Memorial Proposal: Blockchain in Agriculture: Steering towards a Technological Transformation
Henry Duckworth: Co-Founder and CEO of AgriX.*
In the 1920s, Soviet authorities took advantage of the growth in cotton farming in Asia: Cotton was referred to as "white gold," and large areas of land were watered for cotton production. The issue was, they used outdated farming methods, leading to excessive water waste that caused severe environmental damage.
The land became arid, and the Aral Sea—the central oasis of the Asian steppes—disappeared due to evaporation. This was a major environmental calamity and serves as a reminder of short-sightedness. The same scenario has repeated itself throughout history, with lessons learned being quickly forgotten. Today, it seems we are on the verge of making the same mistakes again.
Feeding the planet's 8 billion inhabitants necessitates an expansion of small-scale farming. Around 35% of the world's food is produced on small farms, averaging less than 2 hectares, primarily in developing countries. However, small farmers operate on tight budgets and cannot afford to invest in modern farming techniques or technology. In turn, the modern agricultural system often encourages the expansion of inefficient farming practices, leading to deforestation and increased global warming.
The agricultural market is also inefficient. Farmers sell their produce to a centralized market, with crops passing through numerous jurisdictions, each with their unique languages, currencies, legal systems, food quality standards, and tax regulations. At every stage, from farm to table, there's an intermediary who takes a cut of the profits. Consequently, the average farmer only earns 0.03% of the profit on their crop yields. This not only removes farmers' autonomy but also forces them into subsistence farming.
Farmers are not against affordable practices; rather, they cannot afford them.
The obstacles faced by small farmers are the same obstacles that hinder policymakers from implementing sustainable farming practices. Ottmar Edenhofer, chair of the European Scientific Advisory Board on Climate Change, has stated that implementing carbon taxes on agriculture would be "almost impossible" to achieve EU's climate targets. However, politicians had to abandon this strategy last year due to protests from European farmers, who are already receiving subsidies and cannot afford additional emission-related charges.
Regardless of their desire to invest in sustainable practices or protect the ecosystems they inhabit, they cannot afford it. The situation is far worse in many developing countries. Any plan to decarbonize agriculture must take this reality into account.
Blockchain could be at the heart of the next agricultural revolution.
Outdated, paper-based processes have been updated by the internet, improving efficiency but still being mainly centralized. Now, I think we are witnessing a similar revolution with the rise of blockchain technology and AI. Blockchain has streamlined processes by replacing manual record-keeping with secure, transparent, and decentralized digital transactions.
As the co-founder and CEO of a real-world assets (RWA) marketplace, I believe that blockchain technology can help address some of the major problems plaguing the industry—especially for producers and suppliers—because it offers two significant advantages: efficiency and transparency.
Transactions on the blockchain settle almost instantly with minimal fees, allowing farmers to sell directly to buyers in a decentralized market, bypassing additional charges. Moreover, all transactions are permanently recorded on the blockchain, making fraud less likely and harder to hide. Lastly, blockchain gives farmers access to working capital in a stable international currency, rather than a volatile local one.
Everything boils down to one simple fact: more money for farmers.
A decentralized, blockchain-based market gives farmers independence and autonomy while providing them with much-needed capital to improve their farms and land. Higher profit margins for small-scale farmers could have transformative effects.
Beyond commodities, blockchain technology could facilitate other kinds of transactions for farmers, such as the sale of farmland in Zambia or the purchase of bakery equipment in South Africa for Zimbabwe.
How can farmers begin using blockchain technology?
Blockchain technology can help improve transparency, streamline operations, and open up new markets for farmers. To start, farmers should first understand how blockchain can positively impact their specific farming practices. For instance, it can be used to track the journey of crops from field to table, ensuring traceability and fostering trust with buyers. Farmers should analyze their current challenges, such as record-keeping, price volatility, or access to financing, to identify where blockchain can provide solutions.
As an initial step, farmers can explore blockchain-specific platforms designed for agriculture that enables direct connections with buyers and secure payment systems. The initial investment in blockchain technology is relatively low for small-scale farmers. Essentially, a smartphone and an internet connection are usually the only hardware requirements to access blockchain platforms.
Many platforms offer free tiers or low-cost entry levels. I recommend farmers look for platforms with low fees and robust support systems. Additonally, they can consider partnering with agricultural organizations or cooperatives that can offer technical assistance and share knowledge.
To overcome potential challenges, farmers should focus on platforms that are designed to operate in low-bandwidth environments or offer offline capabilities. Education and training are crucial for farmers, who can benefit from workshops or online resources provided by blockchain platform providers.
By starting small and gradually integrating blockchain into their operations, farmers can avoid common pitfalls and gradually embrace blockchain technology.
This is merely the tip of the iceberg.
There is no doubt in my mind that numerous other potential applications await discovery. Moreover, this is ignoring the promising developments in AI, quantum, and other advanced technologies on the horizon.
Blockchain's inherent efficiency might reduce expenses and boost profit margins throughout, making the system more accountable due to its transparency. This could empower farmers to regain their autonomy and equip them with the necessary resources to combat climate change. In a nutshell, the transformative impact of blockchain technology could potentially make agriculture sustainable for good.
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In the context of the text, Henry Duckworth could potentially be mentioned in a sentence discussing the leadership roles in agricultural technology companies. For instance:
- Henrique Dias, the co-founder and CEO of FarmTech Innovations, and Henry Duckworth, the co-founder and CEO of AgriX, are pioneers in the use of blockchain technology to revolutionize agriculture.
In another context, Henry Duckworth could be mentioned in a discussion about the challenges faced by small farmers:
- Small-scale farmers like Henry Duckworth in developing countries struggle to afford modern farming techniques, reducing their competitiveness in the global market.
