Discussing possibilities of Blockchain and DLTs in agriculture with Founder and CEO FESSChain Durga Tripathi

While talking to media, the Founder and CEO FESSChain Durga P. Tripathi opined Blockchain and distributed ledger technologies (DLTs) as a probable solution to the ongoing farmer’s issue. Although it is also true that people have reservations about the practicality of it in the real world. In order to make it lesser complex, he took on the doubts with the key facts and the solutions in a detailed manner.

Before we begin this, it is important to analyze the 3 three key amendments with their concerns made by the govt. helpful to understand the context completely.

1. Essential Commodities (Amendment) Bill: Key Points - It was not allowed for anyone to store essential commodities beyond the permissible limits before 1955. - In June 2020 the Indian government, came up with an ordinance allowing everyone to hold as much as they want except these conditions a) War b) Pandemic situation

Concerns - • Farmers and normal people are insecure about the prices going up for no reason when someone with guilt-ridden intentions holds up any amount they wish to. • Govt. says this is for both farmers and business persons but the fact is farmers don’t have that much holding power when compared to the industrialists.

2. Farmer’s (empowerment and protection) agreement on price assurance and farm services bill • This bill encourages contract farming practices for the beneficiaries.

• According to this, big companies like Parle Agro, Lays can come into an exclusive contract with farmers where they will fix the price of a particular crop even before the sowing.

• At the time of reaping, the company will buy all the harvest directly from the fields of the farmers.

Concerns- Case1: How will the company ensure the harvest if the price is more than the contract and the farmer goes to the market where he directly sells the whole crop?

Case 2: What will happen to the farmer’s harvest if the company denies purchasing it?

Case 3: Now comes the worst part, the contract’s mediator being a Mandi govt. employee as the govt. the employee will listen to the company to get more profits.

3. Farmer’s produce trade and commerce (promotion and facilitation) Bill-

Before farmers could sell all their harvest to their regional Mandi & the govt. at market rate or Minimum support price (MSP) respectively.

• This bill gives farmers the power of choosing where they want to sell whether to mandi or govt. blocks. • As per the NSSO facts, only 6% of the farmers were selling their crops at MSP to the block.

• Farmers were compelled to sell their harvest to the middlemen at mandi who used to exploit them by offering lesser rates as they had the advantage of buying all the crops at once.

• Middlemen used to store all the crops together in their big godowns so that they can supply that into the retail market.

Concerns

Worries of Middlemen- what will happen to them and their godowns?

Farmers are saying govt. is bringing companies to run away from providing MSPs

As per Govt., they are doing this to empower farmers and bring revolution in the agriculture sector.

When asked as per him what are the major challenges before government?

He said that both govt. and farmers have their respective point of view and nobody can be declared right or wrong. But here we see some structural operational and executional drawbacks.

• Trust issues are also a fractional but important part of it.

• Govt. doesn’t have important data at the beginning of any production crop.

• It has been evident in the past that in many states crops are being produced on a very large scale against a very lesser amount.

To these obstacles he also came with few brownie points

• Govt. should make blockchain-based Hybrid Environment App where-

• Govt. must issue Minimum Retail Price at the blockchain rather than MSP. • Govt. must collect the data from the farmers in the governance-based module. Also, Farmer must have access to their crop status weekly or daily as per their preferences. The portal will be allowing farmers to interact with the other farmers by using the same app together.

• Tokenizing all the essential commodities and every middleman must be rewarded by stake based module as per their holding capacity. Irrespective of the prices of the commodity they must be rewarded as per the storing capacity. Since it will be a decentralized tokenized model they won’t be able to exploit the system. Additionally, with this arrangement storing the whole crop or no crop at all will not impact the prices of the commodity.

He also added, “Under proposed Contract Farming practices, a farmer and company must enter into a blockchain-based contract and the contract should be executed on the bare minimum centralized authorization at the Minimum Retail Price of the commodity.

While entering into a contract the company will have to provide their tokenized shares as a security and Tokenized Fiat Guarantee for entering into the contract. Since it would be all on the blockchain it won’t impact the workflow and the process will be automatic” .

At the same time he believes, throughout this ecosystem, the government should promote Zero Budget Agriculture. No loans will shrink the farmer suicides and it will be a win-win situation for farmers. The food security bill should be amended and based on the governance data the advantages should be provided.

He was very excited with the incentives blockchain has to offer to the agriculture industry. He added , “No Farmer will have to sell their crops lesser than the MRP with a higher reliability factor as it would be decided by analysing the data about farmers. The proposed solution also promotes No Middlemen exploitation practices’. In fact, it will promote capacity based rewards for the middlemen too.

He is hopefully pointed out few more things like- “Since things would be decentralized, companies are bound to opt for the right procedures. To lure the farmers they will also start working on the healthy competitive structure with other companies. Excuses like No FCI godown will vanished. It will also heavily scale down the corruption practices at various layers.”

He was bullish on Zero Budget Agriculture with DLT as it will attract more young people to embrace farming as a career. Which in turn will help in reducing the unemployment issues to a respectable measure in rural areas. With food security bill amendment, govt. would need not bear the losses for providing this security and only rightfully needy people get benefit out of it.