By Nayam Hanashiro Barrosa and Alejandro Pardo
Web3, the third generation of internet services that interconnects web applications while personalizing user experiences, has yet to reach most smallholder farmers in Latin America and the Caribbean. These workers face significant barriers to participating in the global value chains that this technology enables. High certification costs, such as credit history and traceability, limit market access and income improvement for a sector that provides livelihoods for three out of four of the world’s poorest people and contributes significantly to global food production.
AgroWeb3 is an innovative solution and a digital public good that uses blockchain and Web3 technologies to include smallholder farmers in global markets. It offers the potential to address challenges such as climate change, food insecurity, and inequality. This project is part of the Moonshots for Development alliance and is a collaboration between IDB Lab and the International Fund for Agricultural Development (IFAD) to empower farmers that aims to support and finance solutions that contribute to improving the lives of smallholder farmers and contribute to climate change adaptation.
The initiative builds on the success of the global LACChain alliance, which has reached over 9 million end-users with zero transaction costs through LACNet’s blockchain networks. The AgroWeb3 model implements a unique interoperable protocol and common standards for digital wallets. It enables instant and efficient credential verification, reducing costs and ensuring data ownership by farmers. In addition to facilitating access to global markets, it promotes competition among service providers, resulting in more affordable and universal solutions. This innovation has the potential to transform the relationship between smallholder farmers and real and financial markets.
Why Are Initiatives Like AgroWeb3 Important Today?
The data economy is radically transforming agrifood markets, and digital wallets allow smallholder farmers to own their data. AgroWeb3 is set to be a game-changer, empowering small producers to manage their provenance, production, environmental, and credit data, enhancing their commercial options, negotiating power, and decision-making in the Web3 era. It will enable bottom-up market creation, increasing farmers' commercial opportunities and bargaining capacity.
This pioneering project also represents a business development opportunity for the private sector, allowing market players to offer services within the AgroWeb3 ecosystem opening doors and opportunities for business internationalization and south-south cooperation.
AgroWeb3 reinforces the commitment of IDB Lab and IFAD to sustainable rural development, providing tools for smallholder farmers to lead the way in the digital economy and fully seize the opportunities of the Web3 era. Through IDB and IFAD-funded initiatives, the two organizations are focused on making these technologies not only more accessible but also more affordable to vulnerable and marginalized populations.
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