Pathways to Equitable Contract Farming System through Blockchain Technology

The policy brief examines the revolutionary potential of incorporating blockchain technology into Contract Farming Systems (CFSs) to improve fairness and inclusion in agricultural supply chains. Under the contract farming system, buyers, typically agribusiness companies or processors, and agricultural farmers enter into formal agreements to buy and sell produce. The arrangement promotes cooperative partnerships between farmers and agribusinesses, but it is not without difficulties since some actors in the chain have reported information asymmetry, contract violations, resource restrictions, and power imbalances in decision-making. Blockchain Technology (BCT) has the capacity to tackle the obstacles mentioned above. Its decentralized and secure architecture increases the supply chain’s transparency, trust, and efficiency. Blockchain uses smart contracts to address problems, including power imbalances, financial obstacles, and contract disputes. Fairness and sustainability can also be promoted by making it simpler for women, small farmers, and other underrepresented groups to participate in the agricultural system. As a result, legislators are urged to enact agricultural policies that support digital innovations, encourage the adoption of new technologies, and support initiatives aimed at increasing stakeholder capacity. Contract farming systems have the potential to develop transparent, fair models that promote sustainable agricultural development if they adopt blockchain technology and put supportive legislation in place.