Preparedness of Indian Agricultural Sector to adopt Blockchain

Abstract: The foodgrains are basic necessity and still unavailable to many. The proposal is about understanding supply chain in agricultural sector. This includes identifying and defining driving factors of the supply chain. Inventory being important part of supply chain, it is the focus of the proposal. Integration of inventory models and blockchain is the central idea of the proposal. The inventory model for stochastic demands will be developed. The data will be taken for past decade for one region. Implementing blockchains will allow same information access to different end users. Being aware of the inventory capacity, information would improve farmers decisions for post – harvest storage. This will reduce the foodgrains wastage due to improper storage facilities and improve farmers revenue. The future scope is that researchers can use different inventory techniques for different regions. 1. Introduction: The Indian population being the second largest in the world food distribution is a major challenge. Approximately, 20% of foodgrains go wasted every year due to lack of storage facilities (Food Corporation of India). The foodgrains distribution is important part in the agricultural sector. The distribution of foodgrains was done by various supply channels. These supply channels became area of interest for several researchers. The focus was on making supply chain resilient and sustainable. The logistics played a vital role in supply chain. The need of proper transport was important. The technological advances over the decade improved the quality of transport. This improved the miscommunication at different levels of supply chain. The inventory management was important. The smart logistic units required well maintained inventories. Few researchers preferred RFIDs to avoid this problem. The data hacking was still cause of concern. This can be resolved by the use of the blockchains. The blockchains are data sets which comprise the information transactions at different levels in supply chain. The blockchains allows data traceability and transparency. This makes the same data available to different end users. This will help the farmers get the estimate of inventory capacity. Farmers will be able to decide the location where the foodgrains are to be stored. The detailed description is discussed in the literature. The blockchains have high adoption cost and will be expensive for small farms. The research is about understanding the agricultural sector of the country. This will help understand the supply chain in agriculture. The problem can be stated as to what and how is the country’s preparedness to adopt blockchain technology in agriculture. The country has a large number of small-scale farmers. They lack the basic requirements for farming. The problem is whether these small-scale farmers are ready for the technological change. The medium and large-scale farmers will adopt to this change but revenues may be affected. The hurdles will be discussed well in the literature. In addition, a proper inventory management is a cause of concern. These problems can be conceptualized from the operations management perspective. Integrating the concepts from inventory theory and blockchains may answer few of the problems. The purpose of the study is to check the preparedness of the country to adopt blockchain. This will be done by defining the hurdles in implementing blockchains in agriculture. This study focuses on the impact of blockchain on agricultural sector in India. For this it is important to study the driving factors in the agricultural sector. The next is to develop an inventory model using blockchains to manage the food grains to reduce wastage. 2. Background: This section of the proposal gives the background for the research. It is about highlighting the keywords of the research. The background of the research is dependent on the following keywords. These were the basis for literature review. Agricultural Sector India’s farm land is the second largest in the world. This makes agricultural sector of the country more diverse. Food grains management and distribution is a difficult at larger scale. The research proposal focuses on the food grains section. Blockchain Blockchain is a system that records information. This information is difficult to change or hack. Blockchain is a set of transactions that are distributed in the network. For the research the focus is on the inventory management network. The blockchain technology is a proper structure that stores all the transactions known as blocks. These blocks are linked in the network forming a chain. The blockchain formed is used to transfer information. This information is duplicated at various servers. This feature helps managing the inventory records efficiently. The blockchain technology uses similar to SAP which helps easy information management. This reduces the miscommunication in the supply chain framework. Blockchain makes data handling more efficient for inventories. Inventory Management Inventory is any item which can be stored for future and has future value. The scientific management of these items is inventory management. The inventory for the research is restricted to food grains. After the farm outputs managing inventory is a big challenge. The concepts from the inventory theory are useful for this. The base stock policy in inventory management focuses on stochastic demand and supply situations. This helps make stronger inventory decisions. Supply Chain Supply chain comprises all the activities from transforming the raw materials to its final stage. The final stage is the product that is delivered to customers. The final product is foodgrains for this research. The demand of foodgrains is generated every year. This demand is satisfied by the agricultural sector. The foodgrains are finally supplied as end product. 