The Outlook for Agriculture and Rural Development in the Americas:
The health, economic and social crisis triggered by the COVID-19 pandemic also offers opportunities for rebuilding and transformation that will strengthen resilience and reduce or prevent future crises. Transformative actions will need to take into account the central role and importance of ensuring prosperous and inclusive AFSs and rural territories, given that they represent an important source of income, employment and food for the region and the world. LAC’s rural territories produce food for more than 800 million people; cultivate 14 % of the world’s crops; are home to a large part of the planet’s biodiversity, freshwater and natural forests; produce half of the energy in the region and provide the ecosystem services on which cities depend.
In this report 2021-2022, the Economic Commission for Latin America and the Caribbean (ECLAC), the Food and Agriculture Organization of the United Nations (FAO) and the Inter-American Institute for Cooperation on Agriculture (IICA) highlight the central role of agri-food systems and actions for rural and agricultural transformation in Latin America and the Caribbean in the post-pandemic recovery scenario of COVID-19.
Rural and agricultural transformation actions in LAC
Executive Secretary || Economic Commission for Latin America and the Caribbean (ECLAC)
Assistant Director General and Regional Representative for Latin America and the Caribbean || Food and Agriculture Organization of the United Nations (FAO)
Director General || Inter-American Institute for Cooperation on Agriculture (IICA)
The health, economic and social crisis triggered by the COVID-19 pandemic also offers opportunities for rebuilding and transformation that will strengthen resilience and reduce or prevent future crises. The pandemic has demonstrated that the principle of “rebuilding better” should be the basis of efforts to emerge from the crisis, which will necessitate the transformation of the Latin American and the Caribbean (LAC) development model and the implementation of the necessary adjustments in its agri-food systems (AFSs) to build resilience to future risks.
Transformative actions will need to take into account the central role and importance of ensuring prosperous and inclusive AFSs and rural territories, given that they represent an important source of income, employment and food for the region and the world. LAC’s rural territories produce food for more than 800 million people; cultivate 14 % of the world’s crops; are home to a large part of the planet’s biodiversity, freshwater and natural forests; produce half of the energy in the region and provide the ecosystem services on which cities depend. At the same time, it must be acknowledged that even before the onset of the pandemic, it had been said that AFSs were in need of transformation in line with the Sustainable Development Goals (SDGs). This was due to the fact that, prior to the pandemic, rural areas were already lagging considerably behind in terms of their development indicators, due to the interplay of multiple social, economic and territorial inequalities reproduced from one generation to the next.
The transformation of AFSs requires innovative action in diverse spheres, in addition to new relationships, partnerships and collaborative work among actors from the public and private sectors, civil society, the scientific world, academia, and from international cooperation and financial agencies.
The current crisis should be seen as an opportunity to rethink the financial agenda for the development of LAC, as well as an occasion to bring about widespread social and political consensus, aimed at implementing ambitious reforms to establish a process of sustainable and equitable rebuilding, both within and outside of AFSs.
Global and regional context
The COVID-19 pandemic has affected LAC more than any other region in the world, in terms of both health and economic outcomes. The contraction of more than 7 % in the regional gross domestic product (GDP) in 2020 is the largest drop in economic activity in 120 years. Despite entering the crisis with high levels of debt, many emerging economies, including several in LAC, have implemented unprecedented fiscal support measures in response to the COVID-19 pandemic.
The reduction in household income has reversed progress in reducing poverty and food insecurity in the world and in LAC. Income inequality is also likely to increase significantly due to the pandemic.
- In LAC, poverty and extreme poverty reached levels in 2020 that had not been observed in the last 12 and 20 years, respectively.
- There has been a strong impact of the crisis caused by the pandemic of COVID-19 on the labor market. The regional unemployment rate stood at 10.7 % at the end of 2020, with an increase of 2.6 percentage points with respect to the value registered in 2019.
- An additional 44 million people are moderately or severely food insecure in the region, of which 21 million became severely food insecure.
