Implementation of blockchain technology in agriculture: fashionable trends or requirements of the modern economy


Keywords: blockchain technology, agricultural enterprise, system, economic justification, innovative project.

Abstract

Purpose. The purpose is to reveal the theoretical and practical aspects of the implementation and application of blockchain technology in the economic activity of agricultural enterprises, taking into account the economic feasibility of their implementation and determining the system of elements of the implementation of blockchain technology in agriculture.

Methodology / approach. The following methods were used during the research: analysis and synthesis, scientific abstraction – when determining the goal and formulating research conclusions; comparative, calculation, statistical and graphic – when evaluating, analyzing, comparing and determining the current state of implementation of blockchain technology in the economic activity of agricultural enterprises. The method of surveying agricultural producers regarding their awareness of blockchain technology and the benefits of its application was also used. The research used: a theoretical approach (based on the analysis of theoretical aspects of blockchain technology and its application in agriculture) and a practical approach (on the basis of the proposed methodology, the economic feasibility of using blockchain technology in the economic activity of an agricultural enterprise was determined).

Results. The main areas of influence of blockchain technology in agriculture have been determined. It has been established that every year the amount of funding for the implementation of blockchain technology is increasing, and the reasons are identified. The world experience of implementing blockchain technology in the economic activity of agricultural producers is considered. The results of a survey of agricultural producers of the Mykolaiv and Kirovohrad regions regarding their awareness of blockchain technology and the benefits of its implementation are highlighted. The objective reasons that affect the implementation of blockchain technology in agricultural production are determined and ways of its popularization are proposed. An action algorithm for the introduction of blockchain technology for agricultural producers has been developed. Agricultural producers who are potentially ready and financially able to implement this technology in their activities have been identified. The main factors affecting the cost of implementing blockchain technology in agricultural production have been identified. A methodology for calculating the economic feasibility of implementing blockchain technology according to optimistic and pessimistic options is proposed, and the calculation of the net present value, payback period, discounted payback period of the project, internal rate of return and the rate of return on the example of a specific enterprise of the Mykolaiv region is carried out. Based on theoretical and practical approaches, a system of elements for implementing this technology in agriculture has been developed.

Originality / scientific novelty. The novelty consists in the implementation of a comprehensive theoretical study of the problems and prospects of the implementation of blockchain technology in agriculture; for the first time, a system of elements for the implementation of blockchain technology in agriculture was developed; an algorithm of actions for agricultural enterprises that plan to implement this technology was improved; a methodology for calculating the economic feasibility of implementing blockchain technology in an agricultural enterprise was proposed.

Practical value / significance. The results can be used in the process of decision-making by business entities regarding the implementation of blockchain technology and the calculation of its economic feasibility, during the optimization of the processes of management of production, financing, supply chains, etc., as well as by scientists, government bodies and other entities that are interested in implementation of blockchain technology in agriculture.

References

Zayed, L. M. M., & Othman, O. H. (2023). Effect of blockchain technology in innovating accountants’ skills: a multimethodology study in the industrial companies listed on the Amman Stock Exchange. Journal of Innovation and Entrepreneurship, 12, 44. https://doi.org/10.1186/s13731-023-00312-0.

Pólvora, A., Nascimento, S., Lourenço, J. S., & Scapolo, F. (2020). Blockchain for industrial transformations: a forward-looking approach with multi-stakeholder engagement for policy advice. Technological Forecasting and Social Change, 157, 120091. https://doi.org/10.1016/j.techfore.2020.120091.

Thompson, B., & Rust S. (2023). Blocking blockchain: examining the social, cultural, and institutional factors causing innovation resistance to digital technology in seafood supply chains. Technology in Society, 73, 102235. https://doi.org/10.1016/j.techsoc.2023.102235.

Zhao L. (2023). Blockchain adoption and contract coordination driven by supplier encroachment and retail service: An analysis from consumers’ information traceability awareness. Technology in Society, 73, 102237. https://doi.org/10.1016/j.techsoc.2023.102237.

Zhang, O., He, Y., Lai, R., Hou, Z., & Zhao, G. (2023). A survey on the efficiency, reliability, and security of data query in blockchain systems. Future Generation Computer Systems, 145, 303–320. https://doi.org/10.1016/j.future.2023.03.044.

Grybyniuk, O. M., Dukhnitskiy, B. V., & Sheremet, O. O. (2018). Prospects for using “blockchain” technology in agriculture. Economika APK, 3, 75–81. Available at: http://eapk.org.ua/sites/default/files/eapk/2018/03/eapk_2018_03_p_75_81.pdf.

Rutytska, V. (2017). Blockchain plus agriculture: how consumer and business lives will change. Economic Truth. Available at: https://www.epravda.com.ua/publications/2017/10/25/630431.

Moroz, T. O. (2019). Prospects for the use of blockchain technology in the agricultural sector of the economy. Modern Economics, 17, 153–157. https://doi.org/10.31521/modecon.V17(2019)-24.

