Blockchain is one of the latest advances in the field of information and communications technology that has begun to revolutionize our planet. The applications of blockchain are only now being fully explored, and its potential is considered truly immense .

A recent study by Grand View Research Inc. highlighted the fact that the global blockchain industry will be worth $394.60 billion by 2028. This says a lot about the future potential of this sector .

Blockchain has also recently begun to influence the dynamics of the agricultural industry. We discuss how blockchain development services and crypto are shaping the agritech sector, the applications of this technology in the agricultural industry, and the benefits and limitations of this innovation in our article below.

What is Blockchain Agriculture?

Blockchain can be defined as the ledger of transactions and accounts that are noted and stored by all participants involved. The purpose of blockchain is to increase transparency and accountability, and that is why it is considered an important element of modern agriculture.

Blockchain in agriculture or agriculture is used as a system that helps increase the volume of reliable information available regarding inventories, contracts in agriculture, and the overall status of farms. Collecting this type of information has been an expensive affair in the past, but blockchain may help change that in the near future.

Thanks to blockchain in agriculture or agriculture, it is now possible to improve the quality of the food supply chain and maintain trust between customers and farmers by constantly tracking the provenance of various foods.

As it is a trusted and reliable method of storing data, it enables the facilitation of various data-driven innovations to herald the era of smart agriculture. When combined with the concept of smart contracts, it also helps smooth out the nature of transactions between various stakeholders by making things more timely.

This is just the tip of the iceberg when it comes to blockchain in agriculture or agriculture. We look at the various examples and applications of blockchain in the agriculture landscape in the section below.

Examples and applications of blockchain in agriculture

Currently, there are numerous applications of blockchain in the agriculture landscape, and more are being developed based on recent innovations in technology. To discuss the main applications of blockchain, it is possible to divide it into four main segments:

• Smart agriculture

• Food supply chain

• agricultural insurance

• Agricultural Product Transactions

• Smart agriculture

Smart farming is the process of using various modern technological developments to improve efficiency and reliability and the agricultural process. Although smart technology has been available for agriculture for some time, a major issue in the application of this technology has to do with establishing a reliable and comprehensive security system to properly manage and use the data that is collected.

In traditional smart technology management systems, all mechanisms are usually centralized, and this leads to various inaccuracies and distortions in data collection. It also opens the possibility of leaving the entire system exposed to a cyber attack.

An example of this is the fact that environmental monitoring data is often managed and controlled by government agencies who tend to have their own interests in mind while handling this data. This gives them the power to manipulate information in order to make decisions based on their agenda.

Thanks to blockchain technology, it is now possible to store information securely. The various actors in the process can generate the necessary data every step of the way, from seed to sale of various agricultural products. Blockchain helps maintain data transparency and ensures that all figures are completely immutable.

The decentralization that blockchain development company offer is by far its greatest strength when it comes to smart farming. This feature also allows for ease of data distribution to the screens of various stakeholders while minimizing data loss and distortion. All transactions on a blockchain are also timestamped for the sake of transparency.

Smart agriculture model

Based on the utility and potential of blockchain in agriculture, numerous smart farming models have been developed so far that help culminate the features of blockchain and IoT technology.

One such model has been developed specifically for greenhouses that require the use of IoT sensors to act as a private local blockchain that the farmer can easily manage centrally.

Another model has been proposed for general use that also uses IoT and blockchain technology. The central principle of this framework is to help develop trust between the various blockchain participants. Various stakeholders can use smartphones to access the data generated at every step of the agricultural process, right up to the sale of the products.

Smart farming technology

Many companies are also investing a lot of time and resources into developing various pieces of technology related to smart farming. An example of this would be “Filament”, a brand that offers devices that can connect multiple networks to physical objects using smart farming technology. The company developed a coin-sized piece of hardware to help people make secure transactions on a blockchain.

Food supply chain

The food supply chain in agriculture has become longer and more intense than ever thanks to the forces of globalization. However, the fact is that there are many problems in today's food supply chain, and this includes issues related to food safety, quality, traceability, trust and supply chain inefficiency. This tends to be a burden not only on the economy and our society, but also endangers the health of customers.

Blockchain technology helps solve a lot of these problems by enabling an environment where trust can be established between producers and consumers. Transparency in this process can be greatly increased by offering individual product information within the blockchain.

This also has huge implications for businesses and farmers. It allows organizations to increase the value of their products and, therefore, increase their competitiveness in the market. It would also make it very unlikely that suppliers of poor quality or fraudulent products would survive in the economy for long if they continued their bad practices.

Also from a consumer perspective, the use of blockchain can be vitally important in offering users reliable and authentic information about how their food is produced. It can be used to address numerous consumer concerns related to the quality, safety and environmental friendliness of their food. As consumers are able to gain a greater understanding of their food production process, it allows them greater freedom to interact with the producers of their food.

When viewing the merits of blockchain from a regulator's point of view, it is clear that this technology offers accurate information to organizations necessary to help them execute efficient regulations.

Thanks to the various applications of blockchain in the supply chain and food management, numerous organizations have already begun to use this technology in their processes. Brands such as Wal-Mart, JD.com and Alibaba are actively using traceability projects based on blockchain principles to closely track their entire food sales, processing and production process.

Agricultural insurance

Climate change in recent decades has made the entire agricultural process highly unpredictable. Extreme weather conditions affect the quality of both crops and livestock. In order to counteract the unpredictability of agriculture, agricultural insurance plans are considered an option for most farmers.

Farmers pay a reasonable insurance premium at the beginning of their growing cycle and are eligible to receive a payment if they experience losses on their farms due to weather anomalies. This gives farmers some leeway to deal with uncertainties caused by climate changes.

There are several types of insurance policies available to farmers that differ depending on how losses are calculated and payments are made. Indemnity-based insurance is a popular type of agricultural insurance that compensates farmers based on the evaluation of an expert who visits the farm to examine damage.

However, indemnity-based insurance has numerous drawbacks related to damage assessment and lack of information from the insurer, and this negatively affects farmers and the insurance agency in the long term.

Blockchain can contribute to the improvement of index insurance in two main ways. First, the basis of payments can be changed to a timely and automated parameter, such as weather data. This parameter can be used to trigger the final payment according to the clearly defined terms of a smart contract.

Secondly, all data sources, including weather information and plant growth information, can be automatically used in the insurance plan with the help of a smart oracle. This helps substantially improve the payment process and rate determination.

Smart index-based insurance contracts are already in play in several places around the world. Etherisc, for example, is a Switzerland-based organization that helps farmers obtain decentralized crop insurance that is based on blockchain technology. Payment for this insurance is based on meteorological data, which improves the reliability of the entire process.

Agricultural Product Transactions

Buying and selling of agricultural products on e-commerce sites can be boosted to a great extent with the help of blockchain technology. It helps this segment in two key ways:

• Information security

• Supply chain management

With respect to information security, blockchain offers the vital feature of private key encryption to improve the validity of the authentication process. This can help apply all the data collected from the planting and harvesting phases safely.

In terms of supply chain management, blockchain helps improve the overall efficiency of the process by reducing the cost of signaling for all entities involved.

Additionally, blockchain development services also help improve the security of the payment process by offering digital payment options with zero transaction fees. Using cryptocurrency in this method will also help reduce the transaction cost further.

All this helps increase consumer confidence in the process of purchasing agricultural products on e-commerce sites. This translates into numerous benefits for farmers who can earn much more money and get a larger audience for their products online.