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Ahead of the World Agri-Tech South America Summit this June 29-30, we caught up with our speakers to discuss the latest developments in FinTech and their applications to the Agri-Food value chain.
Bernardo Fabiani, CEO, TERRAMAGNA, BRAZIL: “Two factors account for the lack of conventional credit in Brazilian agriculture: the historical subsidies, which drove out many of the usual financiers given the low interest rates in the countryside, and the lack of appropriate understanding and information in order to underwrite risk. Though the first one has been addressed for the time being (subsidies are at an all-time low, whereas the risk free rate in Brazil is low compared to its record), the second one is still a big question mark – not only regarding what data to use, but how to use it. In this sense, alternative datasets are enabling analysis with more simplicity and less bureaucracy on the farmer side, and more thoroughness and safety on the financier side.
Traditional companies, unlike start-ups, have slower and more bureaucratic processes. They still struggle to adopt new technologies and sophisticate their processes, as well as adapt underwriting and collection processes to the realities of agriculture. The input chain in Brazil, for example, is 74% self-financed, in other words, this portion of the market hangs on the supplier’s balance sheet. A TerraMagna, we are undoing the knot between product and financing. Therefore, the distributor need be concerned only with providing the input and not with financing – we provide the financing.
Innovation comes a lot from the technology that allows us to better understand the risk offered by the farmer and, if necessary, collect from that farmer in a better way. In this sense, the best way to reduce (or at least make justifiable) the risk aversion we see in usual financiers working with agriculture is to provide clarity about what is happening in the field and, naturally, have a well-built, self-explanatory track record. We, at TerraMagna, have a clear conscience that we are always the most correct, fairest option. For example, one of the farmers financed in Mato Grosso had in the previous season acquired his inputs through a full barter operation with a 6 months duration and was paying an implicit interest rate of 56% per year. With TerraMagna, he paid half that amount, being positively impressed by the increase of almost 20% of his margin.”
Daniel Padrão, COO, Solinftec, BRAZIL: “As people become increasingly more interested in how farmers grow their crops, not just what they grow, data becomes more and more capable of growing value for agriculture. When used correctly, data presents exciting new revenue generation possibilities, as a way of looking beyond yields for value creation.
Similarly, more sophisticated data within our industry can help to reduce risks for the producers and the industry at large. At Solinftec, our technology doesn’t just provide data to prove results, it guides farmers through the actions that produce results, mitigating risks across the food supply chain.”
Amanda Donohue-Hansen, Managing Director, CULTIVIAN SANDBOX VENTURES, USA: “Over the past year, I’ve been excited to see continued convergence and collaboration between fintech and agri-food technologies. Fintech can be a key enabler to scale new agri-food technologies, offering financial products to help growers finance investment in new advanced equipment, sustainable inputs and/or digital tools to help make their operations more efficient and sustainable. As well as new technology companies that are increasing the access and affordability of ag financing to small and medium-size operators. I’m looking forward to the upcoming summit to further explore opportunities to leverage fintech to advance great sustainability of agri-food production in Latin America.”
Luis Macias, CEO, GRAINCHAIN, USA: “Transforming the undercapitalized ag market needs to be a priority for all of us. We do not have a shortage of technology or capital, we just need to apply it correctly with the right vision to maximize the full potential available in the agricultural industry. We can help capitalize the agricultural market and give producers access to new liquidity options by using smart contracts that incorporate all participants and provide transparency. Fintech is an essential tool for tapping into this potential.”
Monica Saggioro, Partner, MAYA CAPITAL, BRAZIL: “The Ag industry is a big propeller of the Latin American economy. In Brazil alone, it represents almost a quarter of the country’s GDP, so technology has been a big catalyzer to enable higher productivity in the field, better financials to farmers and more sustainable practices across all levels.”
Flavio Zaclis, Founder, BARN INVESTMENTS, BRAZIL
“With greater access to finance and credit, growers will have a clearer perspective of available resources for production so that they can better plan and organize for the full financial needs of of the entire production period including seeding, growing and harvesting. With access to data and full transparency between producers and companies, the latter will be able to better plan and schedule its purchases in advance with their suppliers, reducing product availability, and operational risk. Access to credit and finance is fundamental since it allows producers to plan, manage and deliver production within the right timing and according to buyers’ expectations and production scale. ”
Fernanda Mello, CEO, DUAGRO, BRAZIL: “The expansion of Brazilian agribusiness depends on a technological revolution in agricultural credit. The producer needs a new source of financing, which will certainly come from the private sector”.
André Glezer, CEO, AGROLEND, BRAZIL: “Small and medium-sized farmers in Brazil are located in remote areas and are not properly included in the financial system. Agrolend uses big data to deliver bureaucracy-free financial products to those farmers, promoting the development of their communities and closing the productivity gap to very large farmers. Data is connecting the financial world with millions of farmers spread all over Brazil. With better access to sophisticated financial products, farmers can considerably increase their productivity levels, expanding their profits, and therefore improving the standards of living of their communities. Soon farmers will also have the means to upgrade their agricultural practices towards more sustainable farming.”
Join the experts speaking at the virtual summit including: Bernardo Fabiani at TerraMagna, Flavio Zaclis at Barn Investments, Luis Macias at GrainChain and Fernanda Mello at DuAgro, speaking on the ‘FinTech: Transforming an Undercapitalized Market’ at 4pm BRT on June 29. Daniel Padrão at Solinftec will share his insights on the panel discussion ‘Smarter Field System: Supporting Decision Making from Farm to Fork’ at 1.40pm BRT.
Plus Andre Glezer will pitch his solution during the Start-Up Pitching Session at 2.50pm BRT on June 29.
View the full program, speaker faculty and registration.