Can Blockchain Make Agriculture Smart?
According to the United Nations, the world population is expected to reach 9.7 billion by 2050. But is our Agri sector equipped to face this future? Even today, global concerns like malnourishment and poverty demand accelerated food production and distribution.
Our (Humanity’s) best shot today is to bring smart sensors, artificial intelligence, blockchain, predictive analytics, and big data analytics into the agriculture sector. Disrupt and reinvent the industry to meet the demands and make it more efficient, precise, and resilient in the face of environmental challenges.
Read ahead to draw insights into how Smart Agriculture can reshape the food production industry.
What is smart agriculture?
Smart Agriculture refers to agriculture practices that are enforced by modern technologies. Deep technologies such as IoT, AI, autonomous bots, blockchain, etc., can add much value to the Agri sector to increase production and distribution efficiency. The end goal is to improve and increase the quality and quantity of the crops while optimizing the human labor used.
According to a Machina research report, IoT device installations are projected to experience a compound annual growth of 20% worldwide. The number of connected agricultural devices is expected to grow from 13 million in 2014 to 225 million by 2024. Numbers, for sure, indicate that the industry is slowly embracing deep tech to enhance production efficiency. But should we worry about whether this adoption rate is fast enough?
Latest Technology Trends in Agri Sector
One of the latest tech trends in the Agri sector is the usage of blockchain technology along with IoT in food production. It offers a simplified approach to optimizing farming resources ( water, labor, fertilizer). How it’s done;
IoT devices: IoT devices and smart sensors help farmers to do farming with data-driven insights. For example, sensors can sense the changing pH level of soil or water and notify farmers to take remedial measures. In modern farming, the entire farm can be monitored using sensors. To measure vital values like temperature, pH, soil moisture, humidity, light, etc., and derive a course of action from the collected data. IoT sensors and devices generate data to help farmers make well-informed crop growth decisions. Data Enrichment adds more value to the captured information to improve its quality.
Machine learning: The tons of data generated from a farm are useless if it is not utilized. Farmers are in no position to evaluate these data and make insights out of them. Machine learning models can help here a great deal. Predictive models can drive several high-value use-cases, including Crop Quality Recommendations, Crop Identification, Crop Yield Prediction, Grow Score (Automated crop growth factor), and Crop Demand Prediction. For example, by sensing the crop vitals and analyzing the vast data, insights can be derived into how much water or manure will be used. Such intelligent insights are the way for the Agri sector to beat the productivity and profitability issues. Learn how to employ AI in the Agri sector and measure its impact.
Blockchain: Production is one part. Distribution is another whole game. Food fraud is an estimated US$30 to $40 billion global problem. With the introduction of Blockchain technology in the food supply chain, Fraudsters will find it harder to infiltrate supply chains and profit from food fraud. One of the fundamental issues with conventional food quality assurance systems is the lack of a uniform recording system among producers, suppliers, and retailers across the food supply chain. A blockchain-based food quality assurance system that can help maintain a verifiable and tamperproof record of the food products along their journey from farm to fork would be the perfect solution.
Automation: The application of RPA in the agriculture sector is huge. The immense benefits farmers, growers, and traders receive when agricultural operations are automated through different RPA software. With Robotic Process Automation, stakeholders can reduce production costs and management overheads by reducing manual labor. Using RPA, farmers and growers can efficiently automate farm management to better plan and predict outcomes, analyze pricing, monitor inventory, improve accounting, etc.
Blockchaining the Food Supply Chain
The emergence of blockchain creates trust and transparency in the food supply chain ecosystem and ensures food safety. Food Supply Chain tracking is critical to exploring the food source.
A blockchain-based food quality assurance system that can help maintain a verifiable and tamperproof record of the food products along their journey from farm to fork would be the perfect solution for supply chain frauds. The blockchain system would allow checks to be made at every level of the supply chain, ensuring the highest levels of food security. In the event of contamination being detected, the source of the problem can be easily traced, and only the affected lot can be pulled off the shelf. Apart from drastically reducing food-related diseases, it would also reduce the healthcare burden associated with the same. For example, a 1% reduction in the number of foodborne diseases in the U.S. would result in a saving of US$ 700 million.
Rethinking the Agricultural finance
One of the biggest challenges farmers face, especially in emerging markets, is the lack of capital investments. Agriculture needs substantial investments. If the farming does not produce enough yield, the loss has to be borne by the owner, putting them in a high-risk situation. However, the innovation in micro-investments and blockchain-based crowdfunding for Agri projects are on the rise.
The key concept is that investment risk is highly distributed. and Investors can get good ROI once the yield is produced. The models pitch on the idea that the loss risk to profit ratio is acceptable for the users. Rather than one person or company taking the entire risk.
FarmFunder is a US-based equity crowdfunding platform for the agriculture sector. Investors become part owners of farmland and receive annual returns from the crop yield, in addition to eventual returns from the value appreciation of the land itself. Steward is another example, a P2P loan company offering debt crowdfunding to farmers. Investments begin at $100. The financial services enabled by blockchain allow smallholders to invest in agriculture and relieve liquidity.
Transparent information sharing: Blockchain enables transparent access to financial details too involved parties from the stored information.
Effective audits: The automated auditing process can make the audit environment cost-effective. The secured and permanent information can be used as a verified source.
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