Here’s how blockchain can solve major problems plaguing India’s most populated sector: agriculture.
The relationship between India and farming dates back to the era of the Indus Valley Civilization, with agriculture being the main occupation of the populace. A 2019 survey shows that more than 43% of the Indian workforce is employed in the agriculture sector. Despite India’s impressive performance on the world stage as one of the leading countries in agricultural output, the ground reality presents a gloomy situation. The Indian agriculture sector lacks modern technology and machinery compared to other major agriculture-focused countries owing to which Indian farmers have to resort to manual labour, and dated tools and equipment. Unfortunately, this is not the only problem pestering the farming industry. The reality involves nightmarish issues right from debt traps to high suicide rates among farmers — fundamental issues that the country has been witnessing for more than a decade.
While in the previous posts we have discussed blockchain’s effectiveness in liberating the more financially attractive sectors like banking, insurance, telecom, and real estate, blockchain offers valuable solutions to the more traditional agriculture sector as well. But to better understand the situation, we need to acquaint ourselves with issues infesting the Indian agriculture scene.
Indian farmers have long endured key challenges, most of these rising from money scarcity. While a lack of required capital and uncertainty about weather conditions will always be present, many deep-rooted problems have infested the Indian agriculture sector:
- Getting high-quality seeds and crop products like fertilizers, insecticides, and pesticides. The exorbitant prices of these, coupled with the presence of substandard substitutes in the market, not only burns a hole in the farmer’s pocket but also affects the quality crops.
- The hostile nature of local government officials and the huge administrative distance between government bodies and the farmers results in their grievances being unheard and leads to the schemes and financial aid programs by the government not fulfilling their full potential.
- The presence of an unregulated loan sector is a major issue affecting the life of farmers, making it easier for them to fall into debt traps.
- The lack of proper food-storage facilities in India is a major problem for both the farmers and the government.
- The low price of crops offered by intermediaries in the absence of contact between distributors and farmers forces the latter to sell the produce at meager rates, which are then resold with jacked up prices.
The Indian government has made a commendable effort to form regulatory bodies, welfare departments for agriculture, and introduced schemes and financial packages to offer economic relief and mitigate the problems faced by Indian farmers and their families. However, most of India’s farmers still barely scrape by, indicating that a deep and resounding impact has not been achieved yet. Although the naysayers might question the legitimacy of blockchain in offering efficient routes, its ability in establishing a country-wide portal for the farmers is undeniable. This comes up in the wake of unfortunate circumstances where an estimation of the number of farming families in India is ambiguous.
Now, apart from a unified country-wide network let us look at some notable ways how blockchain can help Indian farmers:
Closely-knit agriculture community:
A closely-knit agricultural community, along with the government and other agriculture-focused bodies, will help farmers in expressing their grievances directly to the people who matter and getting faster aid in the wake of any untoward happening. Other farmers from the same nearby villages can also help fellow farmers, either during emergencies, or when some extra hands are needed in the fields. This will empower farmers to become independent, instead of surviving at the mercy of local government officers and intermediaries.
Easy capital procurement:
Farmers in rural areas still rely heavily on unregulated loan sources and face expensive interest rates. The blockchain, via a nationwide network, will connect farmers to the mainstream lending sector where they can get quick loans at reasonable rates of interest from regulated bodies. The presence of cryptocurrencies could play a significant role here.
Smart Contracts and cryptocurrencies:
Smart contracts will ensure quick and timely payments to farmers once their produce is sold. The farmers can also make payments for their own purchases via smart contracts. Using blockchains and smart contracts, payments will be secure, transparent, and provide a historical record that is impossible to tamper with. The role played by cryptocurrencies is paramount here.
Bridging the gap between farmers and distributors:
Unavailability of food-storage space and lack of capital for transport forces small landholders to sell their produce at meagre prices to intermediaries. A blockchain network between farmers and distributors will not only ensure transparent pricing for the produce but also help farmers in notifying distributors about the status of their crops.
Food Supply Chain:
With the help of blockchains, not just the distributor, the consumer can also track the source of the farmed products they are consuming. This increases the transparency in the food supply chain which has long worked in the dark and helps in maintaining an effective supply of high-quality produce.
Connecting farmers to crop enhancement product suppliers:
The lack of awareness about the quality of pesticides, insecticides, and fertilizers results in farmers buying substandard products that heavily affect both the quality and quantity of produce. Farmers, via blockchain networks, can easily connect to certified companies and procure high-quality materials that will enhance the yield of their crops.
Although the benefits of a blockchain propelled agriculture sector looks alluring, there is a long road ahead. Let’s look at a few key challenges that need tackling to successfully bring the blockchain revolution to the Indian agriculture sector:
With this being established, the disruptive power of blockchain technology in enhancing the agriculture sector in India remains undeniable. Plus, the blockchain implementation model in the agriculture sector can be replicated in elevating other allied sectors like animal husbandry, fisheries, and forestry, that need some much needed modernization. With the agriculture sector amounting to nearly 18% of the country’s GDP, it needs another round of the historic Green Revolution. This time with mass adoption of technological advancements like IoT, AI, machine learning, and other developments led by blockchain technology. The country has long regarded its farming population with respect and the historic slogan of ‘Jai Jawan! Jai Kisan!’ (Victory to Soldiers! Victory to Farmers!), rightfully honours the contribution of Indian farmers towards the development of the country. Now it is time to take forward the upliftment of the farming population to the next level, by empowering farmers through cutting-edge modern-day technologies.