Yakovchuk, M., Mikhalevskyi, V., Medvedchuk, N., Skrypnyk, T., & Semenyuk, B. V. (2021). Decentralized system based on blockchane technology for decision making in the agricultural sector. Herald of Khmelnytskyi National University. Technical Sciences, 6, 55–63. https://doi.org/10.31891/2307-5732-2021-303-6-55-63.

Di Vaio, A., & Varriale, L. (2020). Blockchain technology and its impact on the efficiency and transparency of supply chain management: a systematic review. International Journal of Information Management, 52, 102014. https://doi.org/10.1016/j.ijinfomgt.2019.09.010.

Zhang, Z., Su, Z., & Tong, F. (2023). Does blockchain technology provide economic benefits? Evidence from the financial market. Finance Research Letters, 56, 104152. https://doi.org/10.1016/j.frl.2023.104152.

Ali, О., Ally, М., Clutterbuck, & Dwivedi, Y. (2020). The state of play of blockchain technology in the financial services sector: a systematic literature review. International Journal of Information Management, 54, 102199. https://doi.org/10.1016/j.ijinfomgt.2020.102199.

Zheng, C., Huang, Hu., & Hu, Y. (2023). The impact of blockchain on enterprises sharing real data based on dynamic evolutionary game analysis. Sustainability,15(12), 9439. https://doi.org/10.3390/su15129439.

Komulainen, R., & Nätti, S. (2023). Barriers to blockchain adoption: empirical observations from securities services value network. Journal of Business Research, 159, 113714. https://doi.org/10.1016/j.jbusres.2023.113714.

Köhler, S., & Pizzol, M. (2020). Technology assessment of blockchain-based technologies in the food supply chain. Journal of Cleaner Production, 269, 122193. https://doi.org/10.1016/j.jclepro.2019.04.323

Xiong, H., Dalhaus, T., Wang, P., & Huang, J. (2020). Blockchain technology for agriculture: applications and rationale. Frontiers in Blockchain, 3, 7. https://doi.org10.3389/fbloc.2020.00007.

Motta, G. A., Tekinerdogan, B., & Athanasiadis, I. N. (2020). Blockchain applications in the agri-food domain: the first wave. Frontiers in Blockchain, 3, 6. https://doi.org/10.3389/fbloc.2020.00006.

Kucher, L. (2018). Implementation of innovation projects in the context of agribusiness 4.0 in Ukraine. In M. Wigier, A. Kowalski (Eds.), The CAP and national priorities within the EU budget after 2020 (pp. 262–278). Warsaw, Institute of Agricultural and Food Economics – National Research Institute. https://doi.org/10.30858/pw/9788376587516.20.

Patel, H., & Shrimali, B. (2023). AgriOnBlock: secured data harvesting for agriculture sector using blockchain technology. ICT Express, 9(2), 150–159. https://doi.org/10.1016/j.icte.2021.07.003.

Marchese, A., & Tomarchio, O. A. (2022). Blockchain-based system for agri-food supply chain traceability management. SN Computer Science, 3, 279. https://doi.org/10.1007/s42979-022-01148-3.

Hang, L., Ullah, I., & Kim, D.-H. (2020). A secure fish farm platform based on blockchain for agriculture data integrity. Computers and Electronics in Agriculture, 170, 105251. https://doi.org/10.1016/j.compag.2020.105251.

Sharma, V., Tripathi, A.-K., & Mittal, H. (2022). Technological revolutions in smart farming: current trends, challenges & future directions. Computers and Electronics in Agriculture, 201, 107217. https://doi.org/10.1016/j.compag.2022.107217.

Singh, R. K., & Vishwakarma, L. P. (2023). Application of blockchain technology in agri-food supply chains: opportunities and challenges. In K. Mathiyazhagan, D. Mathivathanan, V. Raja Sreedharan, V. Sunder M (Eds), Blockchain in a volatile-uncertain-complex-ambiguous world (pp. 101–117). Elsevier. https://doi.org/10.1016/B978-0-323-89963-5.00014-9.

Zhang, Q., He, Y., Lai, R., Hou, Z., & Zhao, G. (2023). A survey on the efficiency, reliability, and security of data query in blockchain systems. Future Generation Computer Systems, 145, 303–320. https://doi.org/10.1016/j.future.2023.03.044.

Liu, W., Shao, X-F., Wu, C-H., & Qiao, P. (2021). A systematic literature review on applications of information and communication technologies and blockchain technologies for precision agriculture development. Journal of Cleaner Production, 298, 126763. https://doi.org/10.1016/j.jclepro.2021.126763.

Mehannaoui, R., Mouss, K. N., & Aksa, K. (2019). IoT-based food traceability system: architecture, technologies, applications, and future trends. Food Control, 145, 109409. https://doi.org/10.1016/j.foodcont.2022.109409.

