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Blockchain Technology in Agriculture: Application Techniques

18th Mar, 2024
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    Blockchain Technology in Agriculture: Application Techniques

    Blockchain technology in agriculture improves food safety by allowing information to be traced across the food supply chain. The capacity of blockchain to store and manage data enables traceability, which is utilized to aid in creating and implementing technologies for intelligent farming and index-based crop insurance. It represents a significant advancement in the field of contemporary agriculture. You can go for Blockchain Quality Engineer training to get hands-on with blockchain.

    From my expertise in this field, I can attest to the substantial impact that the Blockchain technology has been making on the agriculture industry. The utilization of Information and Communication Technology (ICT) for database tracking and maintaining information flow is significantly enhanced by blockchain technology. Unlike traditional setups, blockchain empowers multiple parties to access and validate new database changes, providing heightened security and reducing the risk of corruption in the agriculture sector.

    Instead of a single server and administrator, they grant access to all network members. Multiple parties may then access and validate new changes to the database, providing more security and reducing the possibility of corruption. Let’s learn more along the similar lines in this article.

    Blockchain in Agriculture: The Revolution 

    Blockchain technology or blockchain in agriculture can track all types of information about plants, such as seed quality, crop growth, and even the travel of a plant after it leaves the farm. This data can improve supply chain transparency and eliminate concerns associated with illegal and unethical operations. They can also help track contamination or other issues back to their source in the case of a recall. The major aim of these technologies is sustainability and food security. 

    Consumers can make correct purchasing decisions when they have this amount of openness. They frequently use this information to reward farmers and producers who implement good farming techniques.  

    How to Apply Blockchain Technology in Agriculture? 

    There are various blockchain uses in the agricultural sector, and more are being developed based on recent technological advancements. To analyze the key uses of blockchain, it is feasible to divide it into four broad categories: 

    • Intelligent Farming  
    • Food Supply Chain 
    • Insurance for Agriculture 
    • Agricultural Product Transactions 
    • Smart Agriculture 

    The technique of employing numerous current technical breakthroughs to increase the efficiency and dependability of the farming process is known as smart farming or smart agriculture. It incorporates information and communication technology (ICT), the internet of things (IoT), multiple sensors, machine learning technologies, and numerous data collecting and analysis equipment such as unmanned aerial vehicles. The connection between smart technology and farming is still new, but with the right security system in place, it can make operations much easier to carry out. 

    All of the procedures in the old method of controlling smart technology are often centralized, which leads to different mistakes and distortions in data collecting. It also leaves the entire system vulnerable to a cyber-attack. 

    One example is that environmental monitoring data is frequently administered and regulated by government agencies that have their interests in mind when managing this data. This empowers them to distort facts to make judgments that suit their objective. 

    I find it fascinating how blockchain technology has made it possible to securely store information. At every stage, from the seed to the sale of various agricultural products, all players involved can contribute essential data. What stands out to me is how blockchain ensures data openness and guarantees the complete immutability of all statistics. The decentralization aspect of blockchain is undoubtedly its greatest strength in smart agriculture. This not only facilitates seamless data delivery to various stakeholders but also prevents data loss and distortion. The time-stamping of all transactions in a blockchain adds an extra layer of transparency, making the entire process even more reliable.  

    1. Smart Farming Model 

    The value and promise of blockchain in agriculture have led to several smart farming models, which help to bring the advantages of this technology together with IoT sensors. One such architecture has been developed for greenhouses, utilizing a private blockchain that can be managed centrally by the farmer. 

    Another general-purpose approach has been presented, which also uses IoT technologies and blockchain. The basic premise of this framework is to aid in the development of trust among blockchain participants. Numerous stakeholders may use smartphones to access data created at every stage of the farming process, from seeding to product sales. 

    2. Smart Farming Technology 

    Organizations such as Filament have begun to develop smart agricultural technology. One example is a business that sells products with smart farming technology that connects multiple networks to actual items. The business created a coin-sized piece of technology to assist users in safe transactions against a blockchain. 

    3. Food Supply Chain 

    The food supply chain has grown longer and more intensive than ever because of globalization trends. However, there are several challenges in the food supply chain, including food safety, quality, traceability, trust, and supply chain inefficiencies. These factors burden the economy and society and endanger customers' health. 

    Blockchain technology contributes to the resolution of many of these challenges by facilitating the establishment of trust between producers and customers. Offering specific product information within the blockchain can considerably increase transparency in this process. 

