The benefits go beyond simply boosting openness and ease of use; farmers will be able to
access financing significantly more readily than they can now with present supply chain
systems.
Limitations
e) Maturity – Blockchain technology has only been around for a decade. This
suggests it is a novel technology that will take time to mature.
Current State- Currently blockchain is not being used in agricultural sector for controlling
weather crisis, but there are ways as to how it can be implemented. A lot of technical
equipment’s are necessary for its implementation and managing issues related to weather is
quite specific and at the same moment quite important.
Problem Areas:
The common challenges farmers face due to the unpredictable weather are –
• Quite often due to horrible weather conditions the prices surge, and consumers are
unaware as to what led to the increased costs.
• Farmers also face huge losses due to the weather as different crops require different
ways of harvesting.
Solutions and Technology used:
Blockchain can provide solutions to this weather crisis faced by farmers.
A step by step process can be implemented-
Step 1- Setting up Agricultural Weather Stations for sending information to the blockchain.
Step 2- Farmers taking preventive actions.
Step 3- Quick application for crop insurance.
Because of the blockchain's transparent and irreversible nature, insurance companies and
other authorized parties will have easy access to the data collected by the smart weather
station.
They can use smart contracts to directly query the blockchain for the information they need.
Farmers will automatically get the desired money in their individual wallets if the insurance
claim request is authorized. As a result, a blockchain-based system can assist farmers in
receiving payments in a smooth and timely manner.
Farmers must be able to properly manage their money in order to get the full benefits from
blockchain technologies. Unfortunately, it's probably one of the areas where they have the
greatest difficulty.
Advantages and disadvantages:
Advantages- The implementation of blockchain will help farmers to be aware in advance
with the help of the step-by-step implementation process explained above. Farmers and
other stakeholders will be able to grasp the pricing discrepancies in the food distribution
sector thanks to blockchain's capacity to provide traceability and transparency.
Disadvantages- Because small farms lack the infrastructure to enable such a process, they
may have difficulty collecting and integrating agricultural data. As a result, future efforts
should focus on making blockchain technology accessible to both small and large farms.
References –
https://www.leewayhertz.com/supply-chain-blockchain-reinventing-food-supply/
https://www.grainmart.in/news/blockchain-the-future-for-agricultural-sector-in-india/
https://www.fao.org/3/ca9934en/CA9934EN.pdf
https://www.researchgate.net/publication/350898794_Application_of_Blockchain_Technolo
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Food_System_A_Systematic_Bibliometric_Analysis_and_Policy_Imperatives?enrichId=rgre
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https://www2.deloitte.com/au/en/pages/consumer-business/articles/blockchain-
revolutionising-agriculture-industry.html