Corteva, Cubo Itaú announce partnership in Latin America
Mar. 16, 2020
“We are an innovation-based company that is 100% focused on agriculture. From an early stage, we have understood that it is important to establish a partnership that would enable us to access innovations adopted in other sectors and, therefore, identify solutions that can be adopted to our market,” explained Douglas Ribeiro (Marketing Director at Corteva Agriscience).
According to Pedro Prates (Co-head of Cubo Itaú), the partnership with the company will bring new possibilities in terms of expanding channels of cooperation with startups in the sector. “Corteva will be the first agribusiness company to join Cubo, a strategic partnership that will strengthen the development of AgTechs in the country. This partnership will allow us to look at agribusiness, a scenario that is new to the hub, as well as establish assertive connections and highlight of importance of national and global scenarios.”
At its first stage, the partnership between Corteva at Cubo Itaú will focus on three major challenges experienced by rural producers in Brazil, which are access to credit, the use of bartering and training small farmers.
Credit and Barter
A survey commissioned by the Confederation of Agriculture and Livestock of Brazil (CNA) and conducted with rural producers across the country in 2019 showed that for almost 60% of respondents, rural credit is the most demanded service in the countryside. In addition to this data, according to a study commissioned by Corteva and carried out by the consultancy company, Spark, 50% of producers are required to use their own resources as their main source of financing for purchasing inputs, seeds and pesticides.
The difficulty in accessing credit is a barrier to the development of agribusiness in Brazil, whether due to the high level of bureaucracy and requirements, the deadline for receiving payments, or the difficulty in assessing risk, especially as it is a sector that is so dependent on the climate.
“As an industry, we have the challenge of looking for more agile, modern and digital business models to facilitate access to credit for rural producers, through tools that enable differentiated risk assessment while considering factors such as productivity history, regional profile and average default levels, not just financial data. Startups can help us, through solutions already adopted in other sectors,” Ribeiro said.
Still in terms of access to financing, bartering is another challenge for the industry. In agribusiness, it is a financing mechanism in which the payment for inputs is made through the delivery of grain in the post-harvest period without monetary intermediation. It is a tool that mitigates risk and trades in the producer's currency.
But bartering also faces several challenges. The processes are still very bureaucratic and involve several players, making it difficult for farmers to access this tool. Also, according to Corteva’s study surveying resellers and cooperatives, bartering represents about 20% of payments. “In this sense, the collaboration of Cubo Itaú’s startups can be instrumental in creating solutions that will help us to create an efficient and agile digital workflow. We can even develop solutions that can be taken to other countries,” Ribeiro added.
Training small farmers
The third major challenge, which will be Corteva's focus at Cubo Itaú, is to scale up a social-economic project called Prospera, which aims to train small farmers working with corn (grain) and silage.
The program started in 2017, in Pernambuco, with a group of 45 participants. Due to its considerable impact on the productivity of crops and the commercialization of production, in 2018, the program trained 428 participants and, in 2019, this number reached 927.
With Prospera, small producers had access to high-level technical knowledge that allowed improvements in their corn crops and in the commercialization of their production. This transformation increased their income, and productivity jumped from 10 bags per hectare at the start of the program to an average of 80 bags per hectare. The highlight is a farmer who, in 2019, broke the record of 125 bags per hectare.
“There are still producers with low technical knowledge in Brazil, without access to markets and lines of financing. These factors hinder the development of agricultural production in these regions and decrease the quality of life of local communities. Our goal is to scale up Prospera, train 50,000 small farmers and connect them with the value chain of corn production and marketing. However, to do that, we need tools to help us in this process. And here, once again, comes our partnership with Cubo Itaú and the startups that are residents of the hub,” Ribeiro explained.
Corteva Agriscience's partnership with Cubo Itaú is another step towards improving the lives of farmers and consumers, ensuring progress for future generations.
The original Portuguese version of this article is from GRUPO CULTIVAR.
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