The technological impacts of the pandemic on agribusiness

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In chaotic times like the ones we are currently living, with the impacts caused to society due to the New Coronavirus, the role of the farmer gains even greater relevance, to ensure that there is no shortage of food on the table of Brazilians, and for being the face of a sector that has been the motor of Brazilian economy. The result is that, in a chaotic year such as this, while forecasts indicate that the country’s GDP should collapse, agribusiness has an expectation of growth of 2.5%.

As for agricultural production itself, the pandemic does not seem to have fully affected the work in the crops. This is because agricultural activity, in its essence, does not generate large crowds of people or occupy densely populated places. Agricultural activity itself is sometimes quite solitary (since it usually occurs in remote places). Due to these characteristics, even amid the chaos of COVID-19, the Brazilian agricultural sector continues to excel economically.

However, not all agricultural crops and operations have emerged unscathed from the economic impact caused by the pandemic. Many producers, especially small ones, had problems marketing their products. Sectors such as floriculture felt the impact of falling sales and milk producers had problems with a lack of buyers, for example.

With this, many sectors have had to adapt to the new times and adoption of technologies, in many cases, has been accelerated and tends to remain, even with the return of times without a pandemic. The floriculture sector itself, which suffered at the beginning of the crisis, is already showing signs of recovery, with adaptations for the use of virtual auction technology and electronic commerce of flowers, connecting directly to its end consumers.

According to a study conducted by the Department of Agriculture of São Paulo, the pandemic caused animal and plant health to gain greater proportions, requiring greater control, monitoring and supervision, as it is a topic increasingly demanded by external and internal demand. The tracking and certification of agricultural products will be intensified, as well as the use of digital technologies such as Blockchain, in which secure markers ensure the origin and path of products from farms to the final consumers.

As in other sectors of the economy, in which many people who were not inserted in the digital scenario — teachers, students, schools, people who were only were accustomed to buying in physical stores, among others — forcibly began to use technology, in agribusiness, many activities that seemed to be far from the use of digital technology in mass scale began to inhabit this scenario.

This change will be felt in agribusiness even after the end of the crisis, with the presence of new technologies and innovation throughout the agricultural sector. The scenario established by the pandemic accelerated or even forced agricultural sectors that had not entered the digital area to be part of the digital transformation of agribusiness.

In addition to the acceleration of the use of technology in agribusiness, changes in consumer habits — orders by delivery system; many families have returned to cooking at home, demanding fresher and healthier products; farmer’s markets close to homes, among other behaviors —, due to the pandemic, should further leverage the use of the most diverse technologies in agribusiness.

Precision farming technologies, IoT (Internet of Things), sensors among other technologies that have already been highlighted in the digitization of agribusiness, even before the pandemic, are not the focus of this article, although they are at the heart of the technological revolution of agribusiness. This article aims to describe the many technologies that are likely to have an accelerated impact on agribusiness in response to the effects caused by the pandemic.

The technologies that the pandemic should leverage in the Agro

E-commerce

Trade in agricultural inputs traditionally believes that the relationship with agricultural producers should be closer, in the eye-to-eye, via physical sellers or regional distributors. E-commerce initiatives of agricultural products do not yet have, in the field, the same strength that the large online store magazines already represent in relation to the population. However, with the current pandemic, in many cases, online trading of products has become a new and attractive alternative. Just like in the city, many consumers who did not yet have the habit of making online purchases come to live with this situation in everyday life.

It is believed that the pandemic may have accelerated a process of online sales of agricultural inputs. In the same way that online commerce as a whole has been impacted extremely positively to the detriment of physical stores, the pandemic may have given a strong impetus to the adoption of online shopping in agro. The farmer, by using e-commerce, has immediate access to price quotation and the possibility to check conditions and prices of competing products.

In addition, selling companies can use Artificial Intelligence — an area of study that seeks to develop software that reproduces human skills such as voice and image recognition, content production and problem solving, in the case of agribusiness, identifying consumer consumption patterns of agricultural inputs – to understand what is the most appropriate time to offer the products they trade.

With data science, knowledge that goes hand in hand with Artificial Intelligence, it is possible to develop systems that can capture, for example, the moment when some farmer is about to make the purchase of an agricultural machine or fertilizer. Algorithms like the ones that large online trading companies use-which, when you search for an item you want to buy, soon offer many equivalent offers in your browser-could be adapted to agricultural consumers. Connecting to the client at the most appropriate time significantly increases the possibility of success in an agricultural trading. For example, a seller could more easily identify when the soybean farmer needs to buy seeds and then when he will buy fertilizers, defensives and all other inputs. A horticulturist, unlike a farmer of perennial crops, would have smaller purchases of input, but more distributed throughout the year.

In the area of agricultural inputs trade, setting the timing of product supply according to the timing of purchases of the producer is an extremely valuable tool. A large soybean farmer makes only a few fertilizer purchases during the year, but when he closes the purchase, he usually closes very high volumes. Thus, knowing how to identify this moment for the input company is very important.

