Leveraging Blockchain technology for Agriculture Value chain

Using Blockchain technology for building agri value chains ... some basics for beginners
#Blockchain #AgrivalueChain #FPOs #transparency #traceability #history #Technology

1. Can Blockchain technology help improve Agri value chain ? Dr B S Suran, Former CGM, NABARD

2. Presentation Blockchain ? The agri sector – the key facts ! Agri value chain – what and why ? What has been addressed – partly ! What blockchain could do ? Use cases … . Experiences from the field !

3. 1. Blockchain What it is ? Blockchain: is a public distributed ledger – in which transactions are recorded in a chronological manner. “A data network” What are the uniqueness ? It is cryptographically secure Transaction details are stored in containers- called blocks It is immutable Runs on a decentralised system – no admin needed Runs on consensus algorithms Blockchain is not to be confused with “ Bitcoin ” which is the first decentralized digital currency that allows users to transfer money from peer to peer without an intermediary ( bank/ govt ) using blockchain technology . Bitcoins – used for purchases, investments and payments etc - advantages being – fast p2p, inability to counterfeit, decentralized, low fee, access to public) Background Bitcoin network – came into existence in 2009 – Satoshi Nakamoto ( basically for digital currency – works on POW consensus algorithm)+ slower 2014 Ethereum blockchain ( general purpose blockchain) was announced by Vitalik Buterin ( works on POW to proof of stake) + faster. 94% cases Dapps ( applications built on the top of decentralised networks ethrereum ) Multiple channels private channels can be made Smart contracts can be made – even on digital assets Bitcoin mining is the process of verifying Bitcoin transactions and recording them into the public ledger. Blocks are kept secure using a hash function ( SHA 256) – cryptographically. Distributed ledger + SHA 256 + Proof of Work Blockchain mining is a process to validate transactions by solving a difficult mathematical puzzle called proof of work Use cases Govt services : welfare distribution – zero erosion , digital identities Digital land records- land registry, security , identification , system integration – free of fraud Health services – fragmented health services , clinical decision making , ins fraud Seafood industry ( Ocean to table ), diamond tracing ( mine to retails) Agri value chain – traceability, health foods , organic , incomes Block: is the smallest unit in a blockchain. Has 4 parts ( previous hash, DATA, nonce, hash)

4. 2. Key facts about the sector 55 % of the population depends on agri and allied sector 16% of GDP : contribution to the economy Average land holding of our farms – 1.08 ha 120 million farmers are small and marginal farmers NSSO – 17 th Situation Assessment Survey shows a monthly income of Rs10,218 only Doubling farmer income – announced by the Govt in 2016 – 2022.

5. 2. Key facts about the sector

6. 3. AGRI VALUE CHAIN ( GENERIC ) – The what and why ? Pre Production Challenges -86% SF subsistence farming ,insignificant players Inputs at high retail cost & output with no MRP? Decision of what to grow ? / Market needs ? -Water availability Know how- technology - Weather disruptions Production challenges Quality seeds & availability ? Fertilizers availability ? Quality Pesticides ? Crop prodn /protection protocols Financial resources ? Labour availability ? Harvesting Post production challenges Loss of produce instorage – 20-30% losses Post production handling Storage Infra and transport Quality of produce ? Trust level of consumer – food safety concerns at client level Price fluctuations Payment terms Tracking & tracing absent Producer / farmer Local traders Commission agent Wholesaler/ processor Retailers/ local market Consumer

7. 4. Farmer Producer organisations (FPO) – addresses some challenges of AV chain ! Addresses some production related challenges Makes available some key agri inputs at reasonable rates for member farmers Ensures availability of crop protocols / technology support and peer learning opportunities FPOs (Some) provide agri infrastructure / mobility / storage support Makes producer a visible part in the agri value chain Better post harvest handling of the produce Collectivization of farm produce Shortens agri value chain FPOs ( some) provide field level sorting and grading Marketing of the farm produce Collective marketing , collective price bargains and better price realization Trust levels on agri produce ( food safety) marginally improves “Collectivization a necessary condition, but NOT a sufficient condition to increase farm incomes”

8. FPOs – some continuing challenges Dormancy in FPOs – different forms exist : leadership , institutional level, some members are dormant in FPOs etc - institutional support for marketing of produce is not available Limited market research and understanding of markets by FPOs. Inability to reach niche markets Many continue to be players in the traditional markets , many unable to connect with organised retailers – who normally provide higher prices for the produce. Low level of technology integration has been a challenge Leadership issues and challenges of regulatory compliances – submissions etc Lack of proper business plans / inability to pursue; and also Inadequacy of finance capital Farmers incomes have not changed substantively

9. 5. What blockchain / technology could do ? Improve the transparency / efficiency of the value chain- time taken , value adds done, margins received etc ( farmer – farm management; processors – warehouse monitoring: vendors – sales management; consumers – traceability) Enhance market access of farm products - Beyond traditional physical markets – specific products use specific markets ! ( organic food – 1.5 % of the food market , India has 7 lakh farmers & 1.2 million ha under this ) / fair trade food Enhance ability to reach niche markets – use e-commerce sites / D2C models With technology integration, Improve visibility of the products Improve transparency and traceability of the product / including organic foods / safe foods / export possibilities With technology can help improve trust level of the customers Help Enhance Farmer’s income

10. FPOs – some use cases for blockchain upgradation ? Case 1 Case 2 Produce Poultry Organic tea Age of FPO 3 years >3 years No of farmers 530 members Abt 500 members Social value Yes – small farmers Yes – Tribal s of bodo land, Assam Present Technology being used Website / use QR codes Website for e-commerce Concern Limited market penetration Only Few farmers (30) of the 500 farmers using the QR codes). Market reach is limited Limited markets, limited visibility, authenticity and tractability How blockchain can help ? Build trust with customers Market as healthy food – antibiotic free chicken Build Trust with customers Explore export market with acceptable traceability norms Benefit To consumers Quality assurance & trust Quality assurance & t rust Benefit To producers Increased income Increased income

11. Thanks for your time