Artificial intelligence and technology solutions for the agricultural sector
Artificial intelligence and technology solutions for the agricultural sector
Business Model Description
Invest in the creation, operation, and management of software, platform, artificial intelligence and/or technological services for monitoring crops, preventing pests and other damages caused by climate change
Expected Impact
Increase sustainable production and provide a means of living to rural population while benefiting the environment
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Paraguay: Itapúa
- Paraguay: Alto Paraná
Sector Classification
Food and Beverage
Development need
76% of the total area of the country is used for agricultural activities. The agro-livestock sector is critical in Paraguay since, in 2010, this sector represented 28% of GDP (I).
Policy priority
The Ministry of Agriculture and Livestock made a Strategic Agrarian Framework in 2013. The objectives are, among others: strengthen the capacity of the agricultural sector and increase competitivity (II).
Gender inequalities and marginalization issues
Rural poverty disproportionately affects women and indigenous communities. Key factors contributing to poverty among family farmers include fluctuating prices, insufficient wages, low productivity, limited technology adoption, declining soil fertility, lack of access to financial services, among others (III).
Investment opportunities introduction
The opportunity to modernize family farming in Paraguay using more inclusive business models can accelerate poverty reduction, increase the productivity of the sector and help close inequality gaps (IV).
Key bottlenecks introduction
Paraguay faces infrastructure gaps that include high transport costs, limited connectivity, disparities in regional development, and health-related impacts (V).
Food and Agriculture
Development need
76% of the total area of the country is used for agricultural activities. The agro-livestock sector is critical in Paraguay since, in 2010, this sector represented 28% of GDP (I).
Policy priority
The Ministry of Agriculture and Livestock made a Strategic Agrarian Framework in 2013. The objectives are, among others: strengthen the capacity of the agricultural sector and increase competitivity (II).
Gender inequalities and marginalization issues
Rural poverty disproportionately affects women and indigenous communities. Key factors contributing to poverty among family farmers include fluctuating prices, insufficient wages, low productivity, limited technology adoption, declining soil fertility, lack of access to financial services, among others (III).
Investment opportunities introduction
The opportunity to modernize family farming in Paraguay using more inclusive business models can accelerate poverty reduction, increase the productivity of the sector and help close inequality gaps (IV).
Key bottlenecks introduction
Paraguay faces infrastructure gaps that include high transport costs, limited connectivity, disparities in regional development, and health-related impacts (V).
Pipeline Opportunity
Artificial intelligence and technology solutions for the agricultural sector
Invest in the creation, operation, and management of software, platform, artificial intelligence and/or technological services for monitoring crops, preventing pests and other damages caused by climate change
Business Case
Market Size and Environment
The department of Alto Paraná concentrates most of the planted soybeans area with 906 thousand hectares (2).
Indicative Return
15% - 20%
The estimated rate of return of Softwares (both the system and the application) for an investor is 16.26% (3).
Investment Timeframe
Short Term (0–5 years)
Currently, there are some artificial intelligence solutions being offered in the country. Also, on average, software projects take between 4 and 9 months to design and develop (4).
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Impact Case
Sustainable Development Need
Paraguay has almost 70. 000 grain producers responsible for more than 60% of the country's exports and about 17% of national GDP. Paraguay's agricultural sector is often hindered by low productivity, alongside restricted access to land, capital, and technology. Frequently, the farming methods employed are outdated, compounded by a lack of sufficient financial resources (5).
Droughts have been a constant for years and that time has already caused several losses and even already affected self-consumption productions. All products are being affected (6).
Gender & Marginalisation
Rural poverty disproportionately affects women and indigenous communities. Key factors contributing to poverty among family farmers include fluctuating prices, insufficient wages, low productivity, limited technology adoption, declining soil fertility, lack of access to financial services, among others (7).
