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Can Web3-enabled tokens drive regenerative ag adoption?

by Sophie Smith

Mercy Corps Ventures Pilots the Blockchain to Drive Adoption of Regenerative Agriculture in Kenya

Smallholder farmers in Kenya play a significant role in producing up to 80% of locally grown food. However, this number masks the challenges that these farmers face due to diminishing soil health and declining yields. Conventional agricultural practices such as synthetic input use, monocropping, and deep tillage have resulted in a deterioration of soil fertility in Kenya over the years. While many farmers are aware of the benefits of transitioning to regenerative practices, they are hesitant to do so due to the delayed payoff and limited access to regenerative inputs and services.

To address this issue, Mercy Corps Ventures has collaborated with Farm Star to launch a pilot program that aims to drive the adoption of regenerative agricultural practices among smallholder farmers in Kenya. Farm Star, a leading distributor of organic fertilizer in Kenya, has a customer base of over 10,000 smallholder farmers and a wide network of resellers across the country.

The pilot program introduces a customer loyalty program that incentivizes farmers to purchase Farm Star’s flagship product, Evergrow, a nutrient-rich organic fertilizer. What sets this loyalty program apart is the use of Web3-enabled reward tokens that are interoperable with third-party services. Farmers who purchase Evergrow fertilizer will receive reward tokens that can be redeemed for additional fertilizer or other products and services from partner ecosystem platforms. Farmers can even cash out the tokens to fiat currency via M-PESA, a widely used mobile money service in Kenya. This flexibility in redeeming the reward points aims to enhance their value and make regenerative agricultural products more attractive to farmers.

The loyalty platform will be available on both USSD menu and a downloadable smartphone app. Each bag of Evergrow fertilizer will have a unique identifier that farmers and agrovets can input into the app or USSD menu to redeem their reward points. By making the reward points interoperable, the pilot program seeks to increase their value for end-users and drive the adoption of regenerative agricultural practices.

The hypotheses of the pilot program include the belief that loyalty rewards programs can drive the uptake and adoption of regenerative agricultural products, leading to better environmental and business outcomes. This will be measured by an increase in the number of bags of Evergrow fertilizer purchased by farmers and the share of wallet for regenerative agricultural products in Kenya.

Furthermore, the pilot program aims to demonstrate that regenerative agriculture can result in higher output and profitability for farmers. By measuring the increase in yields/output and net income for farmers, the program will evaluate the impact of regenerative practices on farmers’ economic wellbeing.

Additionally, the integration of Web3 into loyalty programs is expected to enhance the utility of the reward points and improve customer satisfaction. The Net Promoter Score (NPS) of the rewards program and qualitative feedback on available redemption pathways will be used to assess this aspect of the pilot.

Sanergy CEO and co-founder Ani Vallabhaneni expressed excitement about the pilot program’s potential to drive the adoption of regenerative inputs and provide diversified financial benefits to farmers. He hopes that the financial flexibility offered by the loyalty program, enabled by the Web3 ecosystem, will support farmers in transitioning to regenerative farming on their terms.

Through this pilot program, Mercy Corps Ventures and Farm Star aim to incentivize smallholders to transition to regenerative agriculture while also testing a new model for organizations to enable partners to subsidize their customer rewards programs. Scaling this pilot could accelerate the adoption of regenerative practices, ensuring better food security and economic wellbeing for smallholder farmers.

Stay tuned for updates, evidence, and insights on other Mercy Corps Ventures pilots, responsibly testing Web3 solutions for unbanked and underbanked populations in emerging markets.

Source: https://agfundernews.com/mercy-corps-ventures-pilots-the-blockchain-to-get-cash-transfers-to-communities-ahead-of-climate-shock

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