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Smart Agricultural Futures Market: Blockchain Technology as a Trust Enabler between Smallholder Farmers and Buyers

Author

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  • Malni Kumarathunga

    (School of Computing, Data, and Mathematical Sciences, Western Sydney University, Parramatta, NSW 2150, Australia)

  • Rodrigo N. Calheiros

    (School of Computing, Data, and Mathematical Sciences, Western Sydney University, Parramatta, NSW 2150, Australia)

  • Athula Ginige

    (School of Computing, Data, and Mathematical Sciences, Western Sydney University, Parramatta, NSW 2150, Australia)

Abstract

Smallholder farmers produce over 70% of the world’s food needs. Yet, the socioeconomic conditions of the smallholder farmers are substandard. One of the primary reasons for this unpropitious situation is that they generate modest income by selling their harvest due to the lack of trusted buyers and organized markets. This research explores how technology can enable the trust to reduce transaction-related risks, empowering unknown parties to transact. Blockchain technology has the potential of mitigating transaction-related risks and promoting trust with a tamper-proof history of transactions and automatic execution of smart contracts. Based on blockchain technology to promote trust, this research has discovered a novel approach for smallholder farmers to conduct exchanges by generating social capital as an individual and using that social capital as collateral for financial exchanges when establishing contracts. This approach empowers farmers to trade smart futures contracts on behalf of the expected harvest at a better rate to receive some cash in advance to be used in the cultivation process to produce a high-quality harvest that attracts better rates. It also enables them to perform aggregated marketing with enhanced market linkages that, in turn, assist in increasing margins made by the farmer.

Suggested Citation

  • Malni Kumarathunga & Rodrigo N. Calheiros & Athula Ginige, 2022. "Smart Agricultural Futures Market: Blockchain Technology as a Trust Enabler between Smallholder Farmers and Buyers," Sustainability, MDPI, vol. 14(5), pages 1-20, March.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:5:p:2916-:d:762614
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    Cited by:

    1. Yan Liu & Chao Shang, 2022. "Application of Blockchain Technology in Agricultural Water Rights Trade Management," Sustainability, MDPI, vol. 14(12), pages 1-10, June.
    2. Mohammad Wasiq & Abu Bashar & Syed Akmal & Mustafa Raza Rabbani & Mohd Afzal Saifi & Nishad Nawaz & Youssef Tarek Nasef, 2023. "Adoption and Applications of Blockchain Technology in Marketing: A Retrospective Overview and Bibliometric Analysis," Sustainability, MDPI, vol. 15(4), pages 1-20, February.
    3. Marian Lubag & Joph Bonifacio & Jasper Matthew Tan & Ronnie Concepcion & Giolo Rei Mababangloob & Juan Gabriel Galang & Marla Maniquiz-Redillas, 2023. "Diversified Impacts of Enabling a Technology-Intensified Agricultural Supply Chain on the Quality of Life in Hinterland Communities," Sustainability, MDPI, vol. 15(17), pages 1-26, August.

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