by Fauzan Anandika
Blockchain is a hyper ledger that record all the transaction that happens with a decentralized database. Every network member keeps those records and could trace every transaction that happens in a blockchain network. The transaction is not all about money transactions but also digital data transfer between network members.
This ecosystem will record the farming process, farm inventory, and contact information. This process could become very expensive to collect the data source. Blockchain technology could trace farm products to create a reliable supply chain that could ensure food availability in a nation or restaurant inventory. A reliable supply chain could build trust in every supplier and buyer in the network. This technology is a way to store every agricultural data. And facilitate business owners to make the farming process smarter with their comprehensive data analysis.
Each user in the blockchain system alternately recording information about process, income, transaction, and product consumption. This ledger has managed the transactions on a peer-to-peer basis where every member participates in build the record. With a comprehensive source, the agricultural industry could accurately decide its strategy in selling and producing. Every newly updated data need to confirm with the previous data to give protection to the system.
Blockchain Potential for Agricultural Industries.
There are too many intermediaries between the farmer and the end consumer in the agriculture ecosystem. The intermediaries factor makes a deep price gap between farmer and consumer. Making the farmers only get a small part of the selling price while the customer feels the product is too expensive. The intermediary function could be removed by using blockchain technology. Farm products will have a more affordable price, both for the farmer and the customer.
With its traceable feature, blockchain technology could prevent fraudulent activity in the network. It also prevents hoarding on a certain product that could raise the product price and give an illegal profit to a speculate person.
Blockchain technology also allows the farmer to develop a data-based facility for the business and become more invulnerable by using insurance. The investors or insurance will get a better point of view on what happening in the agricultural business. There is at least two way to implementing blockchain in agriculture industries as described below.
Plant are living being that vulnerable to climate changing, dry season, pests, and other infections. A farmer could buy insurance to give protection that ensures their income if something bad happens to their farm. Insurance could create a scheme to manage the farmer’s risk.
Blockchain contributes to increasing insurance index by performing on time and automated payment schedule base on climate information that could trigger payment to the farmer. The information on the plant growth, weather, and other information are collected automatically and integrated to calculate the risk base to make an efficient payment.
Data and information about the natural resource conditions become based in the agriculture system. While the main problem in build a smart agriculture system is how to develop a comprehensive security system that facilitates data usage and managing. Using a traditional way that is centralized is vulnerable to inaccuracy, distortion, and fraudulence.
By using a decentralized app, every piece of information will be more accurate. The reason is every user could get access to view the entire system. With this method, updated information is shared faster inside the network.
Implementing blockchain becomes a hope to increase farmer welfare while controlling product price at the customer level.