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September 28, 2017

Agriculture + Blockchain = AgriChain

 

The agricultural industry is the one of the most critical industry in the world. It employs 1.3 billion people accounting for more than 50% of the population of more than 50 countries and 40% of the global workforce. Larger percentage of the population are involved in agriculture in developing countries whereas only 4.2% of the population is engaged in agriculture in developed countries.

Although critical, the agricultural supply chain is an inefficient one. It is characterized by an opaque and non-coordinated network consisting of many stakeholders. Regulatory pressures, food shortage and contamination increases the need for greater supply chain transparency.

The agricultural industry is the one of the most critical industry in the world. It employs 1.3 billion people accounting for more than 50% of the population of more than 50 countries and 40% of the global workforce. Larger percentage of the population are involved in agriculture in developing countries whereas only 4.2% of the population is engaged in agriculture in developed countries.

Although critical, the agricultural supply chain is an inefficient one. It is characterized by an opaque and non-coordinated network consisting of many stakeholders. Regulatory pressures, food shortage and contamination increases the need for greater supply chain transparency.

Consumers today are more conscious and specific of what they eat. But authenticated data regarding the available food is rare and easily manipulated. The need for transparency in the food supply chain is an ever growing demand that has been left unaddressed for a long time.

In 2015, one of the world's largest food and beverage company had to withdraw 38,000 tonnes of noodles from the market due to the presence of certain elements in the product. The brand value of the iconic brand took a beating while its market share reduced from 80% to 57%. The company had spent $70 million on one of the largest food recalls in history, lost brand value estimated at $200 million while missing sales of at least $277 million.

A blockchain network monitoring the processing of food and recording test results would have provided the company's management real time updates enabling them to take corrective action before the products entered the market.

Benefits of Blockchain

Counterfeits: Blockchain enables consumers to verify the authenticity of food and prevent counterfeits from entering the value chain by tracing the food back to its origin. By tracking food through the supply chain and recording every stage of its journey blockchain allows consumers to trace its provenance.

Quality Information: Smart farms enabled with blockchain and IOT can monitor and gather data regarding the farming practices used to cultivate the crops. This provides tamperproof data to consumers enabling them to choose their food based on its quality, origin, storage conditions and processing.

Regulatory authorities can also use the information to authorize products to enter the market.

Product Recall: The use of blockchain to track crops through the supply chain enables organizations to trace the contents of food products and recall only non-compliant units rather than recall all units which results in heavy losses.

Conclusion

Blockchain stands to revolutionize the agricultural supply chain by bringing transparency and trust to the industry while streamlining operations. All stakeholders including farmers, traders, financiers and consumers would benefit from a blockchain based supply chain creating price transparency, eliminating counterfeits and providing real time authenticated data regarding quality, origin, etc. to consumers, regulators and agricultural companies.

Whether it is fresh farm produce or processed food, consumers are always assured of the quality of the food and its claims using authenticated data on the blockchain. The same data enables agricultural companies to protect their market share and brand value while creating a better value for the farmer.

Source:

http://www.momagri.org/UK/agriculture-s-key-figures/With-close-to-40-%25-of-the-global-workforce-agriculture-is-the-world-s-largest-provider-of-jobs-_1066.html

http://www.livemint.com/Companies/xyFCHn7hGJm1zUkesEVy5L/How-Nestle-is-rebuilding-in-India18-months-after-the-Maggi.html

http://www.livemint.com/Companies/1JKHsutTXLWtTcVwdIDg0H/The-Maggi-ban-How-Indias-favourite-twominute-noodles-lost.html

http://fortune.com/nestle-maggi-noodle-crisis/

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