Startups Agro: Driving Innovation and Transformation in the Brazilian Fields

Brazilian agribusiness plays a fundamental role in the country's economy and on the global stage, standing out for its economic, social, and environmental contributions. Representing a significant portion of Brazil's Gross Domestic Product (GDP), approximately 21%, the sector is also a major job creator, employing millions of Brazilians across various stages of the production chain, from production to commercialization and distribution.

In recent years, Brazilian agribusiness has excelled in productivity and sustainability, thanks to the innovative profile of our farmers. Brazilian producers are among the fastest in the world to adopt innovative and sustainable practices such as precision agriculture, the use of inoculants for nitrogen fixation in the soil, biological pest and disease control, crop-livestock integration, preservation of riparian forests and permanent preservation areas, biological control, and regenerative agriculture. Advanced technologies like biotechnology, drones, sensors, artificial intelligence, and big data increase productivity, efficiency, and competitiveness in Brazilian agribusiness, making Brazil a global leader in sustainable agriculture.

This vigor is due to a unique combination of factors: young farmers, a robust scientific base in tropical agriculture, and the growing presence of agribusiness startups, or agtechs, which proliferate on university campuses and in various hubs, incubators, and tech parks across Brazil's five regions.

The Role of Agtechs in Brazilian Agribusiness

The 2023 Startup Blink report, which evaluates innovation ecosystems globally, places Brazil in the 27th position. However, in the field of agtechs, Brazil has the opportunity to become a major protagonist. Currently, Brazil is the largest Latin American market for agrifoodtech startups and investments, holding nearly 50% of the market share. With technologies that span the entire supply chain, Brazil is on its way to becoming one of the top three global agtech markets.

Cities with roots in agribusiness like Piracicaba, Ribeirão Preto, Jaboticabal, Londrina, Santa Maria, Uberlândia, and Viçosa already stand out as references in the universe of Brazilian innovations, driven by the concentration of agtechs, agricultural universities, and innovation centers.

The 2023 Agtech Brazil Radar identified 1,953 active agtechs, distributed across three segments of the agricultural production chain:

1. Before the Farm: 331 agtechs (16.95%) operate in areas such as credit acquisition, inputs, seeds, fertilizers, agrochemicals, tractors, and irrigation equipment.

   
   

2. On the Farm: 815 agtechs (41.73%) focus on agricultural production activities, farm management, water management, inputs, and planning.

   
   

3. After the Farm: 807 agtechs (41.32%) work in distribution, logistics, processing, packaging, wholesale and retail sales, and consumption.

Disruptive Technologies in Agribusiness

Brazilian agtechs are developing and implementing disruptive technologies that are transforming agribusiness. Some of these technologies include precision agriculture, agfintechs, artificial intelligence and big data, biotechnology, biologicals, marketplaces, automation and robotics, climatechs, etc.

These technologies developed by agtechs are already bringing numerous benefits to farmers, including:

1. Increased Productivity

• Harvest Optimization: Technologies like precision agriculture and drone use allow for more precise monitoring and management of crops, resulting in more abundant and higher quality harvests.

  
  

• Genetic Improvement: Biotechnology enables the development of new cultivars that are more resistant to pests and diseases, as well as increased crop productivity.

2. Reduction of Operational Costs

• Automation and Robotics: Autonomous machines and agricultural robots reduce the need for intensive labor and increase operational efficiency.

  
  

• Efficient Input Management: Sensors and IoT systems allow for precise application of fertilizers and pesticides, avoiding waste and reducing costs.

3. Sustainability and Natural Resource Management

• Efficient Water Use: Precision irrigation technologies help utilize water more efficiently, reducing consumption and conserving water resources.

  
  

• Soil Conservation: Practices like regenerative agriculture and the use of biologicals help maintain soil health, ensuring its long-term fertility.

4. Improvement in Management and Planning

• Big Data and Artificial Intelligence: Predictive analytics and data management systems enable farmers to make more informed and strategic decisions based on concrete data and weather forecasts.