Expected Development Outcome
Increase crop productivity levels and decrease crop sensitivity to climate change
Improve product quality and cost competitiveness
Reduce the use of pesticides and pesticides due to the early identification of problems in production
Gender & Marginalisation
Improve income level of producers
Primary SDGs addressed
2.4.1 Proportion of agricultural area under productive and sustainable agriculture
12.1.1 Number of countries developing, adopting or implementing policy instruments aimed at supporting the shift to sustainable consumption and production
8.4.1 Material footprint, material footprint per capita, and material footprint per GDP
8.4.2 Domestic material consumption, domestic material consumption per capita, and domestic material consumption per GDP
3.9.3 Mortality rate attributed to unintentional poisoning
Secondary SDGs addressed
Directly impacted stakeholders
People
Planet
Gender inequality and/or marginalization
Corporates
Indirectly impacted stakeholders
Public sector
Outcome Risks
The high price of artificial intelligence for the agricultural sector and the development of large producers through it, could increase technological gaps and inequalities in agricultural production (8).
Impact Risks
Execution risks: Lack of basic information on the field, since a lot of data is needed for this model.
Drop Off: Lack of knowledge of farmers about artificial intelligence solutions for crops and their impact
External risks: Internet penetration is low and the gap increases in rural areas (9).
Impact Classification
What
The outcome is likely to be positive because artificial intelligence solutions and the move to digital agriculture could improve productivity and increase incomes
Who
Farmers, producers and exporters
Risk
Although the model is proven, external factors, such as the need for adequate training and capital adequate human resources to use and interpret the data, can limit the extent of the impact
Impact Thesis
Increase sustainable production and provide a means of living to rural population while benefiting the environment
Enabling Environment
Policy Environment
National Development Plan 2030 - Its goals include, among others, strengthening the Paraguayan position among the world's leading food exporters (10).
Ministry of Agriculture and Livestock (MAG) - at Expo 2019, the MAG started with an interesting dissertation on the "Situation and Potentials of Organic Production in Paraguay" (11).
"National Strategy for the Promotion of Organic and Agroecological Production of Paraguay," during 2007/2008. This seeks to promote the development of organic and agroecological production in the country (12).
Financial Environment
The Development Finance Agency (AFD) - PROCRECER - Financing for investment projects. It finances projects such as - Rural, industrial, commercial, and service development projects (15).
Credit Agrícola de Habilitación (CAH) is a public entity that provides financial services and promotes technical assistance and marketing through alliances with the public and private sectors (16).
Exclusive credit for financing the national program of prioritized items for agriculture of the Ministry of Agriculture and Livestock (MAG). For investments directly related to productive activity, operating and marketing expenses at a rate of 10% per year on balance (17).
Regulatory Environment
Paraguayan Organic Production Standard. Production and marketing chain (12).
Resolution 670/13. Establishing and regulating the participatory guarantee system in organic production of plant origin and its processes within the framework of Law No. 3.481/08 on the Promotion and Control of Organic Production and its regulations (13).
Resolution 250/13 "Establishing registration and maintenance forms for operators and certification companies involved in the organic production system" (14).
Marketplace Participants
Private Sector
HEMAV, Bayer (pilot project)
Government
Conacyt, Ministry of Agriculture and Livestock (MAG), Ministry of Industry and Commerce (MIC), Ministry of Information and Communication Technologies (MITIC), National Development Bank, Centro Agrícola de Habilitación
Multilaterals
IDB, World Bank (WB), European Union, Development Finance Agency, JICA, Mashav, KOICA, GIZ
Non-Profit
Rural Association of Paraguay, Itaipú Technological Park Foundation, Tedic, Red Angel Investment in Paraguay.
