Cooperatives and the Digital Transformation of Agribusiness

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The Brazilian agribusiness is on the contrary in the crisis generated by the pandemic of the New Coronavirus: while the economy, in general, suffers an intense blow, the field resists and accumulates several positive records.

In this scenario, the introduction of new digital technologies in the field continues to grow. AgTech Brazil Radar data point to a number of new startups, about 1125, in the agricultural sector in 2019 Research, a number that fatally must have grown in 2020.

Despite all these encouraging data regarding the use of digital technology in the field, there are still doubts about its application: is the entire Brazilian food production chain already in the world of digital technology? Do medium and small producers have access to the new technologies? Or is this kind of knowledge still restricted to farmers with higher conditions, or rather only to large rural producers?

Despite the advances made towards digital transformation, it can be noted that this reality is still concentrated in large and powerful companies that manage to set up private structures of connectivity. Small and medium-sized producers still do not seem to be walking the same pace as large properties.

For example, in some cases, livestock management is already all digitized, with online detection of animal conditions, monitoring of fattening, screening among many other technological advances. Connected machines, robots, drones, among so many other technologies, still seem a little distant from smaller producers. Over time, the use or non-use of these technologies tends to create an even greater productivity gap between large and small producers.

It is important for National Agriculture that even medium and small producers can access the advances of digital technology. One of the best ways to include more producers in the digitization process is through the importance of the role of agricultural cooperatives, which act as an intermediary between the knowledge of startups and technology companies focused on agriculture and rural producers.

Cooperatives are able to know the needs of the man of the field, while keeping up with the new technological trends of the field. An isolated rural farmer may even have ideas for digital transformation projects for his property, but he would not always be able to bank the capital for the development of technological projects individually.

An innovation backed by a cooperative, on the other hand, in which several producers with similar problems can benefit from the technology, makes the possibility of implementation and development a less arduous task.

Agricultural cooperatives usually have a stronger economic structure and thus become a factor of aggregation of forces (since cooperatives themselves already have the concept of Union of farmers with similar interests), since they allow new digital technologies to reach a much wider range of rural producers (through assistance, information and dissemination of new products).

Cooperatives in the diffusion of technologies

But what is the concept of a cooperative?

Cooperatives are organizations constituted by members of a certain economic or social group that aim to perform, for common benefit, a certain activity. In the case of agricultural cooperatives, they are usually founded when different rural producers come together with a common goal, such as expanding production, improving ways of product flow and sale, collective bargaining of inputs, among others.

The organizations do not keep the profit, always seeking that it is reverted to the maximum for the participating producers of the cooperatives.  However, there is a cost to the cooperated, either in monthly or percentage of the value obtained from the sale of the production.

In the Brazilian case, there are many agricultural cooperatives of great renown and with very strong coverage in different regions of the country, either operating in specific areas, or in production niches (such as poultry, cane, etc.). Some of them are (among many and many others):

  • Copersucar (largest exporter of sugar and ethanol-located in SP, but with national reach)
  • CooperCitrus; (Cooperative of rural producers-focused mainly on Orange Culture – interior of SP)
  • Friesland (Friesland Agroindustrial Cooperative-Sede Paraná-milk, meat and grains)
  • Cocamar (Maringá-PR, various sectors such as coffee, grains, seeds
  • Coamo (home field Mourão-PR. Largest cooperative in Latin America, various products)
  • Aurora (conglomerate of cooperatives, mainly focused on poultry, pigs, milk etc);
  • Cooxupé(Regional Cooperative of coffee growers in Guaxupé – MG).

Many of these cooperatives have already become giant companies in the branches in which they operate with businesses involving the entire agribusiness chain, from the beginning of production to stages such as harvesting, disposal, storage, sales , marketing to end consumers. Thus, even if some cooperatives have a gigantic size, cooperatives remain one of the closest and most reliable links in the relationship with the rural producer.

What is the impact of cooperatives on the digitalization of Agriculture?

Agricultural cooperatives are the closest link of contact of agricultural suppliers with rural producers, shortening this access, since it avoids the need for individual contacts. They have the knowledge and access to the information of the novelties and technological trends aimed at the man of the field, through their interfaces also with technology companies.

