Using Blockchain to Tip Farmers Might Backfire

Yale SOM’s Saed Alizamir, a game-theoretic, warns about an unexpected eventuality that stems from apps that use blockchain to tip farmers or rather allow customers to tip farmers. A number of food apps track food supply chains, which makes it more convenient for customers to tip the farmer behind the produce they received. At first glance this might seem like a great opportunity, but a new paper indicates otherwise. In fact, this could have the opposite effect and reduce the farmers’ overall income.

It could either be responsible for making the agricultural firm lower the wholesale prices for produce, or it could lead to some farmers benefiting more from the tips than others, creating rifts and unfairness among farmers themselves.

So, although using blockchain to tip farmers in this matter would have been well-intentioned, it could have the contrary effect.