Despite the predictions of AFSs collapse in the first months of the COVID-19 pandemic, the agricultural sector has been more resilient than other sectors in terms of growth of production value and regional trade. When analyzing the data on GDP, we can see that it has contracted in all the countries for which data are available; the agricultural sector, on the other hand, exhibited a more favorable behavior and in many cases it has even increased. Regarding international trade, the pandemic has had a negative impact on all the region’s exports, but the food sector seems to be on a better footing. According to data reported by 17 countries in LAC, during the first year of the pandemic (accumulated from January to December of 2020), agrifood exports totaled USD 240 billion, an increase of 2.7 % with respect to 2019, while total merchandise exports registered a fall of 9.1 %
The pandemic and the resulting quarantines and lockdowns have generated important changes in consumer preferences and have worsened the conditions of food insecurity and undernourishment for a significant proportion of the population. In addition, they have increased the production and consumption of digital products and services. Priorities for agri-food systems (AFSs) in the coming years should include investing in green infrastructure to help mitigate climate change, promoting universal access to social security, introducing initiatives to boost productive capacity and to adapt to the digitalized economy, and solving the over-indebtedness of families and productive farms.
Rural and agricultural transformation
The region of LAC has been facing significant changes since before the pandemic. Several trends, acting simultaneously, have been promoting transformations in the social, economic, and environmental structures of the region with important impacts in rural areas. However, since before the pandemic, it is widely accepted that the AFSs require a transformation that should be aligned with the SDGs. The reason is that, even prior to the pandemic, the rural population faced significant lags and gaps in their development indicators, due to the interaction of multiple social, economic, and territorial inequalities that are reproduced from generation to generation.
Crises are great opportunities for change. The recovery process after the COVID-19 pandemic is presented as an opportunity to make AFSs more resilient to the risks associated with climate change and to promote environmental, social and economic sustainability. Therefore, the COVID-19 crisis is considered an opportunity to accelerate digitalization processes. New technologies can be an important engine for rural transformation, creating new opportunities for farmers.
In this chapter, the main strategies to enable more prosperous, sustainable, resilient and inclusive AFSs are discussed:
- Local consumption and international trade (see section 3.3.1).
- Multilateralism and trade integration (3.3.2).
- The agriculture sector and climate change (3.3.3).
- Soil restoration and regeneration (3.3.4).
- Capitalizing on and adding value through biological resources (3.3.5).
- The “One Health” approach (3.3.6).
- Cooperativism (3.3.7).
- Digitalization of agriculture (Special chapter 4).
It is imperative to advance in the renewal of the institutional framework and its instruments, as well as in the development of a new mode of governance that facilitates coordination between all actors and social sectors to strengthen the AFSs, while moving towards sustainable rural development.
The post-COVID-19 pandemic transition is an opportunity to promote a more sustainable, inclusive, and resilient rural and agricultural transformation. This requires innovative actions in various fields and new relationships between public, private and civil society actors.
Digitalization of agriculture
Digital agriculture (DA) is understood as the incorporation of digital technologies into the processes and stages of farming. Smart farming and agriculture 4.0 are often used as synonyms of digital agriculture. The availability of digital technologies for agriculture has risen significantly in recent years, driving agricultural digitalization, which could make a significant contribution to the positive transformation of AFSs, a requirement for achieving the Sustainable Development Goals (SDGs). Digital agriculture has the potential to contribute to achieving nine SDGs.
In addition to the substantial potential benefits, the application of digital technologies to agriculture implies considerable risk, Firstly, digital technologies could exacerbate the inequalities existing within the rural community and accelerate to an extreme the exclusion of those who are unable to incorporate them. Secondly, digital technologies produce changes in the roles and relationships of stakeholders, leading to shifts in power relations that could create conflict and the exclusion of those who are unable to adapt. Thirdly, while digitalization could increase the productivity of the labor force, the automation of operating and cognitive tasks (using robots and artificial intelligence, respectively) could lead to the displacement and exclusion of workers). Lastly, there is the risk of violating the rights of ownership and privacy of agricultural agents associated with the traffic and use of technology-generated data. To mitigate these risks, advanced, concrete action must be taken to address the risk factors (such as through access to technologies, capacity-building, legal frameworks, etc.).
Despite the growing availability of digital technologies, the digitalization of agriculture in LAC is still incipient and unequal. The COVID-19 pandemic accelerated the process and exposed existing gaps.
To drive and accelerate agricultural digitalization and prevent the process from becoming fragmented and incomplete, it is essential to establish agreements and agendas that guide the actions of diverse actors, as well as to promote new actions. The digital transformation of agriculture could make a significant contribution to achieving sustainable and inclusive agri-food systems (AFSs), for which it is imperative to agree on public and private promotion agendas.