Incentives and rewards platform for continuous improvement of smallholder sugarcane farmers
Name of the project: Incentives and rewards platform for continuous improvement of smallholder sugarcane farmers, Brazil (Piracicaba) –Colombia (Valle del Cauca) –Uruguay (Bella Unión) –Paraguay (Department of Guairá)
Grant awarded: £30,000
Project budget: £85,740
Call for proposals theme: Innovating sustainability in smallholder sugarcane farming
Project lead: Solidaridad
Local partners: Alur, Cenicaña
Solidaridad is an international civil society organisation with over 50 years of experience in developing solutions to make agricultural value chains more sustainable and inclusive. In South America, it currently operates projects to promote the adoption of good practices in sugarcane in Brazil, Colombia, Argentina, Uruguay, Mexico, El Salvador, and Honduras.
The project is run in partnership with Raízen, one of the world’s leading sugarcane processing companies, and Koppert, a company providing solutions for the biological control of pests and diseases.
Purpose of the project
Solidaridad and its partners want to:
- Increase the uptake of sustainable practices in small-scale sugarcane production in line with Bonsucro’s Production Standard for Smallholders.
- Reward smallholder farmers for their contribution to more sustainable and resilient value chains, regardless of their actual capacity to achieve formal Bonsucro certification.
Engaging with smallholders on sustainability requires an understanding of how smallholder farmers lead with behaviour change and risks. Farmers are more likely to adopt sustainable practices when there is a clear business case that results in increased income or profitability. However, many of these benefits are in the long-term.
Solidaridad’s approach seeks to nudge farmers towards the adoption of better practices by providing short-term, tangible incentives combined with actionable recommendations for behaviour change. Any actor in the value chain will be able to invest directly, in the form of incentives and rewards, in improving smallholders’ sustainability performance.
To make this happen, Solidaridad will leverage its existing app Farming Solution, which enables farmers to record and share vital information on their farming practices. The app will be tied to an incentives and rewards mechanism, enabling farmers to earn and exchange “engagement points” for services and get compensated for their efforts. Farmers will access information and services needed to improve, get recognised for their progress and be encouraged to share their best practices to learn together.
The pilot will be implemented with 50 smallholder producers across four regions:
– Brazil: Piracicaba, the municipality with the highest concentration of smallholder farmers supplying sugarcane to Raízen’s mills.
– Colombia: Valle del Cauca, the region where sugarcane production is concentrated. A total of 2,750 sugarcane producers are responsible for providing 75% of the raw material for the region’s mills.
– Paraguay: 87% of the 20,550 farms that produce sugarcane are small-size farms with less than 20 hectares, mostly concentrated in the Department of Guairá (39% of the total sugarcane production area in the country) where the pilot project will be implemented.
– Uruguay: Bella Unión, where the only sugarcane ethanol production plant in Uruguay is located. The mill, owned by Alur, provides income generation opportunities to most of the population in the region. 100% of the sugarcane crushed by the Bella Union mill is produced by independent producers, 50% of which have less than 25 hectares.
Why this project?
The Bonsucro Impact Fund supports collaborative, scalable and innovative projects that accelerate sustainable sugarcane production.
Ultimately, the Farming Solution app will be available in Spanish and Portuguese for free download by any sugarcane farmer willing to engage in a sustainability journey. It will be easily adaptable to any language and local context, with no need for IT developments.
The evaluation of the incentive models will serve as a benchmark of successful actions and lessons for creating incentives and rewards for producers. The pilot could lead to creating larger incentives and rewards programmes.
The project combines information technology with behaviour science to effectively foster sustainability improvements in a way that favours farmers.
It aims to revolutionise the way producers learn and adopt good practices through a mechanism that creates value for them, while providing stakeholders with insights based on their specific needs and sustainability strategy.
Unlike other digital learning tools, it combines a pragmatic approach to continuous improvement with a simple and unbureaucratic incentives and rewards mechanism.
This approach using incentives isn’t limited to environmental impacts; it can be used to change behaviour towards any ESG outcomes.
The contextualised version of Farming solution is the cornerstone of the exit strategy, as it will be available for free download by interested farmers. To scale the incentives and rewards mechanism, additional technical developments will be needed but the methodology for identification and prioritisation of incentives will be made available for replication in other countries.
Solidaridad also hopes to further develop this approach with its partners beyond the end of this project and engage other partners.
In the long run, as more companies join and provide incentives and rewards, the mechanism could evolve into an impact marketplace that directly incentivises farmers to adopt better practices and increases transparency in the last mile of the supply chain.
- A user-friendly digital tool accessible to all sugarcane farmers in the selected countries, and replicable in other producing regions.
- A self-sustaining ecosystem connecting companies and other value chain actors with farmers through more direct investment and communication pathways.
- Increased uptake of sustainability practices in line with the Bonsucro Smallholder Standard.
- Higher contribution of supply chain partners to smallholder farmers’ sustainability improvements.
Bonsucro Impact Fund
The Bonsucro Impact Fund invests in impact projects that address critical sustainability challenges in the sugarcane sector.
The Bonsucro Impact Funds uses income from the sale of Credits through the Bonsucro Credit Trading Platform.
All trades are charged a transaction fee, around 50% of which is invested into the Bonsucro Impact Fund.
Learn more about the Fund and check for grants available here.
Bonsucro Credit Trading
By purchasing Bonsucro credits for sugarcane, ethanol, molasses and raw sugar, companies support impact projects on the ground through the Bonsucro Impact Fund.
Visit the Bonsucro Credit Trading Platform.
About the organisations engaged in this project:
With over half a century of activities in more than 40 countries, Solidaridad is an international civil society organization that has been active in the development of socially inclusive, environmentally responsible, and economically profitable agricultural chains. It proposes to accelerate the transition to inclusive, low-carbon production, contributing to food and climate security. It promotes partnerships and innovative solutions with governments, organizations, cooperatives, and companies to support men and women farmers to produce better and reduce the climatic impact of food production. Its mission is to ensure the transition to an inclusive and sustainable economy, which maximizes the benefit for people and the planet.
Reshaping the future of energy, Raízen has a broad portfolio of renewable solutions and a unique business model with products such as second-generation ethanol (E2G), biogas, biomethane and bioelectricity generated from 100% clean energy sources. Reporting net revenue of R$196 billion in the 2021/22 crop year and over 40,000 employees, Raízen operates 35 bioenergy parks and a network of over 7,900 reseller service stations under the Shell brand in Brazil, Argentina and Paraguay.
Koppert offers an integrated system of solutions for the biological control of pests and diseases, making the agricultural practice healthier and safer, allowing growers to improve quality and profitability. Each and every Koppert’s solution supports one goal: 100% sustainable agriculture.
ALUR (Alcoholes del Uruguay S.A) is an agro-industrial company in Uruguay that that produces biodiesel, bioethanol, animal food, energy, sugar and sweetener. Alur owns the only sugarcane processing plant in Uruguay.
Cenicaña, the Colombian Sugarcane Research Centre, is a non-profit organization founded in 1977 on the initiative of the Colombian Sugar Cane Growers’ Association, Asocaña, and financed by donations from sugar mills and cane suppliers located in the Cauca River Valley.