How Farmers and Food Producers Can Benefit From Blockchain Systems Integration

How Farmers and Food Producers Can Benefit From Blockchain Systems Integration

One of the most promising industries that blockchain could potentially transform is agriculture.  Blockchain technology can help growers get the most out of their farms with the right applications. For instance, it can be a single, verifiable source of truth regarding their inventory, contracts, and farm conditions. That eliminates the need to manually enter data, which translates to technology working for the man.

How Blockchain Technology Can Benefit Farmers and Food Producers

In addition to reducing the time and energy spent in the agriculture value chain, blockchain technology can also help improve the efficiency of the whole process. With its ability to automate and digitize the food supply chain, there’s no doubt that it’s a necessity for modern agriculture. 

Farmers and food producers need to understand that there are various opportunities available to them with blockchain technology. Here is how it can work for them:

Improved Quality Control and Food Safety

Blockchain technology can help to increase transparency in the agriculture supply chain. It can analyze, note, and remove ineffective processes to ensure maximum quality control conditions. In addition, crop failure is a common issue that farmers face globally due to unfavorable weather conditions. It can be caused by factors such as poor rainfall and erratic weather.

To address this issue, companies like IBM have partnered with several companies to develop IoT devices that can monitor the various factors that affect a farmer’s crop. Farmers can then use these devices to improve the quality of their crops. These devices can be connected to a network and continuously updated. Farmers can then be notified whenever something goes wrong. It will allow them to make necessary adjustments before it’s too late.

Overseeing Farm Inventory

Over half of each country’s fruits and vegetable production is wasted due to poor management at the farm after harvesting. As much as 34% of the vegetables and fruits are ruined before they reach the end of the supply chain. That is an issue that clearly needs to be addressed.

With blockchain technology, sensors can be implemented to monitor crop storage regularly. Farmers can then access these sensors through a decentralized ledger that all players can easily access. Hence, farmers can plan and make informed decisions to avoid mold growth and infestation and improve their returns.

In addition, instead of manually inputting farm inventory data, blockchain technology can reduce labor by allowing digitally advanced input. That makes the inventory easily trackable and can be shared fast in the supply chain.

Reduces Human Error

As they say, human is to error. Farmers and food producers are not an exception. There are a lot of errors that may come about either during data collection, reporting by workers, or even simple calculations. 

Blockchain technology can minimize the losses associated with human error and failure. Hence, farmers and food producers can reduce manual labor with automated services. Hence, farmers can reduce losses and improve data collection on their crops to increase efficiency.

Fraud Prevention

Of course, the agriculture industry has had its share of bad players. Trying to use only human effort to counter this has proved futile. 

Blockchain technology stores data in a decentralized manner so that it cannot be changed or tampered with by anyone. Hence, it eliminates the risk of fraud and ensures that the people involved in online trading transactions are protected from unauthorized activities. Even if the price goes up or down, this technology prevents unauthorized increases or decreases.

In addition, blockchain technology can solve issues on information management processes in the post-harvest and pre-harvest value chains because it allows for continuous data exchange. Farmers can capture accurate information about the crop’s origin and the details of the trader and farmer, which is very important for export. It will also promote ease of doing business and security. End-buyers can feel more secure and confident in the process through farm-to-fork traceability.

Farmers and food producers can also easily maintain the records of all the transactions without using third parties to sort out the information. That eliminates the risk of fraud and ensures that the people involved in online trading transactions are protected from unauthorized activities.

Better Access to Financial Grants and Loans

Often, farmers and food producers lack sufficient money to keep up with production. Hence, it may put a general strain on agricultural production and the country’s economy. Many barriers prevent farmers and food producers from accessing formal financial services. These include lack of collateral and credit histories, the high cost of doing business in remote locations, and contract enforcement.

The lack of access to formal financial services can affect the efficiency of agricultural value chains. That can cause farmers to lose opportunities to maximize their yields and ensure the quality of their products.

With blockchain technology, farmers can access financial aid. How, you may ask? Digitization of the ledger through blockchain allows farmers to keep track of their income and improve their record-keeping. It can also help them access various financial services, such as loans and supply chain finance.

Land Registration

One of the most significant issues the agrifood industry faces is land registration. With the use of blockchain technology, it is now easier than ever to register land as it eliminates the need for manual entries and provides a convenient way to identify and record the land. That allows it to reduce the risk of misreporting and provides them with the necessary information to make informed decisions.

Through blockchain technology, farmers can also control the execution of their tasks, such as planting trees. It eliminates the need to manually enter information, which is tiresome and provides them with the necessary information to make informed decisions.

Shortens Transaction Processes, Saves Time

Through blockchain technology, farmers and food producers can instantly negotiate a price for their goods. That eliminates the need for manual transactions and allows them to benefit from a more efficient pricing system.

