Saturday, February 10, 2018

Blockchain technology in Agriculture

Blockchain technology in Agriculture will change the scenario of current AgricultureAgriculture is a primary requirement of human rehabilitation. It is major job provider to world populations. Agriculture is facing a lot of problem due to poor data integration.  Somewhere people are doing overproduction and somewhere people are dying due to hunger & malnutrition. Problem is not with production, the problem is with integration and interpretation of information. Agriculture data are collected by the various organization but unfortunately, all these data are not integrated. They are centralized in the different organization. A crop cultivation starts today, and it gives production after 4-5 months. After 4-5 months due to poor storage facilities and poor prices, farmers throw the produce on roads, but no consumer gets that commodity free of cost.  4-5 months is sufficient time for decision making about storage and demand generation. Govt can come with “that particular crop” friendly policy so that after production produce is consumed properly and timely.

Blockchain is simply digitalized decentralized public ledger.  Which is verified by its own users. Blockchain gives a clear detail about the transfer of information from one block to another block.  Blocks are simply the point of transitions. This information is shared with all the network hardware equally. Every block has clear information from where this information is coming and where this information is going. There are clear digital identities of every block. Which can’t be changed by one or two people? If someone will try to change then blockchain will declare false to the entire chain of information and it will not be accepted by the blockchain network. There is no control on information, of one person. If information will be digitally true, then only it will be accepted.  No one can put a false information in a network. No one can delete the accepted true information.

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Blockchain Technology In India
How is it helpful in agriculture?

In agriculture, there are three major stockholders, first producer, the value addition person and last consumer.  If we integrate all the information real time, then it will become very easy for all the major stockholder.   There are three major problems, which leads to price inflation or deflation in agriculture overproduction, lower production, and wastage. All these problems can be solved by the blockchain technology. Blockchain technology is peer to peer there is no one in between who will read the information. A consumer of cumin from Europe can directly contact with a producer of cumin in India.

Generally, a farmer doesn’t know what is a requirement of the consumer. He starts cultivation on the basis of current price and available resources.  If last year prices of tomato were 1.5 USD /kg this year everyone will put tomato and after four months everyone throws the tomato on roads due to poor storage facilities and lower market price.  Blockchain technology will tell the farmers real-time requirement of current sowing. For example, there is the requirement of 100 Units of wheat and all the farmers of the world have sown seeds or done the cultivation which is sufficient for production 100-unit wheat. Once this information will emerge in the network. Will a farmer do further sowing, simply “NO”? Will all seeds companies produce seeds for production of 200-unit wheat? Simply “NO”. If processing unit came to know that this year wheat production in its area is 10 units will it prepare the warehouse for 20 units?? Simply NO.

If consumption of Gram or pulses is 100 Unit in India. The farmer came to know that sowing for production of 90 units has completed. There the is an opportunity to produce 10 unit of the pulse. Will he produce more pulses? Simply “YES”.  In another example, a country has exported 10 unit of pulses. The day order is issued there will be a vacuum in commodity chain of that country. A country can easily manage the vacuum before prices start to inflate after 4-5 months. There is information that Price of Ukraine wheat is USD 1/Kg after importing it will cost 1.2 USD to Bangladesh. Cost of production of wheat is coming only 1.1 USD/Kg in Bangladesh. Will farmer from Ukraine produce wheat to export to Bangladesh? simply “No” if Bangladesh has an opportunity to produce wheat at 1.1 USD/Kg will it consider importing wheat from UKRAINE? Will farmer of Bangladesh not consider producing wheat? simply YES. Here I am giving an example of the country to country. The blockchain is peer to peer direct communication between farmer to consumer. A consumer of Bangladesh can make a contract with the farmer of Ukraine to produce wet for him. IF farmer of Australia is providing cheaper when then he can purchase it from Australian farmer.

Problem of wastage

There is information in the chain that in a particular region there is the production of 100 units of tomato and storage facility is for 20 units. What will a storage company do? It will develop a space for storage of tomato.  There is information in blockchain that 100 units of Potato are laying in “X” warehouse. There will be no new production for 100 units and existing stock will not be thrown on roads. In block, there is information that this year consumption of agrochemical is lower than usual. It means that climatic conditions are good there is no attack of disease and insect and production is expected to be more than normal. The final production will give information to stop production of new crop.

These are only basic problems. It can also solve the other complicated problems related to climate, availability of farm inputs, availability of agriculture finance. A farmer needs finance from a bank, the bank can check that they are giving finance for in-demand crop or for an overproduction crop. Blockchain will make it easy and secure in the transfer of information it will give accuracy. There are no chances in the manipulation of data. As information can’t be put in the back date. IF “X” is a farmer, he has sown on seed for the production of 200 units, he can’t make an agreement to sell the 250 units.  No one can’t hoard the material to create the problem of the artificial supply shortage, simply “NO”. 

Blockchain technology is future of world trade. Word trade will come on a platform. All the information will be distributed. It will make sure that no human will dies due to the shortage of food. A lot of countries are facing the problem of shortage of food. If the information is available in the blockchain, then one country can donate the food when the prices are minimum. There will be no miss use of resources. Resources can be used for another task. Global trade in agriculture commodities will become easy. Buyer and seller can easily check that where is their material. No one will do a false contract of supply of the commodity. If “X” doesn’t have stock of spices he can’t sell it to a buyer. Buyer will go to the real seller. Blockchain technology will eradicate the unnecessary middleman. The problem of payment will also eradicate. Buyer will contact seller and seller will get the payment at defined term very fast once the liability of seller will have gone he will get the payment.

It will benefit to small and medium farmers. As per existing information, 70 % of world agriculture production comes from small and medium farmers only.  Organization are working very fast on use of blockchain technology in agriculture. Agriculture and Hunger are the major thrust area for blockchain technology. Extension of existing blockchain to other industry will make it is easier to assist agriculture and serve humanity.


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