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
1. Blockchain ?
2. The agri sector – the key facts !
3. Agri value chain – what and why ?
4. What has been addressed – partly !
5. 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)

5. 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.

6. 2. Key facts about the sector

7. 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

8. 4. Farmer Producer organisations (FPO) – addresses some challenges of AV chain !
1. 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
1. Better post harvest handling of the produce
• Collectivization of farm produce
• Shortens agri value chain
• FPOs ( some) provide field level sorting and grading
2. 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”

9. FPOs – some continuing challenges
1. 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
2. Limited market research and understanding of markets by FPOs.
1. Inability to reach niche markets
1. Many continue to be players in the traditional markets , many unable to connect with
organised retailers – who normally provide higher prices for the produce.
1. Low level of technology integration has been a challenge
2. Leadership issues and challenges of regulatory compliances – submissions etc
3. Lack of proper business plans / inability to pursue; and also Inadequacy of finance capital
4. Farmers incomes have not changed substantively

10. 5. What blockchain / technology could do ?
1. 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)
1. 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
1. Enhance ability to reach niche markets – use e-commerce sites / D2C models
1. With technology integration, Improve visibility of the products
1. Improve transparency and traceability of the product / including organic foods / safe foods /
export possibilities
1. With technology can help improve trust level of the customers
1. Help Enhance Farmer’s income

11. 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 – Tribals 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 & trust
Benefit
To producers Increased income Increased income

12. Thanks for your time