E-commerce platforms and servers have been available for some time, but the pandemic has certainly pushed many potential customers to become more familiar with this service alternative.

Fairs / virtual events

Social isolation caused the cancellation of various agricultural events and fairs. However, many companies chose not to stand idly by and created online events for their potential customers in order to keep in touch with their audience even in times of isolation.

These virtual fairs allow, in many cases, a direct interaction of the visitor with the event. The technology allows visitors to be shaped according to the tastes and characteristics of each visitor. With creativity, you can create different experiences for each customer profile. This is all based on digital technology.

Applying concepts such as “gamification” (in which the user earns points when achieving the various phases or goals), it is possible to know whether the visitor of the Fair had an interest in seeing the explanation of some supplier, how long he observed the booth of a particular company and what events were not interesting to him. Individualized awards could be awarded when the visitor accessed specific content from sponsors, for example.

I do not believe that fairs or physical events will stop happening when the pandemic is over, but virtual events tend to become sophisticated and allow a differentiated experience for visitors. And with this, the company is able to interact and get very interesting data from each client, checking what interests and focus of each visit. According to data from Coopercitrus, the digital version of its traditional fair intended for cooperators had a 30% higher movement value compared to the physical Fair of the previous year.

Venturus felt an increase in demand from companies wishing to implement virtual events in the agro. And, in most cases, the focus has been to create customized solutions to customers, that is, solutions that try to pass the feeling of exclusivity to each customer, focusing on the interests of each one.

Product traceability

The topic of product traceability has been on the agenda in agribusiness for some time. However, what is noticeable with the pandemic of the New Coronavirus is that the demands of knowing the origin of the product, the path it has traveled, the treatments performed in it, the transactions performed and many other information have grown significantly both in the buyers of products, as well as in the final consumers.

And, within these transaction tracking and control technologies, Blockchain technology tends to be one of the main focuses. Blockchain technology works like a ledger of reasons that allows for a high level of data protection, with records of every action and transaction and immutability of everything that has been recorded. In addition, it allows secure storage of data and that this data is distributed.

A conglomerate of companies operating in the Brazilian agribusiness (ADM, Bunge, Cargill among others) is launching a project that hopes to be the largest Blockchain use project in agribusiness worldwide. In this case, the pandemic also only accelerated this process.

Some companies have already been developing traceability technologies of agricultural products with Blockchain, but isolated. The international pressure for the generation of increasingly reliable and robust mechanisms, accelerated by the pandemic, certainly starts to have a technological focus of greater importance, no longer being an option in the monitoring of products and becoming almost an obligation, such the demand for information that the most demanding post-pandemic consumers can seek in the products

Mobile Technologies

The isolation generated by the Covid-19 pandemic brought a major problem for many farmers, especially the smaller ones, in the aspects related to the commercialization of production. There were not a few cases concerning farmers who suffered great loss due to the problem of production flow.

In many cases, with social isolation, producers continued with their harvest (leaves, vegetables, etc.), but with the closure of Ceasas (regional horticultural supply centres), fairs and other businesses, production itself was not the bottleneck, but rather the distribution of products.

Among the field staff, the WhatsApp application is the most used and known. Many agricultural producers used the sale through WhatsApp and or Facebook, with home deliveries.  This type of communication helped many producers to have a channel of production flow and, with this, many farmers could notice the need for distribution channels with fewer intermediaries.

In this context, one of the great opportunities that technology could provide would be something like creating a home delivery application (such as iFood or Rappi) from the field. Producers, when they had their products available, could disclose their production, receive orders and receive infrastructure for the realization of deliveries. At the other point of the system, those interested in agricultural products could negotiate both price and form of delivery.

Social isolation will end, but alternative means of marketing production need to be thought out. In these new strategies, both the producer and the consumer gain, since they can reduce the amount of intermediaries in the business, increasing the income of the seller while allowing the consumer to purchase products from the agro fresher and at better prices.

Conclusion

The impact of the covid-19 pandemic on the world will not be forgotten anytime soon. The effects of post-pandemic changes throughout society will certainly influence many of humanity’s behaviors. In the agricultural environment, even if the economic activity itself has not been so impacted, some of the behaviors of actors in the agricultural landscape will certainly tend to change and many barriers that exist in terms of technology will be broken. The use of technology and its mechanisms of interaction between people should feel the reflection of these changes.

If digital technology had already undergone a revolution in the field previously, what is observed is that the pandemic will only speed up the process of digitization of the field. In addition to precision farming technologies, IoT (Internet of Things), sensors etc. — which have already been having a strong boost in agriculture (independent of the pandemic) and are being incorporated into Farmers ‘ Day-to-day lives -, several other models of communication and interaction between farmers, Commerce and industry must be accelerated (these, yes, with impulse of isolation) and, probably, arrive to stay.

Venturus works with technology and innovation in the digital area, as well as accompanying agribusiness as one of its main verticals. The company and its employees have extensive experience in developing mobile devices, developing complex transaction systems and acting with data science. The pandemic and post-pandemic world increasingly needs digital innovations also in the agro, both inside and outside the door.

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