FAO Investment Centre

Closing the digital divide in Uruguay and Honduras

FAO and the the Inter-American Development Bank team-up

Smartphones, big data, artificial intelligence, the Internet of Things, precision farming – these and other digital technologies are helping farmers make better decisions and become more productive, profitable and competitive.

In collaboration with the Inter-American Development Bank (IDB), the FAO Investment Centre assessed the use of information and communication technologies (ICTs) in Uruguay’s agriculture sector.

Dennis Escudero, an FAO economist based in Panama, noted that several studies point to the “direct and positive relationship between the use of digital technologies and agricultural productivity and competitiveness.”

“Producers can improve their crop yields and animal production and increase their incomes, sometimes by up to 40 percent, by using digital solutions like smartphones, e-commerce platforms, precision agriculture, artificial intelligence, the Internet of Things, or a combination of these technologies. And greater productivity means greater food production and food security and also a more efficient use of natural resources such as land and water,” he added.

Challenges and opportunities

Uruguay is one of the most advanced countries in Latin America in terms of ICTs. Mobile phone and Internet usage are particularly high.

The country also boasts a favourable legal and institutional environment for digital innovation and adoption.

But while the country’s larger-scale farmers are using digital technologies systematically to improve productivity, Uruguay’s smaller family farmers have been slow to fully embrace digital agriculture.

Reasons include the limited digital education, especially among older farmers, farm size and insufficient knowledge of technological solutions and access to specialized technical assistance, to name a few.

But opportunities abound, including strong interest from the Government to digitalize different sectors, a dynamic private sector, the widespread use of smartphones and increasingly lower costs in accessing digital solutions.

Digitalization of agricultural systems

To assess ICT use in Uruguay, FAO interviewed numerous stakeholders, including farmers, producer organizations, extension officers, technology providers, universities, multilateral organizations, NGOs and government entities.

Using this information, FAO was able to propose concrete actions for incorporating ICTs into agricultural systems, extension, technical assistance and training to reach more family farmers.

Proposals include providing incentives for the development and adoption of ICTs to accelerate innovation processes in different agricultural value chains, as well as setting up a training programme on ICT use.

FAO also recommends greater dialogue and collaboration between producer organizations and ICT providers so that digital solutions respond to farmers’ needs.

“The use of digital technologies can accelerate innovation in different areas. The key is to make sure these technologies really add value and benefit farmers, especially smaller-scale farmers. Capacity building is also important, as we don’t want to inadvertently widen the digital gap,” said Wafaa El Khoury, an FAO Investment Centre service chief.

Strong trend in region

FAO’s technical assessment served as an input in Uruguay’s Ministry of Livestock, Agriculture and Fishery’s decision to allocate a subcomponent of an IDB-funded rural development programme to promote investments in digital agriculture.

The IDB is keen to expand this line of work with FAO in Honduras. There, the team is facilitating supply and demand by identifying national and international service providers and bringing them to the table with agricultural institutions and other private sector actors to discuss investment opportunities for digital agriculture.

In doing so, they are looking at the social, economic, environmental and institutional impact different ICTs would have on Honduras’ agriculture sector.

In March, the IDB held an international congress in Honduras on technological innovations in the agriculture sector (Agrotech), with the participation of renowned experts and service providers identified by FAO.

“The digitalization of agriculture is a very strong trend in the region. Future generations of farmers, whether small family farmers or large-scale producers, will likely use digital solutions in their day-to-day activities. We need to be prepared and understand the broader benefits, challenges and impacts that ICTs could bring to agricultural development,” said Ana R. Rios, a senior specialist from the IDB.