Thus, co-operatives have a great influence on the digital transformation of the field for some reasons, such as:

  • Proximity to the farmer:

Cooperatives can have a direct channel with their producers, whether through visits to cooperatives, visits of producers to the cooperative or even events. With this, they are one of the best interfaces, because they understand what the cooperated is looking for and what their problems are. The cooperative may not always have a ready-made solution, but it is the interface point with companies, such as startups and technology companies, that can bring options to solve the problem.

This proximity to the producer also allows the cooperative to have contact with various cooperators and discover the common problems between them. With this information, it can seek a solution that will help a larger number of cooperators.

For example, a machine monitoring solution can respond to the problem of multiple cooperates. Once the cooperative identifies a potential solution, it can search the market for existing products or suggest the implementation of new technological products to solve the problems of cooperators.

Thus, although a cooperator alone may not be able to bank an innovative project, several cooperators can benefit from the solution. With the intermediary of the cooperative, it is possible to serve more people at a cost prorated among the cooperated, being that a group of cooperating, or even the cooperative have a strengthened economic power.

  • Knowledge of the reality and need of producers

Cooperatives know better than anyone the reality of Agriculture in the region in which they operate: what the main local problems and possibilities to improve the working condition of their cooperators.

For example, a group of cooperates in the Brazilian cerrado may not have exactly the same problems as producers in the south of the country. Thus, while a frost prevention system may be essential for Southern producers, it may not have the necessary impact on the cerrado, given the low chance of frost-generating temperatures occurring in the region.

In very rough terrain, ultra-modern machines, with precision in the application of defenses, do not have the same impact as the use of drones, since many of this equipment can not traffic in these terrains.

  • Dissemination of technologies

When the cooperative understands that some technology can be of use to its cooperators, it can instruct its agronomists to suggest the use of new technologies or even create events such as field day. This type of event brings together producers in some property for demonstration of technologies in which the cooperative considers relevant to its cooperators.

  • Knowledge of the entire product chain

In many cases, agricultural cooperatives participate in the entire chain of certain products. Cooperatives that act specifically with birds, for example, know the pains from the breeding of chicks, to the sale and distribution of the products to the end customer on the shelf of the supermarket. With this, cooperatives are the best point of reference for observing the pains of each of the phases and, consequently, which technologies could be used in solving the problems.

Cooperatives have a much stronger structure in the search for partners for the development of new technological products. Artificial intelligence, Internet of Things, Drones, machine learning, precision agriculture and various other techniques to support digital transformation in the field are available at technology companies. Cooperatives are an ideal interface to find solutions to field problems with cooperators and connect their data with companies such as Venturus, who seek the best technologies available in solving problems in the field.

Conclusion

Technological innovations in the field are at a time of growth, given the favorable conditions of national agriculture (even at this time of pandemic), where several cooperatives have indicated a very strong economic growth, allied to the new technologies that are being implemented and that do not stop evolving.

However, these technological developments must also reach medium and small producers. A technological product to be implemented can be very expensive for a producer. However, in a group of cooperated, the same solution can be used by many producers. In this case, the implementation can be prorated among the various members. This type of solution is very interesting since the pain felt by the producer gives rise to a product and this can favor several producers.

With the information extracted from the field, it is possible to find a large part of the solutions to the problems of Agriculture, considering improved productivity, more sustainable productions or even solutions that facilitate the life of the rural producer.

Agriculture is global, but its practice is regional, since each place has its own specifics. The concept of the technology itself is the same, but the implementation is different. In this context, cooperatives have a prominent role in the interconnection of the needs of the field and the companies that develop the technology.

In terms of digitization, a study conducted by McKinsey Consultoria shows that the Brazilian farmer is even more advanced in technology than the American farmer. Although online shopping does not necessarily mean the use of digital technologies in the field, in Brazil, 36% of the farmers surveyed make online purchases for the farm, against 24% in the United States. That is, the Brazilian farmer is interested in knowing how technology can help in the field.

The digital transformation in the field is in full swing and it seems quite clear the importance of agricultural cooperatives in this path. Venturus continues to work firmly with its technological innovations in agriculture and has worked with cooperatives in order to accelerate the process of arrival of technological innovations in the field.

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