Blockchain Fascinates the Agriculture and Food Supply Chain

Posted in Agriculture by Adolf on Jul 24,2021 2823

Simply put, Blockchain is an organized way of storing information that can be difficult to hack, modify or lead to any fraudulent activities in the system. Ever since its invention in 2008, blockchain has served as the public transaction ledger to the crypto currency – Bitcoin. Besides the financial industry, it has also attracted and transformed many important fields of healthcare, music, politics and insurance. Experts believe that this advanced electronic system can be applied by the global governments for weapon or vehicle registrations, voting systems and even to confirm the ownership of invaluable items.

Although it may seem complicated, its key concept is quite simple. The Blockchain contains blocks of information or transactions. Once finished, it connects with the initial completed block forming a blockchain. Each time one block is completed, a new one is generated. With countless numbers of such blocks in the blockchain that are connected to each other, it has complete information about different block users right from the original to the most recently completed block.

When any information is added in the network, it is updated to all computers in the network. In case of editing any information in the block, we have to enable the editing option from all computers in the network. Every computer in the network has access to this shared record and uses special software to participate in the process. It makes the blockchain a public ledger that cannot be easily tampered with, giving it a built-in layer of protection. 

We have now understood what a blockchain stands for and how important it is, but what purpose does it have in the agriculture and food supply chain market?

How is Blockchain benefitting the agriculture and food supply chain market?

Blockchain technology is revolutionizing the food and agriculture sectors by enhancing the decision-making capabilities of organizations. It finds several potential applications in these sectors, some of which have already been explored. The major applications of blockchain technology in food and agriculture include product traceability, tracking and visibility, payment and settlement, smart contract, governance, risk, and compliance management. The blockchain market is expected to grow, owing to an increase in the demand for supply chain transparency. The major driver of the blockchain market is the growing number of food fraud cases. The growth rate of small and medium-sized enterprises is higher, as several start-ups are investing in this market across the globe and understanding the benefits this technology offers.

The global blockchain in agriculture and food supply chain market size is estimated to be US$ 133 million in 2020 and is projected to reach US$ 948 million by 2025, at a CAGR of 48.1% during the forecast period. Using blockchain technology, companies can claim and authenticate their products by providing the end customers with the knowledge about the product's complete journey—from origin to the shelf. Also, the significance of these applications grew tremendously by the spread of the COVID 19 pandemic. The blockchain market is estimated only to see a rise in the post-pandemic world, as transparency and traceability of the food value chain are observing a growing need in the global food industry.

Application and solution providers are third-party entities that distribute and manage blockchain solutions for customers across the agriculture and food industry. These vendors provide blockchain technologies that are more likely to deliver high business value to companies by reducing transactional data duplication and providing periodic reconciliation and authentication for commercial and regulatory needs.

Large organizations have sufficient revenues and funds to invest in new technologies; therefore, industry giants such as Walmart (US), Bumble Bees (US), Nestle (Switzerland), and JD.com (China) are adopting blockchain technology on a pilot basis leading to the dominance of this segment. The agriculture and food market includes leading companies such as IBM, Microsoft, SAP SE, ACR-NET, TE-Foods International GmbH, Ambrosus, OriginTrail, Provenance, Coin 22, VeChain, AgriChain, Agri 10x, Genuino, amongst others that provide exquisite blockchain technology platforms.

Blockchain technology has a lot of exciting potential. Since it works 24 hours a day and seven days a week, it means the transaction process is quicker. It also allows us to execute transactions without the need for a third party. As the intermediary is absent, it helps us to get rid of the additional cost. Moreover transparent transactions, full accounting of data are some of the first steps towards an enhanced digital and sustainable world. With the blockchain’s first execution, it seems we’re just seeing the start of adoption for this new idea in various fields.

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