  
  

• Integrated Farm Management: Agricultural management software helps control all farm activities, from planting to harvest and commercialization.

5. Access to New Financial Tools

• Agfintechs: Financial startups focused on agribusiness facilitate access to credit, insurance, and other financial services, helping farmers better manage their finances and investments.

  
  

• Innovative Business Models: Marketplaces and digital platforms allow for direct trade between producers and consumers, increasing farmers' profit margins.

6. Improvement in Product Quality

• Quality Monitoring: Real-time monitoring technologies help ensure that agricultural products meet the quality standards required by the market, resulting in more competitive products.

  
  

• Traceability: Tracking systems ensure transparency and food safety, allowing consumers to know the origin and journey of the products they consume.

7. Training and Education

• Training and Workshops: Many agtechs offer training and capacity-building programs for farmers, helping them stay updated with the latest technologies and agricultural practices.

  
  

• Access to Information: Digital platforms and mobile applications provide valuable information on weather conditions, markets, and agricultural techniques, aiding in decision-making.

8. Innovation and Competitiveness

• Access to Cutting-edge Innovations: Proximity to research and development centers allows farmers to quickly adopt new technologies and innovative practices.

  
  

• Global Market Competitiveness: The adoption of advanced technologies increases the competitiveness of Brazilian products in the international market, opening new export opportunities.

9. Positive Environmental Impact

• Emission Reduction: Sustainable agricultural practices and the use of efficient technologies help reduce greenhouse gas emissions.

  
  

• Biodiversity Preservation: The use of biologicals and integrated pest management techniques contribute to biodiversity preservation and ecosystem balance.

10. Promotion of Local Innovation

• Regional Development: The presence of agtechs and innovation centers contributes to the socioeconomic development of rural areas, creating jobs and promoting local growth.

  
  

• Integration with the Scientific Community: Collaborations with universities and research institutes strengthen the scientific and technological base of Brazilian agribusiness.

Success Stories

Several Brazilian agtechs are already making a difference in the field. Startups like Traive, Solinfitec, Terra Magna, Goflux, Scicrop, Cromai, and Krilltech have proven solutions available for Brazilian farmers in various areas mentioned above. Successful partnerships between startups and large agricultural companies, especially in the biologicals segment, are shifting the focus of R&D from the northern hemisphere to the southern hemisphere. Companies like Biotrop, Agrivale, and Superbac are receiving significant investments and leading the biologicals market in Brazil.

Large Brazilian farmers, such as SLC, Maggi, Scheffer, and Agroterenas, are investing in and promoting various companies, adopting innovative technologies, and fostering sector growth. 

Venture capital funds like SP Ventures, Yield Lab, and Rural Ventures play a crucial role in the agricultural innovation ecosystem in Brazil, providing the necessary capital for agtechs to develop their technologies and scale their operations.

With this entire ecosystem, the combination of a growing market, major technological advancements, sustainable practices, and government support creates a conducive environment for the emergence and success of agro startups.

The Challenges

Despite the opportunities, agtechs in Brazil face challenges such as regulatory and bureaucratic barriers, funding difficulties and capital costs, the need for workforce and farmer qualification, scalability, and infrastructure issues like logistics and connectivity. Overcoming these barriers will require a combination of government support, continuous investment, farmer training, and the development of adaptable and sustainable solutions.

The Future of Agro Startups

As an optimist, I firmly believe that the future of agro startups (Agtechs) in Brazil is bright. Driven by a favorable innovation environment, a growing demand for sustainable agricultural practices, and collaboration among various actors in the innovation ecosystem, Brazilian agtechs have the potential to transform agribusiness, not only in Brazil but worldwide, promoting more productive, efficient, and sustainable agriculture.

Please contact Christina Xie at christina@agropages.com if you would like to share your company story or advertising in the upcoming 2024 Latin America Focus magazine.