Nelson Larrea
Ejecutivo Principal de la Dirección de Programación de Sector Privado
Agriculture, forestry, and land use directly account for approximately 18% of greenhouse gas (GHG) emissions. Expanding the analysis to the agri-food chain—including refrigeration, processing, packaging, and logistics—the figure rises to 25%. Moreover, according to Cornell University, global warming has reduced global agricultural productivity by 21% since the 1960s, thereby the sector contributes to global warming, which in turn affects its own performance, thus weakening food security even further.
Since the so-called “green revolution” in agriculture between 1950 and 1960, agricultural yields were aggressively increased in search of global food abundance. This movement was based on processes of technification and genetic improvement, achieving, for example, cereals that doubled their productivity per hectare. However, the process also involved a high load of agrochemicals and practices that degrade soils, which over the following decades have shaped the technological model now called “conventional.” The FAO maintains that between the 1960s and 1990s, the main source of crop production growth was due to yield improvements—attributing approximately 78% of these results globally to this factor, 7% came from increased crop intensity, and only 15% from the expansion of planted areas.
In Latin America, the expansion of areas accounted for up to 46% in that period, due to the greater "availability" of areas, quoted as such, since this likely includes regions that should not have been deforested, or that, in the absence of an economic-ecological zoning, were put under agricultural or livestock exploitation without proper planning. Even so, global production growth has primarily been driven by technical improvements.
However, precisely this production model, which rapidly increased yields, is today affected by climate change and, in turn, contributes to worsening it. Nevertheless, organizations such as the IPCC and FAO highlight that this is the only sector that, if restructured to increase CO2 capture, could become carbon negative by 2050, with an estimate of 3.4 GtCO2e/year. As part of the solutions, the current "revolution" proposes a mix of technology and sustainability. A study by Cornell University estimates that the application of additional agricultural technology could result in more than 13 billion metric tons of annual net negative GHG emissions. However, to achieve these figures, a shift towards more sustainable agriculture would need to occur on a large scale.
A clear indication that AgTech is growing in its development and application is that, if the trend continues, the size of this market would grow from USD 9 billion in 2020 to USD 22.5 billion in 2025, even though not all of its solutions are aimed at reducing GHG emissions or other sustainability goals, many of them do so directly or indirectly. By providing greater precision to operations, these applications substantially reduce the use of inputs – water, agrochemicals, etc. For instance, the use of moisture sensors for precision irrigation optimizes the use of water and energy and enhances the efficiency of photosynthesis, thus reducing the carbon footprint of a field.
Nevertheless, these technologies and the practices recommended by research and innovation bodies are still far from small producers, who generate 70% of the world's food. Therefore, it is urgent to intensify the capabilities and coverage of agricultural extension towards this segment, as well as the financing of innovations and their implementation. CAF has co-financed projects with the GCF that will contribute in this regard, one directly for climate-smart agriculture in Colombia, and another aimed at energy and land use projects with local financial institutions and SMEs in Chile, Ecuador, Panama, and Peru.
Finally, for farmers, becoming carbon negative can also mean financing opportunities through the voluntary carbon credit market, which, of course, still has a learning curve developing in this sector, but there are already a number of projects that are capitalizing on their transition to a more sustainable production model.
