Blockchain: The Future Of Agricultural Trade

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It’s hard to believe how far agricultural production has come in the past 40 years. Various sectors, such as farm power and equipment, plant and animal breeding, fertilisers, animal feeding and disease control, have successfully adapted to a world where population growth and consumerism are rapidly increasing. However, there is one crucial part that hasn’t been able to keep up: trade.

Farmers and ranchers of the mid-1980s received only 31c for every dollar their produce earned. The rest was spent on sowing, distribution and all stages in between. Farm productivity has soared in recent decades thanks to intelligent machinery, automated packing houses, farm drones, efficient water systems, and robotic scarecrows, amongst others. This should mean that modern farmers are earning larger profits, as more supply equals more money. Unfortunately, technological innovations have not been favourable for those on the production side of the agricultural equation. Farm profitably has actually decreased to 16c for every dollar earned.

OLD-FASHIONED TRADE

It’s easy to point fingers at big corporations or blame unpredictable weather patterns, but the bottom line is that the actual trade of produce has not evolved to suit modern business practices. Instead, it has remained an industry with an annual value of US$3,1 trillion [about R37 trillion], which relies mostly on non-digital interactions such as paper records, handshakes and verbal agreements. These archaic practices have generated numerous problems including fraud, murky pricing and a dependence on costly intermediaries.