As part of the Ashoka & Mutualist Society DWeb Learning Journey, we spoke with Ashoka Fellow Regi Wahyu about how he is transforming smallholder farming in Indonesia, using blockchains & NFTs to cut out middle-men, increase transparency and build new revenue streams. You can watch the full conversation here. Here are a few of the highlights.
Seeing the full picture
To get us situated, Regi began by giving us some context. In a nutshell: there are about 34 million smallholder farmers in Indonesia, who each manage about 0.3 hectares of land (3000 meters squares) of land. Most families live on less than USD $200 per month and their rates of financial & digital literacy are typically quite low. The closest banks are two to three hours from where they live, which means most don’t have bank accounts, let alone official land titles, making banks unwilling to provide them with loans. That leaves smallholder farmers particularly vulnerable to loan sharks, who charge 70-80% annual interest rates, perpetuating the cycle of poverty.
It’s in this context that Regi and his team at HARA looked for ways for to make farmers’ assets – rather than their “deficiencies” – visible. The first step was to help gather reliable and trustworthy data about the farmers, their land, production yields, and more. Here, Regi describes how they figured which data were most likely to enable farmers to break out of this cycle of exclusion.
Trusting the data & who owns it
Regi and his team started to experiment with blockchain technology in 2016-2017, not because of the hype around it, but because distributed ledgers allowed them to store data in an immutable way. In other words, they could make the data trustworthy in the eyes of banks and other institutions because once recorded and authenticated the information could not be tampered with.
The HARA team opted to build their permission-based distributed ledger, using ERC-721. Here's why:
Embedding technology within community
It was fascinating to hear Regi describe HARA’s sophisticated operational model at length. The information gathered by data agents – mostly local women equipped with smartphones – helps farmers access loans, insurance, seeds, fertilizers and more. Like many other social entrepreneurs, Regi and his team understand the centrality of embedding technology within an existing social fabric. If HARA had decided to simply deploy an app in rural Indonesia, uptake would have been nearly impossible. At the core of HARA’s success are local agents with existing networks of trust.
Expanding possibilities
HARA now serves roughly 37,000 smallholder farmers, who have increased their income by 36 percent annually. While that’s a significant jump, there’s still a way to go for them to enjoy greater financial stability. This is why Regi and his team decided to work with the farmers’ wives to cultivate ginger – a high yield, low input commodity. To finance the initial purchase of seeds, the team launched a new project Metaforest Society, powered by NFTs.
DAOs & closed-loop economies
With the NFT pilot in full gear, Regi and his team are already beginning to think about their path towards becoming a Decentralized Autonomous Organization (DAO). Regi anticipates that once the ginger pilot shows its results, the community will be interested in scaling the initiative. The idea is to move away from the existing “donation model”, where 10-20 percent of NFT sales go to social projects – and towards one where the sale of NFTs is directly linked to a “real-life” closed-loop economy.
For more check out the DWeb Learning Collaborative, convened by Ashoka & Mutualist Society