Wednesday, 19 October 2022 03:12

IDB Invest highlights opportunities for agribusiness in report on digital transformation

Written by Evelyn Alas

Latin America and the Caribbean, one of the world's most important sources of agricultural products, can be key to alleviating global food shortages if it improves efficiency by leveraging digital solutions, a new IDB Invest report compiled with Accenture shows.

The report, "Digital Transformation of Agribusiness in Latin America and the Caribbean," includes a survey of 40 agribusiness companies in Argentina, Brazil, Chile, Colombia, Guatemala, Ecuador, Mexico, Paraguay and Peru. It concludes that digitization can help improve productivity, reduce costs, improve data-driven decision-making processes, and better manage supply chain risks. In addition, digital tools can help farmers increase yields and improve food security.

According to the report, Latin America and the Caribbean is still in its early stages of digital transformation, with the majority of organizations closer to a lower level, situated between those that do not have a digital transformation agenda in sight and those that recognize its importance and already have plans in place.

The agribusiness sector faces pressures, including climate change, price volatility and fluctuations in market demand, that must be addressed to remain globally competitive. It needs productivity improvements to cope with the world's growing population, as well as sustainability requirements that relate to the way goods are produced, such as food safety, health, environmental protection and fair working conditions.

In response, the agricultural industry is undergoing a major transformation that has been termed Agriculture 4.0. The term has been used to encompass the shift from traditional farming practices to leveraging digital solutions such as automation, remote sensing, precision agriculture, Big Data analytics and artificial intelligence.

The report states that to succeed in the digital age, agribusinesses must embrace change and invest in innovative technologies to stay ahead of the curve and compete in an increasingly globalized marketplace. For example, a 10% increase in the rate of digital ecosystem development represents a 1.4% increase in GDP, according to the Organización para la Cooperación y el Desarrollo Económicos (OCDE).

The new report was presented today in a webinar, with a discussion focused on how to help agribusinesses reach new levels of innovation and productivity through digitalization. An online course designed by IDB Invest to learn best practices in digital transformation for agribusiness was also unveiled.