Target Locations
Paraguay: Itapúa
Paraguay: Alto Paraná
References
- (I) Gobierno de Paraguay. 2014. Plan Nacional de Desarrollo Paraguay 2030. https://www.stp.gov.py/pnd/wp-content/uploads/2014/12/pnd2030.pdf (II) Ministerio de Agricultura y Ganaderia. 2013. Marco estratégico agrario. https://faolex.fao.org/docs/pdf/par179001.pdf (III) International Fund for Agricultural Development. 2016. Paraguay. https://www.ifad.org/en/web/operations/w/country/paraguay (IV) UNOPS. 2020. To grow, eat and sell: Modernizing agriculture in Paraguay. https://www.unops.org/news-and-stories/stories/to-grow-eat-and-sell-modernizing-agriculture-in-paraguay (V) OECD. 2018. Multi-dimensional Review of Paraguay. https://www.oecd.org/development/mdcr/countries/paraguay/Paraguay_Vol_1_Overview_En.pdf
- (1) Agencia de Cooperación Internacional del Japón & Coordinación Interinstitucional y Multisectorial de Contraparte. 2011. Estudio para el Desarrollo Rural Integral dirigido al Pequeño Productor EDRIPP. https://openjicareport.jica.go.jp/pdf/12041745.pdf
- (2) BASF. s,f, Cultivo de Soja en Paraguay - Tratamiento y Productos BASF. https://agriculture.basf.com/py/es/proteccion-de-cultivos-y-semillas/cultivos/cultivo-de-soja.html#:~:text=Las%20principales%20regiones%20productoras%20son,(18%25%20del%20total).
- (3) Aswath Damodaran. 2021. Current Data. https://pages.stern.nyu.edu/~adamodar/
- (4) Intersog. 2021. How Long Does It Take to Develop Custom Software? https://intersog.com/blog/custom-software-development-time/
- (5) UNOPS. 2020. To grow, eat and sell: Modernizing agriculture in Paraguay. https://www.unops.org/news-and-stories/stories/to-grow-eat-and-sell-modernizing-agriculture-in-paraguay
- (6) La Nación. 2020. Sequía e insectos amenazan cultivos: agricultores piden asistencia del Estado para evitar pérdidas. https://www.lanacion.com.py/pais/2020/09/30/sequia-e-insectos-amenazan-cultivos-agricultores-piden-asistencia-del-estado-para-evitar-perdidas/
- (7) International Fund for Agricultural Development. 2016. Paraguay. https://www.ifad.org/en/web/operations/w/country/paraguay
- (8) Tzachor, A., Devare, M., King, B. et al. Responsible artificial intelligence in agriculture requires systemic understanding of risks and externalities. https://www.nature.com/articles/s42256-022-00440-4
- (9) Sequera Maricarmen. 2020. Online education and the Internet infrastructure in Paraguay. https://www.tedic.org/en/online-education-and-the-internet-infrastructure-in-paraguay/
- (10) Gobierno del Paraguay. 2014. Plan Nacional de Desarrollo Paraguay 2030. https://www.stp.gov.py/pnd/wp-content/uploads/2014/12/pnd2030.pdf
- (11) Economía Virtual. 2019. Producción orgánica en Paraguay fue tema principal de ponencia. https://economiavirtual.com.py/web/pagina-general.php?codigo=23241
- (12) Ministerio de Agricultura y Ganadería. 2012. Plan Nacional Concertado de Fomento de la Producción Orgánica y Agroecológica. https://faolex.fao.org/docs/pdf/par210095.pdf
- (13) SENAVE. 2013. Resolution 670/13. http://web.senave.gov.py:8081/docs/resoluciones/senave/RES670-13.pdf
- (14) Decidamos Paraguay. 2017. Sistema Participativo de Garantía (SPG) para la certificación de la producción agroecológica. https://www.decidamos.org.py/wp-content/uploads/2019/11/SGP-web-min.pdf
- (15) Agencia Financiera de Desarrollo. s.f. Acerca de la AFD. https://www.afd.gov.py/que-es-la-afd
- (16) Crédito Agrícola de Habilitación. s.f. Misión y Visión. https://www.cah.gov.py/mision-y-vision
- (17) Agencia de Información Paraguaya. 2021. Fortalecer a productores mediante programas y facilitar el acceso a créditos, desafíos del MAG para el 2020. https://www.ip.gov.py/ip/fortalecer-a-productores-mediante-programas-y-facilitar-el-acceso-a-creditos-desafios-del-mag-para-el-2021/