The application of blockchain technology to enhance the supply chain
management of small-scale farmers agricultural business.
CHIN ZHE GABRIEL
TP064294@mail.apu.edu.my
Abstract – Blockchain technology has
the potential to revolutionise
agricultural supply chain management,
especially for small-scale farmers who
encounter many difficulties in
conventional supply chains. This study
looks at how small-scale farmers can
improve their supply chain
management in the agricultural industry
by utilising blockchain technology. The
research investigates the possible
advantages, problems, and applications
of blockchain adoption in agricultural
supply chains by a thorough
investigation and research. The results
highlight how blockchain can boost the
efficiency, traceability, and
transparency to empower small-scale
farmers in their agricultural business
and maximise their profits.
Key terms
Blockchain technology
Supply chain management
Agriculture
Small-scale farmers
Business Information Systems
1. Introduction
Small-scale farmers are essential to the
world's food production, yet they
frequently face challenges related to
ineffective supply chain management.
With its transparency, efficiency, and
trust-building features, blockchain
technology offers a chance to
completely transform existing
procedures. In terms of frequent
activity like grocery shopping for
vegetables and farm produce,
blockchain offers the potential to
improve supply chain management, by
tracing the origin of food, and providing
transparency in food chains.
Additionally, it can help developing
countries' agriculture and open up new
markets for goods. Thanks to
agricultural innovations like blockchain,
access to fresh fruits and vegetables,
dairy products, and meat are much more
convenient. (Mohannad et al., 2022)
In order to offer advanced solutions for
small-scale farmers, this article
investigates the use of blockchain
technology in agricultural supply
networks. Blockchain has the potential
to greatly improve supply chains by
enabling more affordable and timely
product delivery, increasing product
traceability, improving relationships
between partners, completing
transactions, and storing data without
the need of intermediaries. (Gaur &
Gaiha, 2020). Furthermore, food safety,
market transparency, legal certainty
regarding land tenure systems, ease of
access to business financing and other
agricultural financing options, and
accountability for international
agricultural agreements could all be
improved by blockchain technology. It
could also streamline and integrate
agricultural supply chains. (Abujudeh et
al., 2022). All of which brings
abundance of benefits towards the
advancement of small-scale farmer’s
agribusiness.

2. Problem statement
Over the past few years since the start
of 2020 to end of 2022, Malaysia and
many other countries has been hit hard
by the COVID-19 pandemic, which has
particularly impacted small-scale
farmers especially in rural regions. The
Movement Control Order implemented
during the pandemic significantly
reduced the income of these farmers,
especially those in rural areas.
Additionally, small-scale plantation
farmers faced various challenges,
including exploitation and difficulties
with seeds, accessing markets, and
inefficient supply chain management.
These obstacles pose a threat to the
overall quality of the agricultural sector.
Given that this sector contributes 40%
of Malaysia's palm oil output, it
deserves increased attention and
support. Understanding and addressing
the needs of these farmers is crucial for
their development. (Abiddin et al., 2023)
These challenges pose a threat to the
sustainability and economic feasibility
among small-scale farmers. Limited
market access makes it difficult for
farmers to sell their produce to a variety
of markets and at reasonable rates,
which reduces profitability and creates
income volatility. Inefficient supply
chain practices lead to inefficiencies,
such inadequate stakeholder
coordination, or delays in the delivery
of produce, which makes it harder for
farmers to satisfy market demands and
maintain product quality.
Furthermore, farmers run the risk of
unfair business practices, price
manipulation, and a decline in supplier
and buyer confidence when there is a
lack of trust in their interactions and
transactions. By removing third-party
transactions, it removes distrusts among
members. When taken as a whole, these
difficulties threaten small-scale
farmers' capacity to support features for
food security and sustainable
agriculture development as well as their
ability to maintain a stable income.
(Dhillon & Moncur, 2023)
Besides that, crops face a threat of
seasonality and perishability.
Especially during monsoon or dry
season in Malaysia. Crops, thrives in
different types of environments,
particularly, fruits, vegetables, and
grains. Because of this, farmers have to
harvest their crops quickly in order to
prevent overripening or quality
degradation. The growing number of
produce and the need to get them to
market rapidly, however, make logistics
of distribution, storage, and
transportation are extremely difficult to
coordinate without the use of advanced
technology. (Shrotriya, 2023)
3. Research Aim
The aim of this research is to explore the
application of blockchain technology in
tailoring agricultural business solutions
and enhancing supply chain
management for the benefit of small-
scale farmers. It aims to find a new
technological solution for maximising
the profitability and increase efficiency
of small-scale agribusinesses while
tackling the challenges and obstacles
faced.
4. Research Objectives
To identify the requirements for
implementing blockchain technology in
small scale agricultural supply chains,
through analysing the infrastructural
lacking, organizational factors, and
environmental factors among small
scale farmers.
To develop a framework or model for
implementing blockchain technology in
agricultural supply chains, considering
factors such as scalability,
interoperability, and usability.
5. Research Questions
1. How can blockchain be applied into
the management of small-scale
agricultural businesses to enhance
transparency, traceability, and
efficiency?
2. What are the main obstacles and
difficulties that small-scale farmers face
when implementing blockchain
technology, and how may they be
overcome?
3. What are the possible financial
benefits and impact of integrating
blockchain technology into small-scale
agricultural supply chains?
6. Research Significance
The significance of the proposed
research has 4 main points:
1. Assisting small-scale farmers: A
large share of the world's agricultural
labour is made up of small-scale
farmers, who are essential to both food
production and rural economies. They
frequently encounter obstacles, though,
like limited market access, ineffective
supply chain management, and
restricted market access. The goal of
this project is to enable small-scale
farmers to overcome these obstacles
and participate more successfully in the
market by investigating the application
of blockchain technology customised to
their requirements.
2. Enhancing Supply Chain Efficiency:
Farmers may experience decreased
profitability due to food loss, increased
transaction costs, and ineffective supply
chain management techniques.
Blockchain technology offers an
answer by automating procedures,
lowering the need for middlemen, and
offering a transparent and safe platform
for tracking goods from farm to market.
The findings can help lower waste,
boost productivity, and increase
profitability along the entire
agricultural value chain by optimising
the supply chain. (Xia et al., 2023)
3. Agriculture: Sustainable agricultural
practices are essential for preserving
natural resources, reducing climate
change, and ensuring food security for
future generations. By enabling
traceability, transparency, and fair trade,
blockchain technology can promote
sustainable agriculture by incentivizing
responsible farming practices and
rewarding farmers for their
environmental stewardship. It also
gains more trusts from customers. The
research aims to explore how
blockchain can be leveraged to support
sustainable agriculture initiatives and
contribute to the achievement of global
development goals. (Panwar et al., 2023)
4. Innovation and Economic
Development: The use of blockchain
technology in agriculture has the
potential to boost new business ventures,
innovation, and rural communities'
economies. The research can help
small-scale farmers realise their
entrepreneurial potential and boost
economic growth in agriculturally rural
regions by giving them access to
cutting-edge technologies and market
prospects. Furthermore, blockchain
innovation can help create resilient and
inclusive rural economies by luring
talent and investment to the agriculture
sector. (Meena et al., 2024)

