New investment in digital solutions will connect Latin American farmers to markets and banking services in response to COVID-19 restrictions

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New investment in digital solutions will connect Latin American farmers to markets and banking services in response to COVID-19 restrictions

Rome, 25 March 2021 – More than 10,000 family farmers in Latin America will soon have access to digital solutions to overcome the obstacles they face in accessing markets and financing due to the consequences of the COVID-19 pandemic, the UN’s International Fund for Agricultural Development (IFAD) announced today.

AGRIdigitalización is a project funded by an US$1.8 million IFAD grant from its Rural Poor Stimulus Facility, which was established to help rural populations in developing countries overcome the impact of the pandemic on their ability to produce and sell food.

Mobility restrictions put in place to contain the pandemic have affected many food supply chains and it has been difficult for small-scale farmers to access basic agricultural inputs like tools or seeds. Technical assistance activities have been interrupted for months and, with local markets closed and traditional transportation options reduced, their product commercialization has become even more difficult and expensive than before.

“COVID-19 has only increased some existing gaps in our societies. No doubt one of them is family farmers’ lack of access to markets and financial services. IFAD has been working for years to bridge this gap, something that is even more essential in this pandemic context,” said Rossana Polastri, IFAD’s Director for Latin America and the Caribbean.

“The future of the economy will be digital. This, which is already true for global and urban companies, will also apply to family farming. This project is about granting the region’s small-scale producers access to that future,” she added.

AGRIdigitalización will be implemented by a consortium of organizations led by Agriterra,  founded by the Dutch agricultural sector with a focus on cooperative promotion. The project will identify and evaluate existing digital platforms, applications, technical assistance and training services. The most suitable options will be adapted and made available to small producers’ organizations and rural saving cooperatives to help them undergo a digital transformation.

Through the project, 86 producer organizations will be able to market their products online and 132 rural savings cooperatives will be able to offer their financial services through digital platforms. The project will also benefit small internet companies run by young people which have a presence in rural areas, who will provide services to the producer organizations and rural savings cooperatives. In addition, 3,000 farmers will receive virtual technical assistance and trainings, and digital communication tools will be set up to replace in-person meetings.

“The digital world offers endless possibilities for family farmers to enter the financial and commercial market, solve communication problems and receive technical assistance. However, to take advantage of these tools, it is necessary to strengthen the management of cooperatives and train their members,” said Polastri.

“By strengthening cooperatives, farmers can lead the transformation of agricultural countries to modern industrialized ones, at the same time helping reduce unemployment, securing food and avoiding social conflicts. The more cooperatives a country has, the higher it ranks in the social progress scale. Professionalization of cooperatives is key for their success. They are more resilient to crisis and they can – and must – be a bastion for post-COVID recovery,” said Kees Blokland, Agriterra’s General Director.

The organizations participating in the project will achieve greater efficiency thanks to better time management, lower operating and transportation costs, access to new business opportunities, financial inclusion and better communication. They will acquire the ability to supply agricultural products and access production inputs in e-commerce environments, as well as to establish partnerships with companies already present in digital value chains and to have access to financial services through virtual systems.

With a focus on reaching women and young people, AGRIdigitalización will be implemented in Bolivia, Guatemala, Haiti, Honduras and Peru, and lessons learnt from the project will be applied to other IFAD-funded projects in Latin America and the Caribbean region at a later stage.

AGRIdigitalización will be implemented by Agriterra in alliance with Agros International, the Foundation for Rural Business Development (Funder) and the Inter-American Institute for Cooperation on Agriculture (IICA).

Press release No.: IFAD/14/2021

IFAD invests in rural people, empowering them to reduce poverty, increase food security, improve nutrition and strengthen resilience. Since 1978, we have provided US$23.2 billion in grants and low-interest loans to projects that have reached an estimated 518 million people. IFAD is an international financial institution and a United Nations specialized agency based in Rome – the United Nations food and agriculture hub.

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Juan Ignacio Cortes Carrasbal

Communications Division