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Blockchain in Agriculture

Before jumping into “How Blockchain can revolutionize the Agricultural industry?”, let’s deep dive into what’s the need to integrate blockchain into agriculture.

Indian Agriculture sector — Facts

1. Indian agri. Industry contributes to 13.7% to GDP

2. India accounts for 7.68 percent of total global agricultural output

3. Provides food to 1.25 Billion people, which is estimated to reach 1.35 Billion in 2018.

4. Sustains 60% of the population

5. Seventh largest agricultural food exporter worldwide

6. Currently more than 52% of India’s population is involved in agriculture, yet it contributes just 13.7% to GDP.

7. In the past two decades 3 lakh people committed suicide and every day nearly 2000 people are leaving agriculture.

The status of Indian Farmers

The farmers, who were once regarded as the very heart and soul of the economy are now struggling all over the world to sell their produce at a decent cost. They work day and night to cultivate good crops, but most often they sleep with empty stomach. They have a handful of income and a bagful of debts.

Main reasons for Farmer’s financial distress

The agriculture industry is characterized by financial instability because of different types of risks involved in market, production, and prices. Following are the main reasons:

Unfavourable climatic conditions

· Erratic weather

· Inadequate and poorly distributed rainfall

· Lack of availability of irrigation water

· Frequent crop failures

Decreasing size of land holding

· Division of land holdings

· Though we have 140 million hectares of agriculture land,more than 80% is marginal and small holdings and around 60% of lands are prone to natural disasters like — drought, flood, etc.

· Less area means less income

Unsatisfactory realization of prices

· Inability of most farmers to sell their produce in regular market at decent price

· Middleman enjoys profit, and farmers get less price

· Lack of transparency in supply chain

Inadequate storage facility

· Upto 30–40% of agricultural produce is damaged due to lack of cold storage facilities

· Results in inability to sell agricultural produce at a reasonable price in the market.


· Indebtedness is the main reason behind the suicide of 90% of farmers in India.

· 60% of farmers don’t have access to credit system, which increases dependency on money lenders

· Private money lenders charge high interest rates between 40–60% p.a.

· Higher rate of interest in the cooperative credit system

· Inability to repay loans

Reasons for Indebtedness

· Increasing costs of agriculture inputs

· Reduced price of agriculture produce

· Repeated crop failures

· Lack of access to credit system

· Increasing dependence on money lenders at high rate of interest

· Withdrawal of government support

Below is some statistical data to show the financial crisis of farmers:

While the high levels of household debts have been considered as a significant cause of farmers’ distress, the use of certain unconditional debt relief to improve crop productivity, living conditions, and to reduce suicides is controversial. About 52% of India’s 90 million agri. households are indebted.

The debt relief programs fails to provide proper assistance to small farmers those who depends on money lenders and the farmers who is landless and don’t have access to bank loans.

What is needed?

1. Better credit facilities

2. Better quality and cheaper inputs required for crops

3. Useful weather information to farmers timely to plan their crops

4. Eliminate middlemen by linking farmers directly to consumers/retailers

5. Improve farming profitability to ensure the financial stability of farmers

The farmer needs a transparent, trusted and Reliable source of information which can connect them directly to the market, banks & consumers and eliminates middlemen who do profiteering at the cost of farmers due to lack of transparency in the process.

So, the question pops up How can we solve this multitude of problems via Blockchain Technology?

It’s likely that whenever you hear or read “blockchain”, you will automatically think about cryptocurrencies. Indeed, cryptocurrency has been the most common use of blockchain technology. But, blockchain has a lot more to offer than just virtual currency. It has the potential to transform a myriad of industries — from manufacturing industries to agriculture — It’s enormous.

What is Blockchain and how it works?

The blockchain is based on a shared ledger or DLT (Distributed Ledger Technology). In more simple words — it is “one big ledger in the cloud.”

This ledger contains records, transaction details and information called blocks. These blocks are immutable and tamper-proof, i.e. the data in these blocks are hard to alter or hack. These blocks hold incorruptible trust. Anyone can put anything of value on blockchain from golds to tomatoes.

All these features make it possible for the various network (like farmers, consumers, retailers) to register and share information with maximum safety, transparency and speed. The data entered is visible to all of the elements in the blockchain. One has the freedom to approve or reject the information. Once the data is validated, it gets recorded into blocks, which gets organised in a chronological chain which cannot be altered by anyone.

With blockchain technology, we can put all the information about the entire cycle of agricultural events onto blockchain to enable transparent and trusted source of information for the farmers.

Farmers can get instant data related to the seed quality, soil moisture, climate & environment related data, payments, demand and sale price, etc. all at one platform.

Blockchain will help in establishing direct link between farmers and consumers/retailers. It will empowers small farmers to organize themselves and get together to reach the market without taking any help from middlemen.

This will reduce the problems of low income, as blockchain will give transparency in supply chain, enabling farmers to get the real price for their produce.


In Blockchain the information is highly secure and tamperproof. With Blockchain, we can expect an efficient supply of products, fair pricing, efficient supply and improved product tracking. It will also enable farmers to do real-time management of the stock.

All the information starting from seed procurement to harvest to sale at POS system can be recorded on the blockchain. This will greatly help producers and consumers in quantifying, monitoring, and controlling the risks throughout the agriculture process. This could assist in alleviating rural distress in developing countries like India.

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