3. Literature Review The agricultural sector in India has changed over the decade. The farming technique has changed over the course of time. The technological advancement has brought subsequent changes in this sector. From having high-tech machines to smart yielding techniques, the agricultural sector is developing. The requirement in the present time is proper distribution of the agricultural products say food grains. Food grains distribution is an important task. The problem FCI faced was the improper planning and scheduling of movement of foodgrains. The researchers developed a mathematical model (Tanksale and Jha, 2010). This model helped FCI to plan monthly movement of food grains. This resulted in few types of warehouses with zero inventory by month end. This concept of the zero inventory was not working well. So, the researchers decided to find the lacunas of this supply chain (Sharma etal 2013). They chose to study the supply chain of rice distribution in India. They found that improper information handling led to inventory blocks. The concept of zero inventory soon failed. This created a bullwhip effect due to the affected forecasts. The researchers designed a collaborative supply chain framework. This resulted into reduction of inventory and logistics cost. Then a group of researchers criticized the model. According, to them the model was excluding the penalty factors in rail freight (Anoop et al, 2018). The researchers studied the foodgrains distribution system for the Food Corporation of India (FCI). They found various places across the country had high rail freights. This was reason to why the small-scale vendors were unable to transport food grains. The researchers conducted a case study in FCI’s Kerala Region, for 35 instances. This study was used to develop an optimal rake model. This model was a heuristic approach to the problem and efficiently reduced the rail freights. Many researchers observed that the pandemic affected rail transportation of food grains. This created supply demand shocks in the food grains distributions. The researchers aimed at improving the supply channel networks. The main focus was on procurement of food grains in India under uncertainties like the recent pandemic (Mogale et al, 2020). The studies by various researchers suggested that food distribution is still a concern across the country. Supply chain, logistics, inventory and information technology become driving factors for the food distribution across the country. These were the major areas highlighted by various researchers. These driving factors became the themes for the literature review. This driving factors formed the basis to study the agricultural sector from supply chain perspective. Supply Chain Supply chain became a major area of interest for ample researchers. The focus was on how to make a resilient and sustainable supply chain. The development of various models using the mathematical programming tools improved the supply chain. The pandemic made the researchers think from the e-commerce perspective. The online shopping and e-markets also attribute to food distribution (Soum Suvra Das, 2020). The pandemic made e-market as a dynamic part of the food grains distribution. The e-market had impact on the consumer behavior. This resulted in subsequent price fluctuations, implementing fair pricing contracts was one of the solutions. The information gap was a reason for sudden shocks in demands and supply. The implementation of the information technology helped reduce the sudden supply and demand shocks. Practicing decision support system concepts like SAP – LAP made the supply chain network more resilient in nature. The pandemic gave researchers a new perspective to look at the supply chain. Information technology was found to make the supply chain resilient and sustainable (Agarwal et al, 2020). Logistics The Indian population being the second largest in the world food distribution is a major challenge. Logistics was a cause of concern for various researchers. The supply chain networks were resilient but it increased the transportation costs. The distribution of food incurs higher costs. These costs can be reduced by managing the logistics aspect of the food supply chain. Many researchers focused on improving the distribution facilities. Transport and quality are important part in logistics (Tanksale and Jha, 2010). The focus is on reducing the transportation costs as well as maintain the quality of transport. The rail freight reductions did not guarantee the quality of logistics. The involvement of docking into agriculture was a feasible option (Shen et al, 2020). It was achieved with the help for information technology and artificial intelligence. The smart logistic units built made reduced the complex nature of distribution process. The decision support system was found effective in managing logistics. The concept of RFIDs reduced the communication gaps in the distribution process. This also improved the organizational performance (Kumar et al, 2020). Inventory Distribution of food grains requires a proper inventory. Inventory management is scientifically managing a product from raw material to its final output. The researchers used different inventory models for inventory management. These models helped optimization of the inventory (Narmadha et al, 2010). The inventory optimization was important for the fresh farms (Shen et al, 2020). The management of the fresh farms is important for the distribution process. This inventory problems were of interest to handful of researchers. The concept of superdocking was used in the agricultural sector. This optimized the inventory. Information Technology: The use of