Reducing the need for brokers and intermediaries in the farm-to-market transaction mix has eliminated the need for dealers and created a premium for farmer communities.

Blockchain technology can help facilitate the payment of suppliers and buyers in international markets. For instance, by allowing them to make direct payments to their customers, blockchain can make it easier for them to access international markets.

Fairer Payments for Farmers

Various problems prevent farmers from receiving the full payment they are due for their produce. One of these is the time it takes to get the money from the bank. That is because traditional payment methods typically take a huge chunk of the farmers’ earnings in transaction fees.

A blockchain-based smart contract can automatically pay for a certain amount of goods and services after a specific condition has been fulfilled. It eliminates additional fees and allows users to enjoy the system’s benefits without paying excessive amounts. In addition, the bank does not take a portion of the farmers’ earnings. It also allows them to receive the full payment immediately after the goods have been delivered.

Many farmers also face issues when selling their products in the market due to their high prices. Intermediaries, on the other hand, enjoy significant profits while doing minimal work. A smart contract eliminates the need for intermediaries, allowing farmers to connect with retailers and receive a better price for their goods.

Efficiency for Farmers

Most farmers use a combination of software programs and spreadsheets to manage their operations. However, this method can be time-consuming and requires much work to send data to other service providers.

Through blockchain technology, farmers can store their data in one place, allowing them to access it and make changes without manually entering it easily.

It would allow them to keep track of various details about their business, such as their goals, the number of animals, their health issues, and the variety of crops they have planted. It would also allow them to monitor their employees’ schedules and how they are performing.

Instead of having multiple methods to manage their operations, farmers can keep track of all their data in one place. Hence, it prevents them from losing valuable information.

Access To Crop Insurance Services

Due to the effects of global warming, farmers have been experiencing unpredictable weather conditions that make it hard to claim damages. That is because many farming communities lack the necessary tools to keep track of their transactions.

With blockchain, farmers can easily verify their identity using blockchain-based solutions. This distributed ledger allows them to share information with other users across various networks to track it efficiently. If technological disruption were to be embraced more, it would allow farmers to recover their losses through a resilient legacy.

Logistics and Payments

Today, many farmers are aware of the challenges of the logistics of their agricultural supply chain. Many products are involved in the supply chain and have an unpredictable nature. For example, there could be issues with getting goods to the intended destination if there are unforeseen circumstances.

With a smart contract, farmers can get paid for their products on time and ensure they are in good shape when they reach their consumers. It eliminates the need for them to spend time and effort getting paid. Also, farmers can configure this solution to pay them throughout the year, which is ideal since they can spread out payments throughout the year.

Initiatives Already Working with Farmers

As a company focused on increasing organic food supply, Pipeline Foods aims to ensure that the growers are getting the best possible price for their products. To do this, they need to ensure that the data they collect is accurate and that the information is shared with the appropriate agencies. This process can help improve the efficiency of the data entry process and ensure that the information is verifiable.

Another company,, is a blockchain-based startup that uses technology to track crops and provide consumers with reliable information about them. It can help them make informed decisions about buying and selling their products. It also benefits farmers, allowing them to deliver high-quality products to their customers.

BlockGrain, an Australian startup, also recently started providing farmers with various features that can help improve their operations. These include real-time transactions and instant payments.

IBM is also working on developing an IoT platform through blockchain that can help farmers monitor the quality of their soil and irrigation systems. It can also help them keep track of their stored crops as they automate and digitize various aspects of their operations.

The Challenge Behind Blockchain Adoption

Despite the positive effects of blockchain technology on the future of decentralized applications, there are still many challenges that need to be resolved before companies can widely use it in the food industry.

One of blockchain technology’s main goals is to ensure that all of the supply chain’s participants have access to its platform. It includes retailers, wholesalers, farmers, and distributors. The challenge here is to develop a secure and consistent data storage system on the blockchain to ensure that it can be accessed and analyzed easily. 

Final Thoughts

Although blockchain technology is still in its early stages of development, it is widely expected that more companies will eventually use it in the food industry. That is because its potential to improve the efficiency and effectiveness of the supply chain is too significant to ignore. In addition, the increasing number of people working in the agrifood industry is expected to benefit from blockchain technology and create new jobs. 

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Samuel Mbaki Wanjiku

Samuel is an adventurous person who likes to explore topics in-depth and learn new things each day. His passion lies in gaining knowledge to help transform the world through his writing skills. He also believes in blockchain technology and its potential to usher in a cashless society. Currently, he is pursuing a Computer Science Bachelor’s degree driven by his fascination with emerging technologies. He has writing experience of about three years in different fields and two in blockchain technology.