Supply Chain Transparency, Fair Trade Practices, and Automated Payments in the Farming Sector
Farming forms the backbone of society as we know it today. Things would quickly fall apart if farmers weren’t working as hard and as well as they currently are. While farming is often perceived as a straightforward business focused on crops and livestock, there are so many other avenues that could help farmers supplement their income and improve their operations on a day-to-day basis. Let’s take a look at how farmers can use supply chain transparency, fair trade practices, and automated payments with smart contracts to improve their farming businesses.
Options to Diversify Your Portfolio as a Farmer
To diversify your portfolio and improve your farming business, first think about what kinds of risk you are willing and able to take. It may seem unusual for this to be the first step, but understanding your risk profile is crucial. In other words, are you the kind of person more suited for solid, long-term investments, or rather take risks and invest in Bitcoin or start trading? This is something that only you can know, and you should trust your feelings.
If you prefer to stay in the farming realm, then you can look into harnessing the power of crop residues, which are waste materials generated by agriculture. As you can see, there are many options to reinvest your money. The key is to remember the importance of diversifying your income sources, rather than relying solely on a single stream. It’s like having multiple eggs in different baskets, reducing the risk if one source falters. For those farmers who prefer to stay in their domain, namely farming and livestock, they can introduce alternative crops and livestock.
Luckily, people have finally started to catch on to how important farmers are and research is being steered towards the industry. The University of Idaho is planning a new research dairy, the first construction phase of which has already been completed. This shows the growing interest in this important industry and it’s worth investing in. For farmers, rather than relying solely on staple crops like corn or wheat, they can explore high-value crops such as organic vegetables, herbs, or specialty grains.
Supply Chain Transparency in the Farming Industry
While the term “supply chain transparency” is used often, many don’t yet know exactly what it entails. Put simply, transparency in supply chains speaks to the clarity and openness regarding the processes, practices, and information that govern the movement of goods from farm to consumer. In the farming industry, this means making the entire agricultural supply chain visible—from production and processing to distribution and sale.
People should know where their produce is coming from, and giving them insight into this can really cement loyalty and bring in new clients who value this level of transparency. For example, consumers are becoming more and more interested in knowing how their food is produced. Are the farmers using sustainable practices? Are workers being treated fairly? All these questions can be answered when consumers are given access and information about the supply chain.
Blockchain technology plays a pivotal role in enhancing supply chain transparency in the farming industry. By using a decentralized and immutable ledger, blockchain ensures that every step in the supply chain—from farm to table—is accurately recorded and verifiable. This technology allows consumers to track the origin of their produce, confirm sustainable farming practices, and verify fair treatment of workers. With blockchain, transparency is no longer just a promise; it becomes a reliable, accessible source of truth that fosters trust between farmers, businesses, and consumers.
Agri-Tourism and On-Farm Experiences
This is quite a ‘new’ avenue; According to agritourism statistics, the global agritourism market size was valued at $33.8 billion in 2022 and is projected to reach $111.1 billion by 2032, growing at a CAGR of 12.5% from 2023 to 2032. If you’re unfamiliar with agrotourism, this section is for you: it involves farmers using their land for recreational activities, and generating additional income through farm tours, pumpkin patches, corn mazes, and educational workshops. This has two advantages, namely income generation and also enhanced community engagement and brand loyalty. Creating on-farm experiences such as farm-to-table dinners or seasonal festivals can attract customers increasingly interested in local and sustainable food sources.
Blockchain can enhance agri-tourism and on-farm experiences by enabling visitors to trace the origins of farm products, ensuring transparency in sustainable practices. Farmers can use blockchain to certify organic or local sourcing, giving consumers confidence in the authenticity of their experience. Additionally, blockchain can streamline digital payments for farm activities and products, offering secure and efficient transactions. This increased transparency and trust align with consumer demand for sustainability, strengthening brand loyalty and boosting the appeal of on-farm experiences.
Fair Trade Practices
With the fair trade movement being huge in many European countries already, America and other Western countries are catching up to the Europeans very fast. Fairtrade is a movement that advocates for equitable trading conditions and opportunities for marginalized producers in developing countries. In the farming sector, fair trade practices ensure that farmers receive a fair price for their goods and can thereby maintain sustainable livelihoods. The focus is on social, economic and environmental sustainability to empower farmers and promote community development.
Through decentralized ledgers, blockchain allows consumers to verify the origin of products, ensuring that they are sourced from ethical producers who adhere to fair trade standards. This increased visibility not only holds companies accountable but also ensures that farmers and producers receive their rightful compensation without exploitation by intermediaries. By leveraging blockchain, the fair trade movement can further promote ethical practices, empowering marginalized communities and fostering sustainable development.
Automated Payments with Smart Contracts
Automated payments have up until now primarily been used in corporate environments, and while farming doesn’t seem to be corporate at first glance, it’s a business like any other. If farmers start to use smart contracts, this will be a huge advancement in the farming supply chain because they can now use self-executing contracts with the terms of the agreement directly written into code, meaning that farmers can now focus on what they do best – bringing the best produce onto your family’s table.
Taking a farmer selling crops to a distributor as an example, you’ll soon see that smart contracts can be really beneficial as they work behind the scenes by automatically triggering payment upon delivery confirmation. For one, this reduces the administrative burden and speeds up the payment process, and secondly, farmers will receive their funds much faster. The agricultural sector is a fast-moving one, and with automated payment options, fair trade practices, and supply chain transparency, it can go only go uphill from here.
Conclusion: A Brighter Future for Farming with Blockchain and Automation
The integration of blockchain technology and automated payments into the farming sector marks a significant leap forward for transparency, fairness, and efficiency. Supply chain transparency ensures that consumers have insight into the origins and ethical practices behind their food, while fair trade practices help guarantee that farmers are compensated fairly. With the added power of smart contracts, farmers can automate payments, reducing delays and administrative burdens. As the industry continues to evolve, these innovations will empower farmers, build consumer trust, and promote a sustainable and equitable future for agriculture.