    This has far-reaching repercussions for businesses and farmers alike. It enables businesses to raise the value of their products and hence increase their market competitiveness. It would also make it extremely improbable that providers of low-quality or fraudulent goods would be able to stay in business for very long if their tactics continued. 

    From a consumer standpoint, the usage of blockchain can be critical in providing people with trustworthy and legitimate information about how their food is produced. It may be used to address a wide range of customer concerns about food quality, safety, and environmental friendliness. Consumers have more flexibility to communicate with food producers as they better grasp their food production process. 

    When considering the benefits of blockchain from a regulator's perspective, it is evident that this technology provides reliable information to required entities to assist them in enforcing efficient regulations. 

    Many firms have already begun to use blockchain for agriculture in their operations due to the multiple applications of blockchain in the food supply chain and management. Wal-Mart,, and Alibaba are all using traceability initiatives based on blockchain principles to closely track their whole sales, processing, and food manufacturing process. 

    4. Agricultural Insurance 

    Climate change in recent decades has rendered the entire agricultural process increasingly uncertain. Weather extremes have an impact on agricultural and livestock quality. Farmers often use agricultural insurance systems to mitigate the unpredictability of farming. 

    Farmers can select from various insurance plans that vary in how payouts are calculated and losses are assessed. A typical type of agricultural insurance, known as indemnity-based insurance, pays farmers according to the conclusions of a professional who examines the farm for damage. However, indemnity-based insurance has several restrictions related to damage estimation and a lack of information from the insurer, which negatively affects farmers and insurance companies. 

    Blockchain technology enables index-based insurance to give a superior alternative to indemnity-based insurance. It enhances overall insurance process accuracy by triggering a reimbursement based on a quantifiable indicator rather than the loss. 

    Blockchain can help to enhance index-based insurance in the following ways: 

    1. The payment basis can be changed to a timely and automatic criterion, such as weather data. This parameter may trigger the final payout depending on the explicitly established parameters of a smart contract. 
    2. Second, the system would use an oracle to provide all data sources, including weather and plant development information. This greatly improves the payment process and index determination. 

    Etherisc, a Swiss-based business that assists farmers in obtaining decentralized crop insurance based on blockchain technology, is one of many companies using smart index insurance contracts. These contracts are in use throughout the world and increase overall dependability. For example, they're currently being used by farmers in regions such as India to obtain crop insurance payments based on meteorological data. These payments increase the overall reliability of this procedure. 

    5. Transactions of Agricultural Products 

    The use of blockchain technology can significantly speed up the acquisition and sale of agricultural products on ecommerce sites. It does so in two ways: 

    Data Security: Blockchain provides a secure authentication system with private key encryption, increasing the authenticity of all data acquired throughout planting and harvesting. 

    Supply Chain Management: In terms of supply chain management, blockchain can increase overall efficiency by lowering the costs associated with signaling. Furthermore, it contributes to safety by providing digital payment solutions that eliminate transaction costs. 

    The use of cryptocurrencies in this technique will also reduce transaction costs. These changes all contribute to a more trusting relationship between customers and sellers. This has numerous implications for farmers, who stand to make significantly more money on their products and get a larger audience for their goods via the internet. 

    How Can Blockchain for Supply Chain Help Farmers? 

    People nowadays want to know exactly where their food originates from. A desire to eat healthy, along with increased acceptance of technology across all disciplines, has led agribusinesses to seek supply chain management software to improve food safety, food quality, and the traceability of the whole farming supply chain. 

    Precision farming, precision agriculture solutions, farmland mapping, IoT sensors, vertical farming systems, location intelligence, crop management software, and transportation technologies enable agricultural businesses to achieve better food production and supply chain management in agriculture. Increased food consumption presents additional concerns, such as counterfeit items jeopardizing food supply networks at various stages. 

    Farmers and consumers suffer due to a lack of transparency and inefficiency. Finally, blockchain farming and distributed ledger technology (DLT) have the potential to improve agricultural supply chain efficiency, transparency, and trust. By establishing trusting partnerships, blockchain for the agriculture supply chain may empower all market participants. 

    Agriculture business may be transformed by blockchain for supply chain by:  

    • Simplifying all phases of the agricultural supply chain 
    • Following a product from farm to retail shelf 
    • Increasing food safety and removing counterfeit goods 
    • Lowering financial risks and encouraging inclusive trade 
    • Making agricultural finance services available to farmers and companies 
    • Using Data Science in agriculture to provide smarter market data for improved decision-making; legally demonstrating certifications to necessary authorities 

    How Blockchain Benefits Agriculture and Food Industry? 

