Source: Bitcoin Garden, originally published on .
Experienced entrepreneur and investor Nick Evdokimov recently shared his interest in the relationship between the agriculture and blockchain technology. In an online course on YouTube, the expert focused on how some applications could benefit the industry by bringing a new level of efficiency to their markets. Nick believes there is one particular startup, Pavo, that can bring fresh solutions by allowing farmers to sell futures of their products.
It shouldn’t come as a surprise that agriculture is a $5 trillion industry that employs over a billion people around the world. However, it can be a thankless business for some of its most important value creators. In the agriculture supply chain, farmers and growers are generally left in the position of price takers, not price setters. This is due to many complex economic factors ranging from economies of scale to general inefficiencies in supply and demand.
A simple to understand fact is that the results of a farmer’s output are generally seen months after the first seed is planted. Given the situation, a farmer always works to provide an uncertain supply to an uncertain demand.
Recent technological improvements have made these inefficiencies more manageable while also improving the quality of farmers’ products. The past few years have seen an increase in the construction of smart farms based on Internet of Things technology. These cutting-edge farms rely on sensors placed throughout crops to monitor their development according to parameters such as lighting, temperature control, and humidity level.
More importantly, the sensors provide farmers with real-time data that is stored and analyzed. This way, they don’t have to wait months to make proper adjustments that guarantee the quality of their crops, nor to asses whether or not they will satisfy an estimated consumer demand.
“I started to collect data to understand and solve our problems… I see that we need farm memory, we should get rid of agriculture amnesia,” says Turkish almond farmer Mehmet Coka of his experiences integrating IoT solutions. He explains how a farming database sped up his business’ decision-making process and increased overall efficiency in ways even expert opinion wasn’t able to.
On these IoT databases is where blockchain technology adds a new dimension of efficiency. It’s also how blockchain startups such as Pavo are building promising applications.
Pavo stems from an established business that builds monitoring systems for tree nut growers in the European market. After the incorporation of IoT technology into their services, Pavo saw blockchain as the logical next step towards improving the agriculture industry. The platform shares the data gathered from IoT monitored crops onto its immutable, tamper-proof, public ledger. Here, different parts of the agriculture supply chain can use Pavo’s ERC-20 token to participate in the network and make financial decisions based on accurate information about any determined crop. This transparent environment allows farmers to sell futures on their production.
“We help farmers improve their crops, get more out of their crops, higher quality crops, better quantity, and then we help them bring it to market in a way that helps them survive, but also helps the end customer ensure that they’re buying what’s being advertised. Is it truly organic, is it truly natural? All of that data is stored in a blockchain,” states founder Allan Young.
This is a major improvement for the agriculture industry, as Nick notes in the course. “Because the investor buys crops at an early stage, he saves a significant amount of money. On the other hand, the farmer, receiving information about the size of demand, can adjust his own purchases, and adjust his own development. It is a very clear, and transparent process,” he explains.
More so, Allan believes Pavo could solve more than supply chain problems. Pavocoin could become a payment solution for the agriculture industry as a whole. “We’re in a way a protocol-level token for the agriculture industry, because when we have data in real time at the farm, we can then turn around and build a smart contract marketplace. We’re very similar to what you see in a Chicago Mercantile Exchange,” he envisions in an interview with Nick. In a near future, pavocoin could be used for all sorts of transactions in the agriculture industry, turning it into its own decentralized economy.
This would do more than help farmers have better control of their crops. It would help the agriculture industry as a whole by building better payment channels, more transparent communications, and greater traceability on any product’s provenance.
Recent studies appear to corroborate Allan’s vision that blockchain applications can also improve other key areas of the industry, especially in matters of provenance. Notably, demand for organic products has seen a “double-digit growth” and general consumers are becoming more health conscious. It follows that sellers who can provide transparent, tamper-proof information on their supply chains are at an advantage within this growing market segment.
Interest in the AgTech continues to grow due to its financial, logistical, and even humanitarian benefits. According to a recent publication, investors such as the Bill and Melinda Gates Foundation are looking into the possibilities presented by IoT and blockchain technologies to the global breadbasket. Accordingly, a fertile startup ecosystem has sprouted around these use cases, among which Pavo has come to be considered as the most promising by experts such Nick.
- Visit Nick’s website to learn more
- Watch Nick’s YouTube channel
- Follow Nick on Linkedin and Telegram
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