Despite being a burgeoning market, given the complexity of applying this technology, the global market value of blockchain applied to food and agriculture amounted to about US$140 million in 2020, and is expected to grow to about US$1.5 billion by 2026.
Applications of this technology in agriculture include: smart contracts and agricultural insurance, smart farming, traceability in the food chain and e-commerce.
For example Banco Santander and Agrotoken teamed up to offer loans secured by crypto assets. It is the first global experience to back loans with tokens related to agricultural commodities such as soybeans, corn and wheat. This digital solution will allow farmers and the agricultural ecosystem to have an easy and fluid access to a new financing system, expanding credit capacity by using tokenized assets.
Climate change is causing unpredictable weather conditions. The implementation of blockchain allows to mitigate the effect of this instability by:
- developing smart contracts: systems that adapt payments based on weather data collected in the blockchain system. In addition, this technology allows payments to be triggered automatically.
- optimizing farm data collection: the use of blockchain oracles, the mechanism that connects input and output data in the blockchain system, improves data integration, avoiding errors in risk forecast calculations.