Agro-Chain: Blockchain Powered Micro-Financial Assistance for Farmers

Abstract

Agriculture acts as the fixed sector for all economics over a millennium which constitutes a critical indeed major part of the developing country’s GDP and extends as a massive part of rural household monetary income. As the majority of farmers mainly depend on the government schemes for financial support where agriculture banking plays a significant role in the modernization of agricultural activities, but the majority of the farmers/peas-ants are excluded from such banking systems and do not have access rights. It is explored with the farmers’ concern that the traditional rural financial paradigm was supported by public authorities that desire to facilitate access to the financial service. However, such banking systems were costly and unsustainable due to poor repayment. They ultimately did not have a great effect on agriculture production and, in turn, led to the shutting down of state-owned banks and finally gave rise to the concept of microfinance. Over time, technological advancement from the plow to fertilizers and biotechnology has revolutionized the industry. Blockchain is the advancement of new technology aspiring to upgrade agricultural activities related to farmers’ financing. This chapter adopts distributed ledger technology (DLT) that allows the recorded data in the system to fan-out amongst the farmers, consumers, and all the actors involved in the system. Blockchain-based micro-financial assistance makes the transactional data more transparent and immutable task. It reduces the intervention of the middleman in the 462 transaction who expects some percentage of commission from farmers for selling their food grains in the market. The work extends to allow the farmers to establish a digital identity and supports them to access various monetary offers. The system makes a significant difference in helping to reduce the rate of interest and also ensures efficient repayment of loans by making it more accessible through smart contracts (SCs). Every farmer/consumer can keep track of the transactions carried out by them in selling/buying the products through the platform. Further, update the data collected from these transactions to the credit history of the farmers that give them the aid of availing the credits. The system makes a significant difference in helping to reduce the rate of interest and also ensures efficient repayment of loans by making it more accessible through SCs.