Towards Sustainability of Agribusiness in Latin America and the Caribbean

In 1997, the EurepGAP (Euro-Retailer Produce Working Group for Good Agricultural Practices) standard entered into force, an initiative of the European retail sector that sought to ensure food safety, a low environmental impact and the health, safety and welfare of workers and animals in their supply chains. After a series of changes and improvements, it spread internationally, and was renamed GlobalGAP in 2017, developing a harmonized and independent certification system that is present and widely accepted by food chains of 135 countries.

In its early days, however, small producers in Latin America and the Caribbean (LAC) involved in agro-exports had serious difficulties adopting the standard and remaining in supply chains. As usual, many of the standards that are established based on the requirements of the last link do not always take into account the functioning of the productive systems at the origin, and are based on a series of preconceptions associated with the high standards that are more familiar to them.

This, of course, can result in highly exclusionary rules if they are not tailored to the reality of many producers who require time and gradual adjustments in their production processes in order to meet the required standard. In 2007, CAF, through its Competitiveness Support Program, Promperú and the NGO CICAP, put in place a process of learning and support in the field for small producers of export mango from Lambayeque in Peru and regional support entities in order to achieve GlobalGAP certification.

However, with this and a few other exceptions, those family producers not participating in agro-export chains—the vast majority of contributors to food security in our countries—are far from reaching similar production standards or productive chains.

According to FAO, farms smaller than 1 hectare represent 70% of the 600 MM agricultural units globally, and more than 1000 MM people rely on their crop yields for survival. In LAC, 81.3% of rural farms are family ventures, employing more than 60 million people, the largest source of agricultural and rural jobs. 

During the recent COP 27 the AIM for Climate Mission announced an increase in investments of more than USD 8 billion for the agri-food sector, higher than the announced 4 billion of the previous COP, with the support of 275 governments and non-governmental partners. Similarly, UNFCCC and FAO launched an appeal to investors for USD 17 trillion, in assets that should consolidate a global roadmap to achieve the goals against climate change, but also ensuring—and above all—SDG 2, food security. This is within the scope of the FAST (Food and Agriculture for Sustainable Transformation).

Previously, we have mentioned in this space the challenges facing LAC in adapting its value chains to the European Green Deal, and to the opportunity of the cooperation resources that could help countries in this green transition, becoming more resilient in the face of climate change. Nonetheless, with few exceptions, e.g. Argentina, Brazil, Costa Rica or Uruguay, most LAC countries have institutional structures with many limitations to serve the sector. And this not only based on their budgets and competences for research or policy and program design, but particularly, in the ability to reach small producers in the field.

The LAC agricultural sector still has basic challenges to overcome, with notable examples, but little structural progress at the base of the pyramid. The sectoral transmission channel does not always have the reach to bring down to small producers the public goods that could facilitate technology transfer, the adoption of good practices, productive reconversion, etc. and, ultimately, the improvement of the profitability of producing families and of their living standards. No producer adopts new measures permanently if they fail to find a differential advantage in them—productivity and profitability—, as their highly pragmatic logic is the result of decades of policy experiments of diverse scope and success.

The technological transition for adaptation to climate change, ensuring clean and safe production, requires a much more efficient transmission system, otherwise these resources will not reach the field, which can bring about deep inequities among producers. This challenge requires strengthening of national sectoral support systems, modernization of their structures, use of digitalization and agrotechnology, expansion and improvement of their territorial units, among others. Otherwise, the announced funds will only nurture highly specialized studies and events, which will hardly translate into an actual change in practices encouraged by profitability and productivity at the LAC productive base.