Opportunities of Agricultural Expansion in Latin America

Adopting new technologies is booming in Brazil and Argentina, where agriculture is growing exponentially.

FREMONT, CA: Agriculture is expanding exponentially in Brazil and Argentina, where the adoption of new technologies is flourishing. These nations are global leaders in a variety of crops. From a net food importer, Brazil has become a significant exporter of agricultural products, with Argentine exports not far behind. Expanding into these South American markets can be difficult for startups and multinational corporations.

Brazil, a Large Market with Potential for Growth

Brazil has become the world's second-largest exporter of agricultural products, with soy, corn, wheat, sugar, meat, coffee, and ethanol leading the way. There are ample opportunities for growth in a country that ranks first in soybean and third in corn production.

Brazil's semi-arid farmland has been transformed from marginally unfarmable to the world's new breadbasket by the mass application of crop nutrients and microbials that reduce soil acidity and fix nitrogen and improve plant breeding. According to the University of Illinois, Brazil is the fifth largest country in the world and has the largest expandable land area of any country that already produces agricultural goods. Only 7.5 percent of the world's 868 million acres are used for crop production. Agriculture technology, government policies, and the introduction of crop biologicals are instrumental in propelling Brazil to the forefront.

Additionally, Brazil has quickly adopted and cultivated GMO seeds, advancing productivity and yield over conventional crops. 95 percent of the 65 million hectares of soy, corn, and cotton planted in 2021 were biotech varieties. Biotech varieties occupied 97 percent of Brazil's 38 million hectares of soybeans.

Argentina, an Agriculture Leader

Due to its expansive farmland and favorable natural conditions, Argentina is one of the world's leading producers and exporters of agricultural products. Seventy-eight percent of agricultural land is occupied by large-scale farms averaging approximately 1,500 hectares. Soybeans, corn, and wheat are the top three crops produced and exported by Argentina. Due to its favorable agricultural conditions, Argentina is the ideal testing ground for companies specializing in agricultural innovations such as biotechnology, crop protection, fertilizers, biologicals, seeds, and microbial ag inputs. These solutions enable businesses to expand by utilizing innovative technologies to cultivate food more efficiently, profitably, and environmentally friendly.

Global Industry Leaders in AgTech Adoption

Latin America is not only the world's fastest-growing region for biotechnology adoption but also the fastest-growing region for startup funding. According to the business intelligence leader Crunchbase, venture capitalists invested a record $19.5 billion in Latin American startups in 2017. That was more than three times the amount invested in the region's startups in 2020, making Latin America "the fastest-growing region for venture funding in 2021," according to the firm. Crunchbase is optimistic that the number of venture capital investments will increase in 2022 and beyond.

Access to high-speed internet has aided the rapid expansion of agricultural innovation. In 2018, 71 percent of Argentines used the internet, and mobile subscriptions were widespread. Brazil and Argentina are becoming regional leaders in agricultural entrepreneurship and innovation due to investments in digital infrastructure. Throughout the region's agricultural ecosystem, numerous digital agriculture startups are active and gaining traction. These startups also focus on marketplace platforms, agri-finance, and water management, among other things. Both nations illustrate the significance of an ecosystem that enables digital agricultural innovation to scale and fosters the development of small-scale entrepreneurs.