How To Use Blockchain Technology To Help Farmers

Since the advent of agriculture, farmers have confronted unpredictable weather conditions. And there are times when their crops get destroyed because of natural calamities and they are left with no source of income.

This sometimes even lead to mass suicides by farmers in many developing countries. The only way for farmers to protect themselves from these unfavourable weather conditions and crop loss is through crop insurance. It can cushion their loss of the destroyed crops. There are multiple crop insurance policies for farmers that they can avail to cope with such difficult times.

But the biggest problem with these policies is the processing of insurance claims, which is a tedious and time consuming task. When the crops get destroyed and farmers are in dire need of the financial assistance, what they get is lengthy and tedious processes instead of their due coverage amount. The processing of insurance claims sometimes even takes years. The need of the hour is to help these farmers and make their life easier when they are going through such difficult times.

Other Use Case : Blockchain Application in Artificial Intelligence (AI)

Blockchain technology and smart contracts, can radically improve the whole insurance claim process and can make the whole experience seamless. In the event of a natural disaster when the crops get destroyed, the smart contract will be triggered and payouts for the victim farmers will be released automatically.

blockchain technology in helping farmers

Let us understand it through a scenario: A farmer bought a crop insurance in this new Blockchain powered System. Under this insurance policy, a smart contract gets agreed upon by the farmer and the insurance company. In the smart contract all the terms are clearly defined under which the farmer will be eligible for the claim amount. One of the terms is regarding the amount of the rainfall. If it rained more than X cm and that too for more than a week the farmer will be eligible for the insurance claim. During the rainy season, it rained heavily for more than 10 days and there were floods, which destroyed the crops of the farmer. The meteorological station released the rainfall data for that region which was above X cm. As the rainfall was above the predefined threshold limit, the smart contract gets triggered and an automatic payout to the victim farmer is initiated. Thus the farmer gets the required resources and the financial assistance without going through any hassle during such a bad time.

Infact Blockchain technology and IOT can even help farmers to take preventive measures before the natural calamities strike. Pre-installed IoT sensors can predict the unfavourable weather conditions like drought or heavy rainfall, and as soon as the pre-decided conditions of the smart contract are met, it gets executed and the preventive crop insurance payout is automatically released to the farmers. This in turn would help farmers to take precautions before the natural disaster strikes.

IoT technology in helping farmers

For example, in storing the harvested crops at appropriate places where these crops will not be affected by these natural calamities. Thus saving cost for the insurance company and avoiding damage to the farmer’s crops. IOT can also help farmers in improving the yield of their crops. IoT sensors can be installed on the fields that will monitor the crop growth, harvesting and crop yield on the blockchain. IoT sensors installed can also help farmers in providing real-time updates about the irrigation needs of the crops, seed quality, soil moisture, manure, fertilizer requirements and also about the diseased crops.

This information would become an invaluable resource for the farmer to maximize the crop yield. Another challenge faced by farmers is that they have to rely on the traders for selling their product who dictate order prices and quantities. This directly results in low farmer income as farmers do not receive their due share, even though they are the most important part of the chain being the food producers.

blockchain for agriculture

Blockchain will help in establishing a direct link between farmers and consumers/retailers. It will empower small farmers to organize themselves and get together to reach the market without taking any help from the middlemen. Today, the agricultural sector supply chain is notoriously complex and opaque, as the products change hands multiple times before reaching their final destination. It is difficult for farmers to know where and at what price their products are getting sold ultimately. This lack of information leaves them vulnerable, and at the mercy of traders who dictate order prices and quantities.

Through blockchain, farmers will get transparency in the supply chain, thus enabling them to get a fair share for their produce. In the current scenario, consumers are always skeptical while buying an organic food. There is no way to verify whether a product labeled as organic really organic. Blockchain would allow genuine organic food brands to stand out from the crowd. This is because the provenance of these products can be easily traced, giving consumers confidence that they are getting added value from a high quality product and it is worth paying for such a high quality product.

Further, in the current system, it often takes weeks for farmers to get paid for their goods. But through the implementation of blockchain and smart contracts, payments will be triggered automatically as soon as the buyer confirms the acceptance of the product. Secure and formal property rights are important for the economic development of humans worldwide. A lot of farmers worldwide lack access to land titling and land demarcation. Many farmers lack legal ownership of the land they live and work on. And this lack of secure land ownership is the biggest cause of poverty.

Land registries are typically dependent on paper documents, handwritten signatures and manual labour to register land titles. This land registry process is prone to frauds and corruption and the poor farmers have to suffer a lot because of this. Few fraudsters use violence and bribery to falsely claim the ownership of the lands of poor farmers. The land records gets corrupted because of which poor farmers get no land or less land and less land results in less income for them.

Blockchain technology will be able to address many of these shortcomings in traditional land registries as it provides an immutable method to register
land titles. Thus protecting the farmers from corruption and frauds. An immutable and transparent land record will also help farmers to resolve any land disputes that may arise in the future. For implementation of a Blockchain based land registry process, the geo-coordinates of the land will be uniquely coded and recorded into the blockchain. Each property would
also be linked to a smart key which would be held by the owner of that piece of land.

Further smart contracts, when combined with Blockchain, can be used to fasten the transfer of land entitlement and other related transactions. It will also empower farmers to get quick loans as they can easily prove their ownership of the land, which is generally kept as a collateral against the loan disbursed. Across the globe, the agriculture sector is largely dependent on government subsidies for irrigation, electricity, seeds, fertilizers etc. where farmers get these facilities at a lower rate.

For instance, in India 2017-2018 budget, a sum of approximately 4.9 billion USD was allocated for agriculture-related subsidies to farmers. But one question always remains unanswered how much of this amount actually reaches these intended beneficiaries? Through Blockchain, the distribution
and delivery of subsidies can become more transparent as each transaction on the blockchain is recorded in a transparent and immutable way. Further with the implementation of blockchain these subsidies can be targeted to the intended farmers.


Thus we can conclude that Blockchain along with smart contracts can really work for the upliftment and betterment of our farmers.

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