Importance of Blockchain in Agricultural Insurance

The crucial data and information on natural resources that support all types of farming are at the heart of the agri-food systems. Data and information flow from input to output, while goods flow from input to output through different value-adding phases, and financials flow from output to input. 

Data and information are generated and managed by many actors and stakeholders based on their needs and capabilities. The use of ICT, the internet of things (IoT), and numerous current data collecting and analysis technologies such as unmanned aerial vehicles (UAV), sensors, and machine learning distinguishes smart agriculture. The development of a comprehensive security system that supports the usage and administration of data is a critical problem in constructing smart agriculture.

Traditional data management methods are centralized and vulnerable to unreliable data, data distortion and abuse, and cyber-attack. Environmental monitoring data, for example, is often maintained by centralized government bodies with vested interests. They have the ability to influence data-driven decision-making.

Blockchain technology is used to store data and information generated by numerous actors and stakeholders across the whole value-added process of creating an agricultural product, from seed to sale. It assures that the data and information are transparent to the actors and stakeholders involved and that all recorded data is immutable. Instead of the “security of obscurity” that older systems rely on, blockchain technology provides security through decentralization. Data loss and distortion are less likely when data is distributed to stakeholders’ PCs rather than being stored in servers centrally maintained by administrators. A blockchain is a database that holds timestamped batches of product-related transactions and activities.

Data stored in centrally maintained servers are more subject to loss and distortion than data distributed to servers on the Internet. The database is extremely useful for generating data-driven mobile applications that aid in agricultural optimization. Furthermore, the blockchain tackles the difficulty of developing a complete safe infrastructure for IoT and integrating multiple ICT e-agriculture technologies.

Many smart farming methods are suggested and executed using IoT and blockchain technologies in tandem. For example, offer “a lightweight blockchain-based architecture for smart greenhouse farms.” IoT sensors in greenhouses serve as a private local blockchain that is centrally managed by the owner. A general-purpose smart agricultural architecture based on blockchain and IoT.

The framework’s core is a platform that uses blockchain to assist actors to establish trust. Agents involved in the selling of products can access the data recorded in the blockchain using smart mobile phones. A blockchain-based ICT e-agriculture will be a paradigm for local and regional use, with each actor storing real-time water quality data on the blockchain. Many firms are working on blockchain applications for smart agriculture. Fliament, for example, sells gadgets that connect physical items with networks using smart farming technology. It created penny-sized technology that can be utilized with current machines or devices through any USB connection to safely transact against a blockchain.

Farm organizations are also using blockchain to make their agricultural practices smarter. Farmland irrigation organisations in Taiwan, for example, utilize Blockchain to jointly store data and better communicate with the public. Each group acts as a “public juridical person,” publishing their own data and information regarding irrigation management to the blockchain, which the public may access. Transparency encourages the public to participate in irrigation management and improves efforts to improve water resource utilization. Over time, the longitudinal database established by blockchain may be used to guide decision-making on topics such as irrigation canal-building and maintenance.

Smart agriculture using blockchain does not lessen if anything, the technological barrier to participation for farmers. Importantly, big farms are more motivated to acquire reliable data than smallholders for uploading to the blockchain. Large farmers are more likely to participate in and profit from blockchain-based smart agriculture. As a result, the disparity between large farmers and smallholders may be created or exacerbated.


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