7. Proposed System Overview
In the proposed system as shown in
figure 1 below, IoT devices will collect
the data regarding the crops and upload
into the system, it collects the
environmental data of the crops like the
weather, humidity, soil quality and soil
growth, then it determines whether it is
ready to harvest or not. Once harvested,
the crops will go through packaging and
grading, crops in good quality condition
will be catered for packaging to ensure
customers get the best produce, the data
of the produce like harvest date, origin,
and price will then be recorded and
stored in the blockchain system. The
products will be tagged with RFID
chips that consists of that information,
the chips also serve as a product tracker
when the product is transferred from
one ownership to the other, the RFID
information is sent to the receiver first,
then it will automatically match with
the system if the received products are
correct. This whole process is done
through the application system.
(Showkat Ahmad Bhat, 2021)
Figure 1: Graphical overview of proposed system
Next, through the use of smart contracts
integrated into the blockchain system,
farmers can initiate transaction to the
distributor when conditions are met.
The product information like the
quantity, quality, origin, and destination
to the distributor securely without the
need of a middleman, it automatically
initiates the transaction between the two
trusted parties. (S. Madumidha, 2019)
The distributors also use the smart
contract to do transaction with the
retailers for the product to be marketed.
Smart contracts increase a supply
chain's efficiency, traceability, and
transparency and make it more flexible
in improving the relations between the
parties. With each ownership, the
owners scan the RFID at every stage of
the production process and updates the
information on the cloud-stored blocks
using a mobile app. Thus, the cloud is
crucial for block storage as well. The
validation, verification and transaction
are all done through the mobile/web
application. (S. Madumidha, 2019)
Moving away from the transaction part,
the retailers are responsible for the QR
codes generated and paste onto the
products, or displayed in the market for
customers to scan and view the product
details like origin, expiry date, quality
grading etc.
In conclusion, the whole process from
farming, harvesting, distributing, and
marketing are all traced through the
blockchain app system, it is also
secured as every procedure flowing
though the supply chain is trusted and
licensed with the food standard being
authorised by the government.
 Figure 2: Flowchart for proposed system

8. Flowchart elaboration

The application first allows licensed can determine whether to harvest the
and verified farmers to register and log plants or not. Besides that, the
in. Through the app, farmers can check application also provides smart
the conditions of their plantation contracts which handles the
through the IoT devices. Then farmers transactions, verification, and
validation of farmers to distributors and chips which is stored in the blockchain
distributors to retailers, it ensures that system. It allows for accurate and fraud
there are no third parties involved as it preventive product information.
is a blockchain technology. The app
also records and stores the trace of the
product through scanning of the RFID

Showkat Ahmad Bhat, N.-F. H. (2021).

Agriculture-Food Supply Chain
Management Based on
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