    The benefits of blockchain in the agriculture supply chain are: 

    • Transparency 
    • Analytics 
    • Security 
    • Streamlined operations 
    • Customer engagement 

    Advantages of Blockchain Technology in Agriculture

    I'm intrigued by how blockchain technology transforms transactions in agriculture, allowing peer-to-peer interactions without the need for intermediaries like banks or middlemen. In this setup, trust is no longer placed in a central authority but in encryption and peer-to-peer architecture. This shift has a significant impact on rebuilding trust between producers and customers, ultimately reducing transaction costs in the agri-food sector. The reliability of blockchain technology in agriculture stands out as a trustworthy method for facilitating transparent and direct transactions.   

    Thus, fraud and defects may be identified fast. Furthermore, implementing smart contracts may notify faults in real-time (Haveson et al., 2017; Sylvester, 2019). 

    Because of the agri-food system's complexity helps handle the difficulty of tracing items in the vast supply chain. Thus, the technology delivers solutions to consumer, government, and other stakeholders concerns about food quality and safety. 

    Blockchain technology promotes transparency among all parties involved and allows the acquisition of verifiable data. Blockchain can record every stage of a product's value chain, from conception to death. The trustworthy data on the agricultural process is extremely helpful for building data-driven facilities and insurance solutions to make farming smarter and less susceptible. 

    You can go for KnowledgeHut Blockchain Quality Engineer training to understand the concepts in depth. 

    What are the Challenges of Blockchain Technology in Agriculture? 

    Blockchain technology allows for the traceability of information in the food supply chain, which aids in improving food safety. It enables the creation and deployment of data-driven technologies for smart farming and smart index-based agriculture insurance by providing a safe means of storing and managing data.  

    Furthermore, it has the potential to lower transaction costs, improving farmers' access to markets and providing new revenue sources. Despite huge potential benefits, there are significant limits to using blockchain technology in the agriculture and food industries. Personally, I believe further research is essential, especially in understanding the motivations of transacting parties to contribute accurate information to the blockchain ledger, a crucial aspect, particularly in the context of smallholder farming.  

    Individual farmers own and disseminate the knowledge created throughout the farming process. The benefits of blockchain technology for farmers may vary depending on the size of the farm. On the other hand, smaller farms might readily engage in a blockchain-based insurance market. Collecting and integrating on-farm data, on the other hand, may be more convenient for bigger farms. As a result, future studies should attempt to predict which farms will profit and which will suffer due to the implementation of blockchain-based solutions. 

    Second, accessing the data posted to a blockchain can be quite expensive, which will be a barrier to the sector's adoption of blockchain technology. The setup of a distributed ledger may be very inexpensive; however, gathering data necessary to make the ledger usable, for example, DNA from agricultural animals, might be costly. Sampling can save costs, but it requires a large population of items for data collection. This indicates that the average cost of data collecting is cheaper for bigger farms than for smaller farms, raising concerns about expanding the income disparity. 

    Third, blockchain does not interact directly with current legacy systems. The technology must be integrated with an existing database and legacy systems such as enterprise resource planning, warehouse management, and industrial execution systems to be implemented successfully. Building an infrastructure to support blockchain technology takes time. Middleware and communication protocols that can connect current systems will be critical. 

    State of Blockchain Technology in Agriculture Worldwide 

    The United Nations estimates that counterfeit food damages the world economy by almost $40 billion annually. According to MarketsandMarkets, the agriculture supply chain produced $60.8 million in market value in 2018 and is expected to create $429.7 million by 2023, increasing at a CAGR of 47.8% during the forecast period. 

    Blockchain technology in agriculture, such as distributed ledgers and smart contracts, has the potential to eliminate counterfeits in agri-food production and supply chains, resulting in healthier goods for consumers, increased trust among business participants, and a better living on a global scale. Businesses may begin recognizing the most effective blockchain use cases to strengthen the agricultural supply chain by doing extensive research and real-world testing of methods to use blockchain in the agri-food industry. Blockchain assists farmers in the following way: 

    1. Food Safety

    The use of blockchain in agriculture has the same potential to be as useful as the usage of IoT. The blockchain can provide an effective and dependable answer to the pressing requirement for product traceability and supply chain regulation. A blockchain helps to eliminate unnecessary operations, improve quality control, and monitor storage conditions by storing information about products at each level of the agricultural supply chain.  

