How blockchain and tokenization will reshape agricultural segment
It is deeply engraved in our mind that blockchain refers to financial technologies, currency, and governmental services. However, experts ensure that agriculture exposes a great potential for smart contracts and distributed registers. So, what does tokenization of agricultural segment hold? Read our review to find out!
Governmental services for farmers
Developing countries suffer the problem of corruption, which also touches upon the agricultural segment. Farmers can be made to give bribes in order to buy or rent land, receive a subsidy, or grants. According to entrepreneurs, otherwise, payment for taxes, fees, and notary services would cost the earth.
A switch of governmental services to blockchain would decrease service fees and help make all the processes transparent. The technology would also simplify the procedure of subsidy and documents obtaining: just stay home and use your computer or smartphone.
Farmers would particularly benefit from blockchain-based services for land sale and rent: land auctions, cadasters.
Blockchain-powered cadaster has been successfully introduced in Georgia. Many municipal services, including voting and an access to governmental services, based on the DLT are now being tested in Zug (Switzerland).
Transparent supply chains
Consumers want to be informed about the product’s origin, their further transporting, and processing. They tend to pay more for ‘non-GMO’, ‘no nitrates’, and ‘organic food’ marking.
Currently, the quality of animal source and plant-derived foods is confirmed by a certificate. Therefore, to trade meat, farmers firstly should pay for the expert examination and certification, then, send documents to the point of retailing sale.
With blockchain-based supply chains, matters are much simpler: all you need is to enter the data in the distributed register. In this case, the information will be available to all consumers and regulatory agencies. However, do not expect to file documents in hindsight.
A product should be marked with a QR code. By scanning the product, both buyer and civil servant will see all the information about it: from a cow’s pet passport to the name of the deliveryman and the date of stakes delivery. Of course, that wouldn’t cancel certification (since the quality of the prepared products needs to be certified) though less time and paper would be spent on paperwork.
Experts note that farmers aren’t the only one to benefit from blockchain-based supply chains: in case of an epidemic, sanitary authorities would be able to quickly detect dangerous products and their source. Consumers would gain more information about products they buy.
A pilot project has already been leveraging blockchain to track coffee export in Ethiopia.
Strong business relationships
Smart contracts help business representatives enhance mutual confidence. What is more, storing business documents on blockchain would establish a transparent partnership.
Farmers cooperate with suppliers of fertilizers, fodder, and equipment; bulk and retail chains as well as other farms. Blockchain tech would prevent partners from exceeding expenses, knock-down prices or withheld payment for the delivered products. Particularly, Ties.Network startup offers decentralized business services.
Successful search for investors
ICO (an analog of IPO offering cryptocurrency tokens instead of shares) is a new means of investment attracting having become the hottest discussion topic in the business space in 2017. Currently, ICO investment volume considerably surpasses venture investing. The secret of such investment lies in the absence of necessity in long-term negotiations involving lawyers. All you need is to provide a convincing description of a project and create an online source to carry out a campaign.
On the whole, the majority of projects launching ICO are considered to be IT. Today, this young segment contains lots of scam projects that disappear with investors’ money. However, as the crypto industry develops and becomes regulated, it would be able to fortify own reputation and grant small farms new possibilities.
Sales and rental services
Equipment and plant room rental is a must for every agricultural worker. It can take you weeks to find appropriate variants, which appears an element of lux for farmers in the busy season.
Blockchain-fueled services for choosing equipment and commercial real estate to rent will come in handy to quickly find variants and sign an agreement. Particularly, Atlant startup is working on such a platform.
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