Blockchain-Based Approach for Crop Index Insurance in Agricultural Supply Chain

Abstract

Crop insurance serves as a crucial risk mitigation strategy for farmers facing uncertainties stemming from unpredictable weather conditions and vulnerabilities within the agricultural production process. Unfortunately, the prevailing traditional methods of crop insurance are laden with complexities, high costs, and, more critically, a lack of trust, which has deterred farmers from safeguarding their crops. Addressing these challenges, we present an innovative blockchain-based crop index insurance solution aimed at delivering multiple benefits. Our solution leverages blockchain technology to ensure unprecedented transparency throughout the insurance ecosystem. Every transaction and data exchange among farmers, insurers, and weather data providers is recorded on an immutable ledger, fostering trust, accountability, and confidence among all stakeholders. Moreover, blockchain’s inherent immutability and the use of smart contracts mitigate the risk of fraudulent activities in the crop insurance domain. Claims are processed autonomously, significantly reducing the possibility of fraudulent claims and enhancing the integrity of the system. One of the primary concerns of farmers, delayed claim settlements, is addressed by our solution. Smart contracts enable automated and prompt claim processing, ensuring that farmers receive timely payouts. Furthermore, our solution substantially reduces costs by eliminating intermediaries and streamlining administrative processes. This affordability democratizes crop insurance, making it accessible to a broader spectrum of farmers, including those in low-income countries. Our comprehensive approach integrates advanced algorithms for secure information sharing and interaction among stakeholders. We have rigorously tested the smart contract code under diverse scenarios using the Remix IDE, with the code’s availability on GitHub as a reference. Security vulnerabilities have been meticulously assessed and addressed. Thus, our paper presents an effective, low-cost, and trustworthy solution utilizing blockchain-based smart contracts to facilitate timely crop insurance for farmers. By enhancing transparency, reducing fraud, expediting claim processing, and increasing affordability, our solution aims to revolutionize crop insurance, making it more accessible and reliable for farmers worldwide.

Keywords

• Blockchain
• ethereum
• transparency
• crop index insurance
• agriculture
• smart contracts