Eliminating Intermediaries in Agri-Supply Chains: An Empirical Study of Blockchain Adoption and Market Efficiency

Abstract

Purpose: This research explores how far blockchain transforms agricultural supply chains by identifying and removing redundant intermediaries, transaction costs and improving market efficiency for smallholder farmers in India.

Methodology: A mixed-method empirical approach was adopted, which involved designing and administering a questionnaire to 247 primary stakeholders within supply chains (farmers, aggregators, wholesalers, retailers, technology enablers) in three Indian states - Karnataka, Tamil Nadu and Maharashtra - and conducting transaction-cost audits and semi-structured interviews in the field. Primary data (gathered in 2023-2024) were analysed using regression, paired t-tests and supply chain modelling.

Findings: Blockchain adoption resulted in an average 63.7% reduction in total transaction costs, a reduction in the settlement cycle from 18.3 days to 2.1 days and a move in farmer price share from 31.4% of the consumer price to 58.9%. The use of smart contracts removed leakages in commissions at various intermediary points. Blockchain-adopted supply chains exhibited statistically significant improvements in price and quality (p < 0.001).

Originality/Value: This is one of the rare, multi-state, empirical studies on blockchain-enabled disintermediation in the Indian agri-supply chain, filling the gap between the blockchain capability and adoption outcome on smallholder agriculture.