Enhancing Agricultural Supply Chain

A supply chain encompasses the processes of designing, engineering, producing, and distributing goods and services from suppliers to customers. Traditionally, supply chains are managed by centralized systems like enterprise resource planning (ERP) systems. However, these systems are vulnerable to errors, hacking, and corruption. Blockchain technology, a decentralized and innovative solution, offers a more effective approach. As a digital ledger, blockchain records transactions chronologically, creating permanent and anti-monopoly records.

Globalization and intense competition have lengthened and complexified food supply chains, leading to challenges like traceability, safety, quality, trust, and inefficiency. These issues pose risks to society, the economy, and human health. Smart agriculture, which leverages technologies like IoT, big data, AI, and cloud computing, offers solutions. Blockchain technology, a key component of smart agriculture, enables real-time tracking of goods and individuals throughout the supply chain. This transparency empowers all supply chain operators to monitor activities and ensure accountability. Blockchain's distributed nature promotes transparency and traceability of goods and services, requiring accurate data collection and secure storage for reliable tracking.

The relationship between agriculture and food supply chains is symbiotic, as agricultural goods frequently become components in complex supply chains that ultimately reach consumers. Global "Blockchain in Supply Chain Management Market" reached a valuation of USD 93 Billion in 2023, with projections to achieve USD 196.77 Billion by 2031, a compound annual growth rate (CAGR) of 11.3% from 2024 to 2031

Blockchain technology enables the immutable recording of critical information about the farming, production, and transportation of agri-commodities. By associating this data with digital assets, it can be securely transferred between supply chain participants. The ability to trace commodities and create data-rich digital assets addresses the growing challenges of food fraud and security in global agri-supply chains.

The agricultural sector's supply chain is notoriously complex and opaque, with shipments frequently changing hands before reaching their final destination. Farmers often have limited visibility into where, how much, and at what price their products are ultimately sold. Blockchain-based food supply chains enable various stakeholders to access information about food quality at every stage. By increasing transparency, blockchain facilitates the identification of contamination points in the food supply chain.

Agricultural supply chain transactions are inherently risky and complex, often involving numerous intermediaries. Consumers increasingly demand transparency about the origin and production of their food. The agri-food and technology industries are exploring blockchain-based solutions. IBM and Walmart successfully used blockchain to trace a package of mangoes from the retail shelf to the farm in seconds.

Blockchain-based platforms enable supply chain participants to report emerging issues in real time. In the event of a foodborne disease outbreak, retailers can quickly trace the source of contaminated food. This facilitates rapid recalls, protecting the health and lives of consumers.

The lack of information leaves farmers vulnerable to traders who can dictate prices and quantities. Blockchain technology can address this imbalance by recording transactions in real time and providing up-to-date supply and demand data. This empowers farmers to set their own prices and optimize product quantities.

Blockchain technology's transparency, security, and decentralization enable the tracking of food quality information throughout the supply chain. This helps prevent food fraud and reduces the costs of supply chain management. All parties, including producers, consumers, and government regulators, can benefit from these advantages.