RESEARCH PAPER: THE ROLE OFI BLOCKCHAIN TECHNOLOGY IN ENHANCING SUPPLY CHAIN EFFICIENCY AND FINANCIAL INCLUSION IN PAKISTAN'S AGRICULTURAL SECTOR

Abstract

Agriculture is a cornerstone of Pakistan's economy, yet it struggles with significant structural inefficiencies, including poor supply chain transparency, limited financial inclusion for smallholders, and archaic record-keeping. Contributing nearly one-fifth of the GDP and employing a majority of the rural workforce, the sector's performance is intrinsically linked to national stability and food security. This research investigates the potential of Blockchain Technology (BCM) as a transformative solution to these systemic failures. Employing a quantitative and exploratory research design using advanced econometric modeling, specifically the Autoregressive Distributed Lag (ARDL) model and the Vector Error Correction Model (VECM), on time-series data spanning from 1992 to 2023, the study examines the long-run and short-run dynamic relationships between BCM adoption and key enabling factors. The empirical findings robustly confirm that Farmers’ Digital Literacy Level ($\beta_1$), Technology Adoption Rate ($\beta_2$), and Digital Data Availability ($\beta_4$) all have a statistically significant positive impact on BCM use, acting as essential policy levers. Conversely, the Barriers to Blockchain Adoption ($\beta_3$) exerts a significant negative influence, confirming infrastructural and regulatory bofllenecks.

Crucially, the VECM analysis reveals a highly significant Error Correction Term (ECT) of

-0.742, establishing a strong long-run equilibrium and indicating that over 74% of any short-term market disequilibrium is corrected each period. This research provides a novel, data-driven framework for policymakers to initiate evidence-based, blockchain-centric agricultural reforms, focusing on strategic investment in digital infrastructure, regulatory clarity, and targeted human capital development to unlock sustainable growth, financial inclusion, and enhanced food security in the world's fifth most populous nation.