COVID-19 and Latin American agriculture: can innovation overcome the disruption?

Latin America and the Caribbean is the world’s largest net food-exporting region. Agriculture accounts for 6% of the region’s GDP and employs 14% of its workforce, a figure which rises to 24% when the entire food supply chain is taken into account.

What is more, Latin America is home to 16.5m family-run smallholdings. According to the Inter-American Institute for Cooperation on Agriculture, such operations account for 80% of the region’s production units, of which 56% are in South America and 35% in Mexico and Central America.

These producers, who typically have limited resources and transport options, are particularly vulnerable to the effects of the pandemic.

In light of such factors, 26 countries across the region signed a declaration in the early stages of the pandemic expressing their commitment to safeguarding the sector.

Released on April 3, this commitment included guarantees that governments would, among other measures, provide technical and financial assistance to small and medium-sized producers; ensure the regular functioning of wholesale markets; monitor logistics chains; promote the use of e-commerce platforms and applications; and guarantee that fiscal policies did not impede the normal functioning of regional food trade.

Partly thanks to such coordinated efforts, the region’s agricultural exports have proved relatively robust  – with some areas even experiencing growth.

For example, during the previous agricultural season – which ran from July 2019 to June 2020 – exports of Mexican avocados increased by 11% year-on-year (y-o-y). In Peru, meanwhile, food exports are expected to remain robust throughout the year after fruit exports from the country grew by 11.6% y-o-y between January and May.

''Lockdowns and the uneven reopening of the food service segment affected the produce industry,'' Álvaro Luque, CEO of Avocados From Mexico, told OBG. ''However, these events also created opportunities to realign strategies in order to grow the trade and retail markets.''

A key aspect of this has been the widespread expansion of e-commerce experienced in many countries

To take a representative example, in Costa Rica the Cooper Borbón cooperative, founded in 2015, expanded their e-commerce pilot project to fill supply chain gaps created by the pandemic.

Similarly, the Colombian government set up an online Mercado Campesino, or farmers’ market  – a centralised website that connects family farmers directly with consumers.

Going beyond e-commerce, a range of digital solutions to agricultural production have come to the fore during the pandemic.

For instance, some tech-oriented start-ups in Colombia have stepped up their operations in response to the agricultural challenges related to COVID-19. 

Projects such as Agrapp and Agroune provide web platforms that help producers access financing as well as develop sustainable practices, while INNTERRA uses data analysis to support producers in managing risk and incorporating new technologies into their practice.

Similarly, CurubaTech gathers agricultural data to improve productivity, integrating every aspect of the supply chain from producer to end consumer.

In Argentina, meanwhile, the start-up Kilimo provides an app that can reduce water consumption in agricultural operations by up to 70%.

Combining big data and machine learning to process substantial quantities of information, the system uses a straightforward interface to advise farmers of the optimum times to water their crops. As it is based largely on satellite technology, the platform has been able to maintain operations and growth throughout the pandemic.

Regardless of the disruption of the pandemic, new innovations continue to be developed in agricultural technology (agritech) across the region, catalysing investment and partnerships in the process. Chile’s AgroUrbana announced in June that it had completed a second round of funding, raising close to $1m and consolidating the company’s place as a regional pioneer of vertical agriculture – the practice of growing crops in vertically stacked layers, maximising productivity and minimising farms’ ecological footprints.

AgroUrbana opened Latin America’s first vertical farm in a suburb of the country’s capital Santiago in 2019. The farm’s pilot phase will conclude at the end of this year, and the company is set to launch a second such farm in 2021, which will use 100% renewable energy and for which they are currently raising funding.

AgroUrbana is also developing Carmelo, a digital platform that monitors and controls growing operations

Meanwhile, Moleaer, the world’s leading nanobubble technology company, announced in May it was partnering with Kapicua, a Chilean agritech provider, to expand into Chile and Peru.

A cost-effective and chemical-free solution, nanobubbles are tiny particles that remain suspended in water for long periods. They function rather like batteries, continuously releasing oxygen, and thereby improving growth and lowering time-to-harvest.

As is suggested by the ongoing uptake of such cutting-edge processes, Latin American agriculture may well emerge from the disruption of the pandemic with a medium-term boost in sustainability and productivity.