RFIDs managed the information through decision support system. This information technology being advanced still had drawback. The information management had several drawbacks. Few drawbacks were information loss due the system being hacked. Recent researches have shown that blockchains are effective way to handle the data. The blockchains will allow the system work efficiently. The blockchains protects the information transactions from being hacked. The data transparency and traceability were the reason where decision systems failed. The blockchain was used efficiently by few researchers to improve communication gaps (Tayal et al, 2020). The use of UAV with blockchain in agricultural sector will help manage the miscommunication problems (Maddikunta et al, 2021). The unmanned aerial vehicles will make information transaction easier. This will result in smart agriculture and help manage the food grains wastage. From the research articles over the decade supply chain had been a major interest area. Its dynamics was explained by different researchers in terms of its resilience and sustainability. The logistics management in supply chain was well discussed by several researchers. The instalment of smart logistic units improved the distribution of food grains. The transportation costs were also reduced and was a focus for many researchers. The reduction in rail freights helped the Food Corporation of India. The system being soon collapsed in the pandemic, there was need for some new perspective. The demand satisfaction by e-markets was a temporary solution. The SAP-LAP approach was found effective to manage communication gaps but failed in data security. The possible solution is application of blockchains in the agricultural sector. The blockchain will provide data traceability and transparency. This will reduce the data from being hacked. Inventory is still an area of lesser interest for several researchers. The literature thus gives the basis to carry out further research. This will help the researchers get the preparedness of the country to adopt the blockchains. 4. Methodology The literature review provides the basis for the further research. Supply chain and logistics were seen to be major interest for the researchers. Inventory being the interest of few, the research proposal focuses more on the inventory. The research proposal focuses on centralizing the inventory to reduce the holding cost of the fresh farms by adopting blockchain technology. Blockchains will help display the same set of data at different levels in the agricultural sector. This will resolve the supply demand uncertainties and will predict demands with more accuracy. The proper communication between these channels will reduce the food grains wastage, which is currently 20% per year. Research Design: The research proposal follows a quantitative study to approach the problem. The study focuses on how the collected data can be formulated to develop a model. The collection of the data will be from the Food Corporation of India. This data will give the general idea about agricultural sector before blockchains. The model will help manage the subsequent changes in the agriculture sector. The subsequent model will aim at balancing the supply demand cycle. This in result will bring minimal effect on the agriculture sector. In addition, the inventory model will help the food distribution much easier. Data Collection: The formulation of the problem requires a basis. This basis will be achieved from the literature and data collection. The data for past ten years will be collected from the Food Corporation of India and Food Distribution of India. This data will be for one particular region. The data collection will be done from the website. Additionally, data used by previous researchers will be taken into consideration. This would cover up the research gaps and provide a clearer viewpoint to the situation. Model Formulation and Analysis: The model formulation focuses on how to define the problem mathematically. The data collection is assumed stochastic in nature. The stochastic nature of the data can be formulated well using nonlinear approach. The model would be formulated using base stock policy and will also allow centralized distribution. This model will analyze different cases in the policy getting more closer to real scenario. In addition, this will reduce food grains handling cost. Analysis of the model will be done using the numerical and simulation techniques. Also, t the he heuristic and nonlinear approach will give the bounds to the problem. The mathematical model will be analyzed using MATLAB. This will make sensitivity analysis easier. The respective graphs will be plotted to showcase the results. 5. Conclusion Significance of Research: The research will prove to be useful to study the impact of blockchains on agriculture. The research is about adopting technological intervention in agriculture at grass root level. The implementation at the grass root level will help small scale farmers generate more revenue. Medium and large-scale farmers will be able to earn good profits. The concept of centralized distribution system will ease the handling of food grains ensuring reduced wastage. Also, it will create a tradeoff for the supply and demands. Limitations: The research model is developed for one particular region. The results for the other regions may vary due to the change in the demands and supply. The data collection may have different parameters for different region across the country. The transportation costs incurred may be higher. Future Scope: The researchers can look forward into implementing similar models in different regions. The model developed can be reframed as per the data availability. The research can be done to reduce transportation costs.