    Agricultural enterprises currently monitor crops with smart IoT sensors, and distributed ledger technology will strengthen sensing technologies by collecting and confirming all data. 

    2. Agricultural Insurance  

    Self-executing smart insurance contracts based on distributed ledger technology will improve insurance programs for private farmers, agricultural holdings, and all participants in the supply chain. Smart contracts will eliminate the need for humans to evaluate insurance claims, making the process simpler, quicker, and more transparent.  

    contracts will also reduce the likelihood of fraudulent claims and corruption among insurance providers because no actor can change insurance plans after they've been agreed upon. 

    3. Agricultural Finances  

    For smallholders that wish to invest in farming, the blockchain may offer transparency to agricultural financial transactions, credit histories, and financial agreements. Shared access and irrevocable agreements will allow smaller farmers to pay for raw materials and machinery in installments or after delivery while ensuring fair market pricing. 

    4. Environmental Sustainability 

    Climate change and unpredictable weather impact agriculture more than other businesses. In addition to taking responsibility for our planet's future, agribusinesses must adhere to the standards of numerous environmental programs such as climate change and green bonds. Companies are under increasing pressure to monitor, verify, and report on sustainability criteria in order to demonstrate to investors their climate-friendly farming methods and keep their operations functioning. 

    More ways Blockchain can aid farmers: 

    • Higher product quality and fewer ailments caused by food 
    • Fair pricing for all actors across the whole value chain 
    • Waste reduction and sustainable business 
    • Small farmer financing and insurance 
    • Financial transaction facilitation in emerging economies 
    • Traceability across the value chain 
    • Reducing emissions and supporting environmentally beneficial activities 
    • Increased consumer awareness and satisfaction 
    • More informed purchase decisions by consumers 
    • Lower transaction fees and reduced reliance on intermediaries 
    • Transparent transactions and fraud elimination 
    • Access to data while safeguarding privacy by legislation 


    While blockchain technology is not yet finalized, the sheer quantity of benefits gained from this medium in a very short period is amazing. Blockchain can completely transform the agricultural sector if properly deployed.  

    As technology improvements continue, I believe, the dependability and efficiency of this system are likely to increase. The use of blockchain in the agriculture and food industry has helped the farmers and people involved with the process. Blockchain and agriculture now come hand in hand; the usage of blockchain in the agricultural sector has a sustainable business and works toward the reduction of waste and smooth future transactions sans fraud. Go for Blockchain Technology training and get the best of the learning experience.  

    Frequently Asked Questions (FAQs)

    1How has blockchain affected the agriculture industry?

    Blockchain can alter the way agricultural commerce is conducted fundamentally. Blockchain technology has the potential to improve trust among parties, allow information exchange throughout the supply chain, and drastically cut agricultural transaction costs. 

    2What are the benefits of blockchain in food security?

    Blockchain technology (BT) is one instrument that has the potential to enhance future food system rules, traceability, as well as the flow and success of supply chains. BT can improve consumer trust, production speed, and product efficiency, which the food sector might benefit from right now. 

    3How might blockchain technology be leveraged in a farm to market design?

    The company's online commodities market, which uses blockchain, links farmers and buyers to a bigger pool of clients locally, regionally, and worldwide. Both can see previous transaction history, what local cash prices are doing, and the depth behind the bid and offer. 

    4Which state in India has introduced blockchain technology in agriculture?

    The Jharkhand State Government used blockchain technology in agriculture in India.  

    5Which country is most likely to lead a blockchain revolution in agriculture?

    The state government of Jharkhand is the first in India to deploy blockchain technology in agriculture. 


    Dr. Manish Kumar Jain

    International Corporate Trainer

    Dr. Manish Kumar Jain is an accomplished author, international corporate trainer, and technical consultant with 20+ years of industry experience. He specializes in cutting-edge technologies such as ChatGPT, OpenAI, generative AI, prompt engineering, Industry 4.0, web 3.0, blockchain, RPA, IoT, ML, data science, big data, AI, cloud computing, Hadoop, and deep learning. With expertise in fintech, IIoT, and blockchain, he possesses in-depth knowledge of diverse sectors including finance, aerospace, retail, logistics, energy, banking, telecom, healthcare, manufacturing, education, and oil and gas. Holding a PhD in deep learning and image processing, Dr. Jain's extensive certifications and professional achievements demonstrate his commitment to delivering exceptional training and consultancy services globally while staying at the forefront of technology.

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