Advanced Science and Technology Letters

Vol.146 (FGCN 2017), pp.125-130

http://dx.doi.org/10.14257/astl.2017.146.22

A Framework for Blockchain Technology in Rice

Supply Chain Management

M. Vinod Kumar and Dr. N. Ch. S. N. Iyengar

Department of Information Technology,

Sreenidhi Institute of Science and Technology (SNIST),
{An Autonomous Institution under JNTU Hyderabad)
Yamnampet, Ghatkesar, Hyderabad- 501301, India
mvk2407@gmail.com, srimannarayanach@sreenidhi.edu.in

Abstract. As rice is a basic grain of food consumption in India, its integrity

during supply chain processes is always a major concern for the society. With
the rapid growth in the internet, a lot emerging technologies have been applied
in the rice supply chain system. However, all these systems being centralized
creates trust problems like fraud, tampering and falsifying information. The
blockchain technology which is decentralized not governed by any central
authority and distributed is the solution for the problems arising in the rice
supply chain system. In this paper, we will build a rice supply chain system
using blockchain technology which will assure safety of rice during supply
chain management processes.
Keywords: rice supply chain system, blockchain, centralized, decentralized and
distributed.

1 Introduction

In 2008, a person or a group of people known by pseudonym Satoshi Nakamoto

created “Bitcoin” a fully distributed digital currency using Blockchain Technology.
The Blockchain is a decentralized and distributed ledger that keeps records of digital
transactions in such a way that makes them accessible and visible to multiple
participants in a network while keeping them secure. As blockchain is a decentralized
database, no one regulates it or owns it, and once the data uploaded on blockchain, it
becomes immutable not allowing data to be tampered or falsify. Blockchain also
being a distributed ledger has a network of replicated databases making it not to
collapse, as in single point of breakdown making centralized system to be crashed.
Nowadays, businesses of all kinds are getting creative with the blockchain ledger, as
it can be used to track, record, and verify trades of virtually anything that holds value.
From e-commerce to cloud storage to voting, companies in all industries are
beginning to see blockchain’s potential and integrating this technology into their
functioning. One of such application is implementing this technique into our regular
rice supply chain system. In this paper, we will discuss what benefits could
blockchain brings to supply chain industries and how it will help in addressing the
problems related to rice supply chain management. The main objective of this paper is

ISSN: 2287-1233 ASTL

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Advanced Science and Technology Letters
Vol.146 (FGCN 2017)

to trace out the major issues in traditional rice supply chain management, logistics
industry and employ blockchain technology to resolve these issues.

2 Literature Review

Bitcoin first appeared in 2008 white paper [1] authored by Satoshi Nakamoto. The
white paper explained about a peer to peer electronic cash system called “Bitcoin”
that enabled online payments to be carried out directly without an intermediary like
banks or central authority to be present. The innovative technology behind bitcoin is
Blockchain. Bitcoin is only one of the thousandth applications that use blockchain
technology. As in traditional databases having a central authority or administrations
(like banks, government accountants) and taking care of all the transactions,
blockchain here provides a distributed ledger which has a network of replicated
databases which are synchronized via the internet and visible to anyone within the
network [2]. Blockchain network can be public and accessible to any person in the
world and also can be private with restricted membership as well [3]. Ethereum is
considered to be a second generation 2.0 blockchain technology. It was developed by
Vitalik Buterin [4]. It is designed in such a way that any person with a basic level of
computer skills can develop and deploy their own decentralized applications on to the
blockchain. It has its own cryptocurrency called “Ether” and own virtual machine
which is EVM (Ethereum Virtual Machine). Ethereum also has its own programming
language called “Solidity” which is used in coding the applications. Other than this
Ethereum gives an ability to build a “Smart Contract” which is an autonomous
computer system, written in code that manages executions between individuals on to
the blockchain [5]. These contracts are powered by EVM and Ether. Blockchain
platform also provides us to manage IoT devices [6]. Blockchain will also help in
developing a security framework that integrates the blockchain technology with smart
devices to provide a secure communication platform in a smart city [7]. Blockchain
can also be adopted in various supply chain management systems, to create a
decentralized network where it can provide transparency, security, neutrality and
reliability of all the operations taking place in a supply chain [8] [9]. Medium.io is a
start-up company which presented a technique of combining IoT sensor devices with
blockchain technology to regulate the efficient functioning of pharmaceutical supply
chain [10]. Rice supply chain plays a major role in supplying rice from farmers to the
plates of every individual. Lack of mutuality and co-operation between the members
involved in rice supply chain is the main reason behind its inefficiency [11]. Hence a
proper supply chain management system is essential for efficient production,
processing, distribution and retailing thus meeting the customer demands and
providing rice of premium quality [12].

