BLOCKCHAIN | PART IV – Costs And Limitations Of Blockchain Technology In Seed Industry

Author: Praneetha Komuravelli

While blockchain technology offers transformative solutions for improving transparency, traceability, and efficiency in the seed industry, its adoption comes with significant costs and limitations. Understanding these challenges is crucial for stakeholders considering blockchain implementation.

1. High Implementation and Maintenance Costs

• Infrastructure Investment: Setting up a blockchain system requires substantial investment in advanced digital infrastructure, including secure servers, data storage systems, and specialized software.
• Development Costs: Creating a customized blockchain platform for the seed industry involves hiring blockchain developers and technical experts, which can be expensive.
• Ongoing Maintenance: Maintaining and updating blockchain networks requires continuous technical support, which adds to long-term operational costs.

👉 Example: Small seed companies in developing countries may find it financially challenging to adopt blockchain due to the high costs of system development and maintenance.

2. Complexity and Technical Expertise

• Specialized Knowledge: Blockchain technology is complex and requires specialized skills for implementation and operation. Many stakeholders in the seed industry, particularly small-scale farmers and regional distributors, may lack the technical expertise to understand and manage the system effectively.
• Training Needs: Employees, farmers, and supply chain partners need proper training to navigate blockchain platforms and interpret data correctly.

👉 Example: In rural areas of India, where many farmers lack digital literacy, adopting and managing blockchain systems without extensive training can be impractical.

3. Data Privacy and Intellectual Property Concerns

• Confidentiality Risks: While blockchain is transparent, sensitive business information—such as seed formulas, proprietary breeding techniques, and test results—becomes visible to all participants on a public blockchain.
• Intellectual Property Protection: Companies worry that sharing genetic data or breeding records on an open blockchain may increase the risk of intellectual property theft if not properly protected.

👉 Example: Indian seed companies developing hybrid rice varieties may be reluctant to adopt blockchain if their proprietary breeding data is exposed to competitors.

4. Scalability Issues

• Limited Transactions per Second: Blockchain networks may struggle with high transaction volumes, slowing down data updates and increasing lag in real-time tracking.
• Storage Challenges: As more data is recorded (e.g., genetic details, shipment records, and certification), blockchain networks can become bulky, making data retrieval slower and more expensive.

👉 Example: Large-scale seed production across multiple regions may generate vast amounts of data that could overload blockchain systems and slow down performance.

5. Regulatory and Legal Uncertainty

• Lack of Clear Policies: Many countries lack comprehensive regulations governing the use of blockchain in agriculture. This legal uncertainty makes companies hesitant to invest in blockchain-based seed tracking systems.
• Cross-Border Issues: International seed trade involves multiple legal frameworks, and there is no global standard for blockchain compliance in agricultural supply chains.

👉 Example: India’s Seed Act (1966) does not currently address the integration of blockchain technology, making it difficult for seed companies to ensure regulatory compliance.

6. Digital Divide and Limited Access

• Infrastructure Gaps: Blockchain requires reliable internet and digital devices for real-time tracking and verification. Many rural areas, especially in developing countries, lack access to these resources.
• Farmer Accessibility: Smallholder farmers may struggle to interact with blockchain systems due to a lack of smartphones or internet connectivity.

👉 Example: Smallholder farmers in regions like Bihar or Madhya Pradesh, where digital infrastructure is limited, may face difficulties accessing blockchain-based seed information.

7. Resistance to Change

• Traditional Practices: The seed industry has relied on conventional record-keeping and manual processes for decades. Transitioning to a digital, blockchain-based system may face resistance from stakeholders unwilling to adopt new technologies.
• Cost-Benefit Concerns: Some seed companies question whether the benefits of blockchain (such as improved traceability) outweigh the financial and logistical challenges of implementation.

👉 Example: Local seed cooperatives in India may be reluctant to abandon familiar paper-based systems in favor of complex blockchain platforms.

Blockchain technology has the potential to transform the seed industry by ensuring transparency, traceability, and trust throughout the supply chain. As a decentralized and tamper-proof digital ledger, blockchain records every step of a seed’s journey—from breeding and certification to distribution—ensuring that farmers receive genuine, high-quality seeds. This technology addresses critical issues in the Indian seed industry, such as counterfeit seeds, intellectual property theft, and supply chain inefficiencies. By enabling real-time tracking, automated smart contracts, and secure data sharing, blockchain enhances operational efficiency and strengthens seed certification processes.

However, despite its promising benefits, adopting blockchain in the Indian seed industry comes with challenges. High implementation costs, the need for technical expertise, regulatory uncertainties, and limited digital infrastructure pose significant barriers, especially for small-scale seed companies and farmers. Additionally, concerns regarding data privacy and resistance to changing traditional practices further slow adoption.

To unlock blockchain’s full potential, collaborative efforts are required between government bodies, seed companies, and technology providers. Investments in digital infrastructure, farmer training programs, and clear legal frameworks can facilitate a smoother transition. With proper implementation, blockchain can create a more transparent, efficient, and secure seed supply chain—ensuring better outcomes for breeders, suppliers, and farmers while fostering sustainable agricultural growth.

Read the other articles in this series:

• BLOCKCHAIN | PART I – Blockchain technology in seed industry
• BLOCKCHAIN | PART II – Real life examples of use of blockchain in seed industry
• BLOCKCHAIN | PART III – Challenges in implementation in Indian seed industry
• BLOCKCHAIN | PART IV – Costs And Limitations Of Blockchain Technology In Seed Industry