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Traceability in Agriculture and Food Supply Chain using Blockchain Technology
Blockchain technology has gained popularity across the world as it offers a wide range of applications in multiple sectors. Many industries, including healthcare, law, real estate, banking, aid, and others, are drastically transformed by blockchain technology. Along with that, the agriculture sector also has the potential to be dramatically changed by the usage of blockchain technology.
Efficient supply chain management is hugely important for each industry and agriculture is no exception. Blockchain technology can benefit the agriculture sector by keeping records of the food supply chain, including; all types of soil, seeds, and fertilizers used during the production phase to the harvesting of the crops in the system, and information about the distributors and their processes which ensures data transparency and traceability. More importantly, creating transparency in the agro supply chain can help address the growing list of problems related to food safety, contamination, adulteration, haphazard use of chemicals to increase productivity, etc.
Today, food safety has become one of the significant concerns among individuals all across the world. According to the Food and Agriculture Organization (United Nations), 1 out of 10 people fall ill after eating contaminated food, and about 420,000 die every year, out of which 125,000 are children below five. Contamination of food has caused food-borne infections, which can occur along with the food supply, delivery, and consumption chain. They can be caused by various environmental contaminants, such as water, soil, or air pollution, and improper food storage and processing, which has led to severe issues in individuals' health.
In recent years, the agriculture sector has been plagued by numerous catastrophes. With the excessive use of pesticides and other hazardous chemicals, a threat to the quality and safety of foods and agriculture products has increased rapidly. Agriculture can benefit from blockchain technology in a variety of ways. It can provide solutions to all these problems related to food supply and its safety and also helps the individual become more accountable for the activities carried out in the food supply chain.
The following are some of the companies that are using blockchain in agriculture to change the way we consume our food:
AgriChain is a decentralized blockchain technology that allows supply chain parties to manage and communicate in real-time and provides a secure and transparent platform for agricultural participants to transact globally. The system aims to connect farmers, distributors, and retailers for more efficient inventory management.
AgriLedger is a UK-based company that provides a set of food traceability solutions to farmers. These help agricultural businesses create digital identities, track inventories, store transaction data, access finance, and many more. AgriLedger has also been working in Haiti on a World Bank-backed blockchain project. This project aims to provide Haitian farmers with global market access to sell and distribute organic produce.
The IBM Food Trust is the world's largest blockchain-based agricultural technology project. IBM has created a network that gives global agricultural supply chain partners access to a range of blockchain capabilities. These techniques are intended to improve transparency, uniformity, efficiency, waste reduction, and profit recovery in the global food supply chain.
Verified Organic is a blockchain application built on Ethereum that aims to improve transparency in the organic food supply chain. The decentralized platform can track and trace organic produce from the farm to the table, authenticating production and distribution steps as they happen. On the blockchain, all data is stored and validated, including each action's date, time, and geolocation. It aims to help prevent non-organic products from being mislabeled as organic and pesticide-free, allowing for more remarkable food transparency.
AgriClear is a mobile-based solution that facilitates the tracking of excellent agricultural habits and practices from farm to finger. It employs distributed ledger technology (DLT) to transform Nepal's current farming processes by using blockchain technology to maintain agro-supply channels in the network. Customers can scan labels with their smartphones to get detailed supply chain information such as the agro-inputs used, harvesting dates, and origins. Meanwhile, AgriClear's tracking of good agricultural practices will aid in the creation of a unique identity for farm products.
Benefits of traceability and transparency in the Food Supply Chain
In recent years, the authenticity and quality traceability of products and activities in the agriculture supply chain has become necessary for agribusiness. Transparency and traceability in the Food Supply Chain create trust among all stakeholders, including farmers, suppliers, and consumers, defining and differentiating product quality. As all the information is tracked and recorded with blockchain, it's easier to access the data and know the products' quality and safety. Farmers, consumers, and other parties can benefit from it.
For Farmers
Farmers can differentiate themselves from their competitors by exhibiting the production history of agro-products like soil, seeds, and fertilizers they have used, which helps them acquire consumer trust. Similarly, farmers can anticipate their production for the coming years by keeping a record of every product delivered to distributors and suppliers, which will ultimately help them to reduce product waste in the near future. They can also get easy access to finance based on the data recorded in the system; they can request a loan based on all the crop activities and cash flow in prior years. Likewise, every activity recorded in blockchain technology is immutable, allowing for easy product monitoring. Further, it can also be used to track those accountable for the product's poor quality.
For Consumers
Consumers want to learn and get informed about the complete food supply chain to ensure the quality and safety of their foods. Blockchain can be a solution for them, as all information about nutrition, quality, and security is recorded, providing them with value for their money.
For the third parties
Third parties such as financial institutions, regulators, non-governmental organizations, and researchers can use disaggregated data generated by tracking the agro supply chain to make data-driven decisions.
Challenges adopting digital supply chain tracking system in Nepal
Every industry has its own set of challenges to overcome. Bringing even a small change in individual behavior requires a huge amount of dedication. Similarly, AgriClear is one of the only mobile-based systems that helps to track good agricultural habits & practices from the point of production to the final consumer. It confronts several challenges as many users, such as farmers, agro traders, distributors, and other interested parties, are unfamiliar with the new technology. And thus priority should be given to develop and implement a strong change management strategy to eliminate these challenges. This should include conducting regular training, workshops, seminars, and awareness campaigns for using the app. Likewise, farmers and other stakeholders should be informed about the necessity and benefits of tracking the supply chain.
Furthermore, in the context of Nepal, many farmers may not have access to or understand how to use smartphones. As a result, training on how to use smartphones more effectively can also be provided. Similarly, multiple awareness initiatives can be conducted at the local and the ministry level to train the farmers on the traceability of the food supply chain using technology. Through it, we can make farmers aware and also change their behavior at a certain level.
Future prospects
There are significant benefits of using blockchain technology to aid in creating a farmer's product brand identification. Suppose we successfully trace agricultural products throughout Nepal. In that case, we will be able to promote and sell Nepali farm products on the global market in the future, based on their safety and quality. Agriculture employs 70% of the population and generates up to 24% of the country's GDP. Along with that, the use of digital technology in the agriculture sector will contribute tremendously to the economy's growth.
Similarly, the government and other organizations involved in agriculture should collaborate and create an environment by enacting provisions and regulations like providing subsidized inputs, easy access to loans etc. in favor of all the farmers who track their supply chain.