Finboot, a company producing blockchain applications for supply chains, takes a look at how the technology can help the farming industry feed a growing global population
Agriculture is one of the last sectors globally to embrace digital technology but there was a growing focus on technology accelerated by Covid-19.
The pandemic has shone a light on visibility and traceability issues in agricultural supply chains which could be significantly enhanced by technology solutions.
Blockchain could help support regenerative farming as well as helping to make the industry more sustainable.
There is a broad spectrum of technologies that will help to shape the agriculture industry of the future, and we believe blockchain will be a key player, as it has such a wide range of applications, including food management, quality, waste reduction and food fraud.
Food safety is a big challenge with lack of transparency across the supply chains potentially leading to costly mistakes which are potentially more harmful than in other industries due to the potential health risks associated with poor food quality – especially if these risks arise from biosecurity issues.
By using blockchain, companies can also have an accurate, real-time view of stock, insight as to whether it is in transit or at its final destination and manage supplier and customer needs more effectively and efficiently.
A lack of visibility in the supply chain also exposes the industry to the risk of food fraud, which, according to the FAO costs the agriculture industry more than $10 billion (£7.56bn) a year.
Food waste was also a concern, with 33 per cent of food wasted the majority in production, transport and storage.
The data presented in the blockchain network would be highly valuable with traceability and transparency enabling quick identification of errors, fraud or malfunctions, linking them back to their specific sources across the supply chain to ultimately improve food quality and safety.
Recording every step in the value chain could also help estimate the required amount of stock, helping reduce waste.
With agriculture one of the sectors most susceptible to environmental threats, government’s have subsidised agricultural businesses but the subsidy system can be complex, opaque and difficult to manage.
An agricultural insurance system could be built on blockchain where key weather incidents and related payouts are drafted on smart contracts linked to mobile wallets. The weather data could be provided regularly by sensors in the field and correlated by data from nearby weather stations and, in the case of a drought or flooding in the field, immediate pay-outs would be made to farmers.
Food payments and cross-border trade payments involve fees and delays and rely on intermediaries which means small transactions are hampered by slow, expensive, and insecure payment systems.
Smart contracts in blockchain could support peer-to-peer transactions in a transparent and secure environment in which members can set up permissions and obligations around specific transactions, removing the need for middlemen or other type of intermediaries.
Blockchain features prove useful in monitoring and controlling costs and contracts, which in turn facilitates invoice reconciliation, ultimately improving payment processing, reducing transactional costs and fostering trust among stakeholders.
A partnership between Spanish agtech group Fidesterra and Finboot has helped optimise agricultural processes. Fidesterra’s management platform combines remote sensing tools with data analytics, satellite imagery, artificial intelligence, machine learning and internet of things devices to provide farmers with detailed and accurate data to monitor crops.
Fidesterra has recently integrated Finboot’s blockchain middleware MARCO into this platform in order to securely record all of the agricultural data that is gathered from these technologies, such as the temperature of soil, water levels and use of fertilisers.
This enables farmers to closely monitor growing conditions and therefore identify the most lucrative time to plant and harvest crops.
In addition, blockchain has the unique capability of being able to record every step in the agricultural product’s supply chain to provide full traceability and transparency.