Guest Article – Blockchain and the Agri sector
– Mr. Rajeev Kaimal, Co-Founder and MD of payAgri Innovations
India is an agrarian economy with 2nd largest cultivable land in the world at 157 Million hectares. We have all the 15 climates of the world enabling us to grow anything and everything. More than 60% of our workforce is engaged in Agriculture and it contributes 15% to the GDP.
With the population ever increasing across the world we have a third more mouth to feed by 2050 according to the Food and Agriculture Organization(FAO) of the United Nations. This means, food production must increase substantially. Though India is one of the largest or leading producers of many agricultural products including dairy, spices, pulses, tea, cashew etc, we are at the bottom when it comes to per capita productivity. Also, 90% of farm holding in India is small and medium leading to little or no intervention or use of technology or mechanisation.
Technology can play a vital role in the transformation of agriculture in India, whether it be the use of drones, sensors, weather data, prediction data or EWAS (Early Warning Systems), mechanical implements and blockchain technology. These technologies will not only help in enhancing production, quality, risk mitigation, reducing losses, wastage etc but also helps in following good agriculture practices thereby doubling the farmer income in less than five years as targeted by Prime Minister Narendra Modi.
Block Chain as a technology has been at the forefront of many discussions in the Agri tech space as it can help in establishing the traceability factor which is gaining critical momentum in many parts of the world. Major food giants like Walmart, Nestle and Unilever are teaming up with IBM exploring the use of block chain technology to manage the global food supply chain. “Blockchain technology enables a new era of end-to-end transparency in the global food system,” Frank Yiannas, Vice President of food safety at Walmart, said in a statement. They will be aiming to use blockchain to maintain secure digital records and improve the traceability of food items. It helps them to manage the data across a complex network that includes farmers, brokers, distributors, processors, regulators, retailers and consumers. Walmart and IBM have already run two successful blockchain trials tracking Chinese pork and Mexican mangoes.
Such a technology will help in simplifying the supply chain with automatic tracking of important information like temperature and quality of goods, shipment and delivery dates, safety certifications of facilities and even the farmer and the farm land from where the produces have been sourced. This also helps food producers and retailers to assure customers of the provenance and authenticity of their products.
What is BlockChain?
Blockchain is a technology that allows users to transfer value, or assets, between each other without the need for a trusted intermediary. The exchange is recorded in a ledger that is shared by all users of that blockchain. This “distributed” ledger provides a transparent view into the details of the assets, including who owns the asset, as well as descriptive information such as quality or location.
This technology can not only help in tracking the asset or goods (in this case) across the supply chain but can also help producers, manufacturers and even consumers to verify the accuracy of data from farm to fork. This is especially true with niche markets like organic products where the customers are willing to pay a premium for the authenticity. With consumers being more quality conscious, organic is the way forward and blockchain technology can play a pivotal role.
Similar incidents have happened even earlier, a decade ago in the United States a deadly strain of E. coli in tainted spinach ripped through 26 states, killing three people and sickening more than 200. The outbreak represents what can happen when sourcing food—and tracing contaminations—goes horribly wrong. After the incident, the consumers got scared and stopped eating spinach and restaurants pulled it off the menu. If only we could track, and pin point the source of the occurrence, it would have helped in fixing the issue faster and restoring consumer confidence. Such scandals can occur in any part of the world at any point of time and technology like blockchain can help in preventing it through traceability and transparency.
Use of Blockchain by the retail giant Walmart
Walmart in partnership with IBM is developing blockchain technology to provide the retailer with a way to indelibly record a list of transactions indicating how meat has flowed through a commercial network, from producers to processors to distributors to grocers—and finally, to consumers. The information that will be stored in the blockchain includes details related to farm origin, factory data, expiration dates, storage temperatures, shipping details etc. Such system could help prevent many scandals, disaster scenarios and nationwide outbreaks; at the same time maintain the much-needed transparency which many consumers today are demanding.
We are in the Information Technology age where what matters is the authenticity of information and reliability of technology. Blockchain with its authenticity and reliability is poised to bring a major revolution not only in the banking and finance space but also in agriculture. Recent research has predicted that the food traceability market will be worth $14 billion by 2019 and a number of startups are working towards introducing traceability solution for the food industry using blockchain. The large retailers and food companies are starting to look at using the technology internally like the US giant WalMart, Unilever, Nestle etc. Adoption/implementation of such a technology by companies in India can bring about the much-needed revolution in the Indian Agricultural space.