Agriculture on the blockchain: Sustainable solutions for food, farmers, and financing
This research (PDF) in SSRN explores applications of blockchain across the agricultural sector, beyond the typical finance use cases. In considering agriculture itself as a chain, a network that reaches from farm to fork, blockchain efforts are analysed to improve safety, efficiency, and accountability at every stage of the process. Traceability across the global food supply chain ensures food safety and is thus far the most adopted application of blockchain for agriculture. Smart contract and chain of custody records can mitigate instances of food fraud and identify untrustworthy middlemen and business practices that exploit both independent farmers and cooperatives. Sustainable agriculture and “local economy” cooperatives can generate economic activity and retain more value locally. Instantaneous transactions and accountable origin and route tracking of goods can transform a sprawling, complicated and decentralized food market into a local one with high trust and quality. Agriculture finance innovations, include transparent and efficient futures contract payment platforms, smart contract insurance against crop catastrophes and microfinancing opportunities for under-served communities that can grow from subsistence-level loans into investments in new businesses. One recommendation for decision-makers is to experiment with, and add blockchain capability to an organization’s food safety programmes. Further, partner with champions and key personnel of the organization’s value chain systems; such partnerships lead to coupling between blockchain and value chain systems. Participation in global standards initiatives is needed to ensure that the blockchain maps to the standards and bridges with other blockchains. Lastly, organizations should contribute time and money to a third party or consortium blockchain initiative to mitigate the risk of going at it alone.