Blockchain in Agriculture

Abstract

Agriculture is the production of food, fibre and data. The data attests to the qualities and properties of the food and fibre, and is therefore economically valuable. Yet while data is cheap to add, it is often costly to verify. In consequence, a significant percentage of the final cost of agricultural produce goes to costs of establishing provenance, proving compliance with standards and regulations, undergoing inspections, audits, and process monitoring, as well as costs of intermediation, quality assurance, and branding. Blockchain, a new technology that enables different parties along a supply chain to trust digital data (it is sometimes called a ‘trustless’ technology), has the potential to lower transaction costs and improve the efficiency of agricultural supply chains by reducing the need for monitoring and verification of data. Yet while hugely promising, the technology is still new and experimental, and faces a number of significant barriers to adoption.

Keywords: blockchain, agriculture, trade, supply chains

JEL Classification: Q1, O3