Although both Bill Gates, creator of Microsoft (MSFT), and Warren Buffett, acclaimed CEO of Berkshire Hathaway (BRK.B), have been outspoken detractors of Bitcoin as an investment option, they have chosen to invest in farms instead.
Buffett bought his first farm in Nebraska for around $10,000 before he from high school, and Gates has more than 269,000 tillable acres. Coincident with these investments is the fast use of blockchain technology in the agriculture sector, which has the potential to revolutionize agricultural operations and increase efficiency.
WalmartWMT +0.9%, Unilever, and Carrefour are just a few of the major retailers now using blockchain to trace the origins of food goods, drastically cutting down on the time it takes to do so. Blockchain is gaining traction in the agricultural sector, and numerous companies have emerged as pioneers in its implementation.
AgriDigital, IBM Food Trust, AgriLedger, TE-FOOD, Ripe.IO, Demeter, AgriChain, Ambrosus, GrainChain, and Etherisc are just a few of the leading companies in 2023 that will be utilizing blockchain technology in the agricultural sector. Food safety, traceability, efficient transactions, crop insurance, and other issues are just some of the problems these businesses are tackling with blockchain technology.
If you’re looking for exposure to the benefits of blockchain technology but don’t want to acquire bitcoin, stock options or angel investment in relevant companies could be a good alternative.
What’s the Deal with Agriculture?
The wealthy investors in farmland can be traced back to a famous quip by American humorist Will Rogers from the early 20th century: “Buy land. No more of that stuff is being produced. Return on farmland, after accounting for inflation, has averaged roughly 6% over the past 50 years.
Those with the means to purchase and hold large tracts of land might expect a steady return from this investment. 30% of U.S. farmland is owned by landlords who don’t grow it themselves, according to the U.S. Department of Agriculture, showing that many investors share the opinion of Buffett and Gates.
Though they may lack the billionaires’ huge wallets, regular investors can still get in on the farmland investment action by purchasing farmland shares or agricultural mutual funds, exchange-traded funds, or real estate investment trusts. You can buy these investments through a brokerage or retirement account, and if you do your homework, you can discover one that fits your needs.
The minimum investments for farmland on investment platforms like AcreTrader range from $10,000 to $20,000 for accredited investors. Meanwhile, the development of blockchain applications in farming has increased the profitability of buying farmland.
Transparency in the supply chain, traceability, smart contracts, payment systems, and quality control are just a few of the ways in which blockchain technology might improve the agriculture sector.
Transparency and traceability provided by blockchain technology can greatly enhance the food supply chain. Consumers can verify the authenticity, safety, and ethical production practices of the products they buy by tracking their supply chains. According to a recent research in Heliyon, “Food industries can minimize food frauds by real-time detection and relating outbreaks to their definitive cause.” Distributed ledger technologies, such as blockchain, allow for stricter and more practical regulation of food quality and safety in this way.
Small-scale farmers and agricultural growers, especially those operating in low-income areas, can also benefit from the increased efficiency and streamlined transaction processes made possible by blockchain technology. By making available blockchain-based trading platforms for agricultural products, farmers may build confidence among market players and guarantee fair prices for their commodities. According to the Helivon study, “the ground-level participants (farmers), the food processing industry, and the supply chain management system can all move to a single track using a blockchain platform.”
With the use of blockchain technology and smart contracts, farmers can more easily insure their crops and make claims. Farmers can benefit from blockchain’s ability to streamline the claims process by purchasing insurance against the risk of natural disasters and crop failures.
Thanks to blockchain technology, farmers and manufacturers can monitor their goods’ whereabouts at every stage of the distribution process. This is helpful since it tells you where and when something was grown or harvested, as well as who made it. The immutability of blockchain records makes them trustworthy and difficult to fake.
The fact that billionaires like Buffett and Gates would rather invest in farmland than cryptocurrencies speaks volumes about the long-term potential of this asset class. Investments in farms offer great options for those seeking to diversify their portfolios and invest in a stable, growing market thanks to the widespread implementation of blockchain technology in the agricultural sector. Capitalizing on this trend and potentially reaping the rewards of a booming business requires an awareness of the numerous applications of blockchain in agriculture and researching different investment options.