Revolutionising agricultural finance through blockchain
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Revolutionising agricultural finance through blockchain

Witness how blockchain revolutionises supply chains, providing farmers with direct access to markets and fair compensation.

In an age where digital transformation is paramount, the agricultural sector stands on the brink of a revolution, and blockchain can play an important part in it. Blockchain is ‘a digital, decentralised and distributed ledger in which transactions are logged and added in chronological order with the goal of creating permanent and tamperproof records’.

Blockchain-enabled solutions for Supply Chain Finance can reduce costs in the agricultural industry.

Manjot Singh Bhatia

A new era for farmers: Blockchain’s promise

Agricultural supply chains regularly involve numerous middlemen, lack financial accessibility for farmers, and suffer from inefficiencies and transparency issues. Blockchain-enabled Supply Chain Finance (SCF) offers hope for improvement. Current challenges include liquidity problems, limited digitalization, and inefficient brokerage. Blockchain integration addresses these issues, reducing friction and costs, thus promising a more inclusive financial environment for farmers.

Supply chains in agriculture commonly include many middlemen, creating financial barriers for farmers and operational inefficiencies. Blockchain-driven Supply Chain Finance (SCF) shows promise in addressing these challenges, offering a path to improved transparency and efficiency. Current obstacles, such as liquidity issues, digital tool scarcity, and inefficient brokerage processes, hinder progress. However, by integrating blockchain technology, these barriers can be tackled, leading to reduced costs and a fairer financial landscape for farmers.

From theory to practice: Real-world success stories

Four case studies illustrate the journey from theory to practice adopting blockchain technology. These small-scale companies, with under 100 employees, have integrated blockchain-enabled Supply Chain Finance (SCF) into their agricultural operations. These stories are practical examples of how blockchain addresses specific financial challenges in agriculture, offering insights into enhancing traceability and facilitating secure transactions. The most significant impact of blockchain lies in its ability to drastically reduce transaction costs, benefiting both organisations and various entities involved. This reduction opens avenues for farmers to access crucial finance while enhancing supply chain efficiency, paving the way for more sustainable and profitable farming practices.

Credit. Midjourney

Navigating the blockchain revolution

Adopting blockchain poses challenges, from tech hurdles to resistance from traditional supply chain actors. Our research highlights strategic approaches to address these issues, focusing on stakeholder engagement, regulatory clarity, and scalable platforms. These strategies pave the way for a fairer agricultural finance ecosystem.

Blockchain’s impact on farmers, particularly those historically marginalised, is profound. It opens new financing avenues, connects farmers directly with markets, and ensures fair compensation. This empowerment goes beyond financial issues, fostering equitable supply chains where farmers have a voice.

Furthermore, blockchain-enabled SCF solutions offer significant social benefits by opening international markets and ensuring fair prices for produce. This contributes to reducing poverty and hunger, supporting local communities towards a better lifestyle and sustainable development.

Looking ahead: Shaping the future of agricultural finance

The research concludes by urging ongoing innovation to unlock blockchain’s full potential in agriculture. It envisions a future where blockchain not only improves supply chain efficiency but also promotes resilience and sustainability. For industry professionals, the message is evident: the agricultural blockchain revolution is just starting, relying on collaboration, innovation, and dedication to uplift farmers globally.

Integrating blockchain into agricultural supply chains isn’t merely a tech upgrade; it signifies a shift toward transparent, efficient, and inclusive financial practices. Despite challenges, case studies reveal opportunities for significant impact. Industry practitioners are called to embrace the blockchain revolution, not just for operational excellence but for a more sustainable and fair future in agriculture.

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Journal reference

Bhatia, M. S., Chaudhuri, A., Kayikci, Y., & Treiblmaier, H. (2023). Implementation of blockchain-enabled supply chain finance solutions in the agricultural commodity supply chain: a transaction cost economics perspective. Production Planning & Control, 1-15. https://doi.org/10.1080/09537287.2023.2180685

Dr. Manjot Singh Bhatia is working as a faculty member of Operations and Supply Chain Management. He has over 5 years of experience in academia and industry. His current research interests include the circular economy and industry applications of blockchain implementation. He has published over 20 articles in reputable journals such as Industrial Marketing Management, International Journal of Production Research, IEEE Transactions on Engineering Management, Production Planning & Control, etc.

Dr. Atanu Chaudhuri is a Professor of Technology and Operations Management at Durham University Business School, UK. His research focuses on the adoption of technologies such as additive manufacturing, blockchain across the supply chain, circular economy, sustainability, and supply chain risk management and resilience. He is a member of the Digital Supply Chain Working Group at Mobility Goes Additive, a leading additive manufacturing network. His research has been published in leading journals in Operations and Supply Chain Management.

Dr. Yasanur Kayikci (Ph.D., Information Management, Vienna University of Economics and Business) is a Business Consultant, Entrepreneur, and Associate Professor of Industrial Engineering specializing in Logistics and Technology Management. With extensive business experience across various industries, her research interests encompass digital supply chains, logistics information systems, industrial digital transformation, technology management, and innovations (AI, Industry 4.0, IoT, blockchain, big data), as well as smart circular economy. She has authored or co-authored more than 100 publications, including peer-reviewed international journal papers, books, book chapters, and conference proceedings.

Dr. Horst Treiblmaier is a Full Professor and Head of the School of International Management at Modul University Vienna, Austria. He has worked as a Visiting Professor at Purdue University, the University of California, Los Angeles (UCLA), the University of British Columbia (UBC), and the University of Technology in Sydney (UTS). His research interests include the economic and business implications of blockchain, as well as the evolution of the token economy. He teaches blockchain-related topics and is a frequent speaker at academic conferences and industry events. In 2022, he was awarded the Blockchain Frontier Award by the Blockchain Research Institute (BRI).