3 Traditional Rice Supply Chain Model

The rice supply chain management follows the multi-stage supply chain system which
consists of farmers, middle-man agents or mundi, rice processing companies,

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distributors and retailers. Figure 1. Explains in detail the multiple stages involved in
rice supply chain and their functioning. The Primary stage of rice supply chain starts
with paddy farmers selling paddy to rice processing companies directly or indirectly
through intermediaries based on productivity and type of farmers. Basically, farmers
are of are categorized into two types Large Land Holders and Small Land Holders

Fig. 1. Rice Supply Chain in India

based on the area of land they hold in hectares. Small Land Holders sell their paddy to
mundi or procurement centers. From procurement centers, paddy is sold to Rice
Processing Companies. Large land holders can directly sell their paddy to rice
processing companies as they yield paddy in large quantity. Large land holders can
also sell their paddy at local yields on high demand. In rice processing company
paddy is being processed and converted into rice passing through multiple stages like
cleaning, husking, polishing, packaging and storing. After converting paddy to rice,
rice processing companies will sell rice to distributors and wholesalers. From here on
distributors will sell rice to retailers. In case of industrial buyers like restaurants,
hotels or caterers, they directly approach rice processing companies and purchase rice
in bulk or large quantity. Thus, rice reaches to public buying from local retailers or
wholesalers or supermarkets.

4 Application Scenario

Here we discuss an example application of integrating blockchain into rice supply

chain. All supply chain members mentioned above, should have to register themselves
in the system, and match their unique identities and digital profiles stored in the
blockchain system. The different phases involved in the rice supply chain are:
Production, Procuring, Processing, Distributing and Retailing.

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4.1 Production

At production link harvested paddy is packed in bags and labeled with tags and
entered into the blockchain with a digital profile. The key information regarding the
paddy is stored in these digital profiles, which includes background environment in
which paddy has grown like soil, water, area, season etc, quality of the seed, growth
conditions, planting time, plucking time and information regarding fertilizers and
pesticides used for the yield of the crop. After that, a new trade is initiated between
the farmers and the intermediaries or rice processing companies where the product is
exchanged after signing a digital contract (Smart contract) that is stored on the
blockchain through handheld tag reader and wireless network.

Fig. 2. Blockchain Framework for Rice Supply Chain

4.2 Procurement

At procurement center or mundi, digital profile of the product is updated by providing

information related to warehouse and transportation of paddy from farmers to
respected rice processing companies.

4.3 Processing

After receiving paddy, rice processing enterprise will convert paddy to rice. The
information regarding the processing stages like cleaning, husking, polishing, storing
and packing is stored on to the digital profile of the product.

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4.4 Distribution

After receiving packages of rice from rice processing companies the information
regarding the quality, storages, logistics and distribution is been continuously updated
on blockchain at specific intervals by the distributors, such that it will keep track on
all the activities of distributors while supplying rice to retailers.

4.5 Retailing

When retailers receive rice bags, they nearly obtain all the information by scanning
the tags installed on packages of rice. As all the information of rice is stored in its
digital profile on the blockchain, anyone with a software linked with blockchain can
obtain all the details and audit all the activities involved in the supply chain of
particular rice.

4.6 Benefits of the Blockchain Employing into Rice Supply Chain Management:

 Ensures integral traceability, fight fraud and minimize the system errors as it
provides traceability of rice by recording all the events happening in the
supply chain.
 Every time rice changes the hand, the information is uploaded on the
blockchain. Thus, creating a permanent history of the rice from manufacturer
to sale.

5 Conclusion

In this paper, we presented a theoretical study on the blockchain technology and how
various industries would get benefited by implementing this technology into their
business practices. An example scenario is shown, which demonstrates how a
decentralized system based on blockchain technology assures the product safety in
supply chain management, and helps in increasing the efficiency of rice supply chain
by providing a traceability system which record all the events happening within the
rice supply chain and monitor security and quality of the rice. As food safety is the
primary concern of every individual, hope blockchain technology is employed by
every food supply chain and assures a delivery of quality product to the public.

References

1. S. Nakamoto, “Bitcoin: A Peer-to-Peer Electronic Cash System”,

https://bitcoin.org/bitcoin.pdf, white paper, (2008).

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2. G. Zyskind and O. Nathan, “Decentralizing Privacy: Using Blockchain to Protect Personal

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