Industries in Depth

Brazil's smallholder farmers can benefit from digital traceability — here's how 

Smallholder farmers are important to Brazil's vast agriculture industry. As digital traceability requirements increase worldwide, here's how to ensure they are not left behind.

Smallholder farmers are important to Brazil's vast agriculture industry. Image: REUTERS/Bruno Kelly

Clara Clemente Langevin
Head, AI and Machine Learning, Centre for the Fourth Industrial Revolution, Brazil
Erica Dias
Senior Innovation Analyst, C4IR Brazil, World Economic Forum
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Agriculture, Food and Beverage

  • Digital traceability is becoming a critical part of the global agricultural supply chain.
  • Importers like the EU are moving quickly towards stricter regulations with digital traceability prerequisites for food product imports.
  • Smallholder farmers in places like Brazil may struggle initially to keep up — but, if given the right assistance, digital traceability can be a boon for them.

Digital traceability has become a cornerstone for sustainability in today's rapidly evolving agricultural landscape. Traditionally used to track a product's journey throughout its value chain to ensure food safety, product reliability and quality, traceability technologies are now used to provide product origin, farming methods and other ESG indicators.

Globally, consumers are shifting to a marked preference for food products that use sustainability metrics, causing an uptick in the availability of certifications and protocols to prove the traceability of sustainably sourced foods. On the other hand, governments, such as the European Union, are moving quickly towards stricter regulations with digital traceability prerequisites for food product imports. These requirements will significantly affect food export-oriented countries. Among the most affected will be Brazil, a top five producer of 34 agricultural commodities.

Although Brazil has reiterated its commitment to agricultural sustainability both on the global stage and through its national policies, there is growing concern among government agencies that smallholder farmers will be left behind in technology adoption and will face barriers to market if they cannot implement digital traceability technologies.

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Breaking traceability barriers: a case study from Brazil

In this context, the Center for the Fourth Industrial Revolution Brazil (C4IR Brazil), a World Economic Forum Affiliate, has created a series of recommendations for government agencies and other decision-makers to support the adoption of traceability technology in the field. Through interactions with over 100 stakeholders from diverse value chains like beef, cocoa and organic produce, C4IR Brazil has unpacked the specific barriers to implementation that Brazilian smallholder farmers face in adopting traceability technologies, which are as follows:

Data use: Many smallholder farmers expressed concern over how other entities along the value chain would treat their commercial and personal data. They cited concerns that their data could be used for unfair business practices and technology vendor lock-in, affecting their trust in traceability technologies.

Cost of investment: The high cost of digital technologies in the Brazilian agricultural landscape is a familiar barrier to implementation. However, it remains relevant for smallholder farmers' adoption of digital traceability. Although Brazil has several public policies, like the Safra Plan, which provides financing to smallholder farmers, none explicitly incentivizes traceability technologies.

Lack of expertise and training: Brazil has an intricate public-private ecosystem of technical field assistance providers. However, there is a low prevalence of programmes and experts on digital traceability to teach farmers why, when and how to use these technologies.

Technology fit: Farmers and other stakeholders expressed frustration that many traceability technologies needed to be more adequate for their specific region, value chain or digital maturity level.

Breaking traceability barriers for Brazil's smallholders

To move past these barriers and ensure that smallholder farmers can participate in the new sustainable agricultural market, decision-makers in both the public and private spheres should prioritize this policy issue through the following actions:

  • Data sharing regulation and governance either through a voluntary code of conduct, like the American Farm Bureau´s Ag Data Transparent Core Principles, or legislation. Regardless of the type of regulation, it should include provisions on ownership, portability, scope and limitations of the data collected and shared, among other elements, ensuring that every stakeholder along the value chain feels comfortable sharing their data for traceability.
  • Data standardization is essential to ensure farmers, technology providers and researchers can successfully leverage the Brazilian federal government´s vast open data portal and other datasets to create new technologies and traceability protocols.
  • Coordination between public entities, private entities, cooperatives and other relevant actors must happen to create capacity-building resources for farmers specific to product, region and digital maturity levels.
  • New financing models to facilitate technology adoption, such as blended finance initiatives, data monetization and data-based microcredit disbursement.
  • Initiatives that match technology providers with farmers to test new products for fit in different value chains.

These recommendations can be found in greater detail and Portuguese in C4IR Brazil´s publication “Multisectoral Policy Recommendations for Digital Traceability in Food Value Chains.

The C4IR Brazil is coordinating with government agencies, agricultural industry associations, civil societies and cooperatives to ensure the implementation of these recommendations. Programmes such as the Brazilian federal government´s Green Seal and Agro+ Sustentavel Program are attuned to how the pressure to trace can affect smallholder farmers, showing great promise that Brazilian Agriculture's future is sustainable and inclusive.

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