Bai, C., Quayson, M., & Sarkis, J. (2022). Analysis of Blockchain’s enablers for improving sustainable supply chain transparency in Africa cocoa industry. Journal of Cleaner Production, 358, 131896. https://doi.org/10.1016/j.jclepro.2022.131896.

Voloshchuk, V., Voloshchuk, Y., Varchenko, O., Karnaushenko, A., & Khakhula, B. (2022). Investment determinant of the sustainability of innovative technologies of energy supply in the agro-food system of Ukraine. Rivista di Studi sulla Sostenibilita, 2, 373–395. https://doi.org/10.3280/RISS2022-002021.

Sustainable Development Goals. Available at: https://www.unicef.org/sustainable-development-goals.

Ukrinform (2022). More than 800 million people are starving in the world. Report of the World Food Programme. Available at: https://www.ukrinform.net/rubric-economy/3557635-u-sviti-golodue-ponad-800-miljoniv-osib-dopovid-vsesvitnoi-prodovolcoi-programi.html.

Worldometers (2023). World Statistics in Real Time. Available at: https://www.worldometers.info.

Results of the Ukrainian agro-industrial complex export for 2021 and 2022: portfolio from UKAB. 2023. Available at: https://minagro.gov.ua/news/rezultati-eksportu-ukrayinskogo-apk-za-2021-ta-2022-roki-portfolio-vid-ukab

State Statistics Service of Ukraine (2023). Statistical information. Available at: https://www.ukrstat.gov.ua.

Kononenko, L., Atamas, O., Nazarova, H., Selishcheva, Ye., & Kononenko, S. (2022). Optimization of small agricultural producer’s taxation by creating innovative-integrated structure. Scientific Horizons, 25(6), 100–110. https://doi.org/10.48077/scihor.25(6).2022.100-110.

Appinventiv (2022). How blockchain benefits agriculture and food industry in future? Available at: https://appinventiv.com/blog/blockchain-in-agriculture-and-food-sector.

CropIn (n.d.). Cropin Cloud brings together multiple solutions across. Available at: https://www.cropin.com.

Superagronom (n.d.). Bayer plans to implement blockchain in agriculture.: the main website for agronomists. Available at: https://superagronom.com/news/8459-bayer-planuye-vprovadjuvati-v-silske-gospodarstvo-blokcheyn.

Metaverse Post (2022). Don’t miss the most reliable blockchain development companies of 2023. Here are our 5 top picks! Available at: http://surl.li/gjnzc.

Ekonomichna Pravda (2019). “Ahead of the whole planet”: which companies are working with blockchain in Ukraine. Available at: https://www.epravda.com.ua/projects/fintech/2019/10/9/652378.

Blockchain Association of Ukraine (n.d.). Official site. Available at: https://bau.ai.

Karnaushenko, A., Petrenko, V., Tanklevska, N., Borovik, L., & Furdak, M. (2020). Prospects of youth agricultural entrepreneurship in Ukraine. Agricultural and Resource Economics, 6(4), 90–117. https://doi.org/10.51599/are.2020.06.04.06.

The Verkhovna Rada of Ukraine (2010). Tax Code of Ukraine. Available at: https://zakon.rada.gov.ua/laws/show/2755-17.

Karnaushenko, A. S., Grebenyuk, N. V., & Petrenko, V. S. (2022). Agricultural integration is an important factor of investment attractiveness of agriculture. Visnyk of Kherson National Technical University, 3(82), 184–190. https://doi.org/10.35546/kntu2078-4481.2022.3.26.

Cryptodnes (n.d.). Blockchain News. Available at: https://cryptodnes.bg/novini/blokcheyn.

Kucher, L., Hełdak, M., & Orochovska, L. (2023). Assessment of the readiness of agrarian enterprises to implement innovative projects. Agricultural and Resource Economics, 9(1), 224–259. https://doi.org/10.51599/are.2023.09.01.11.

The official site of the STOV “Promin”. Information about the enterprise’s activities. Available at: https://promin-v.com.ua.

Accenture Blockchain (n.d.). Enable and empower multiparty systems to accelerate transformation. Available at: https://www.accenture.com/us-en/insights/blockchain-index.

Sharma, A., Sharma, A., Singh, R. K., & Bhatia, T. (2023). Blockchain adoption in agri-food supply chain management: an empirical study of the main drivers using extended UTAUT. Business Process Management Journal, 29(3), 737–756. https://doi.org/10.1108/BPMJ-10-2022-0543.

Industry 4.0: At the intersection of readiness and responsibility (2020). Available at: https://cutt.ly/H5b4LNf.

Вitfury official website (n.d.). Available at: https://bitfury.com/blockchain.

Published
2023-09-20
How to Cite
Karnaushenko, A., Tanklevska, N., Povod Т., Kononenko, L., & Savchenko, V. (2023). Implementation of blockchain technology in agriculture: fashionable trends or requirements of the modern economy. Agricultural and Resource Economics: International Scientific E-Journal, 9(3), 124-149. https://doi.org/10.51599/are.2023.09.03.06
Section
Articles