New agribusiness generation in Brazil builds startups linking land and technology

RIO DE JANEIRO, BRAZIL – The children of rural producers who leave the countryside to study and then return to the farms, bringing with them technology and management tools, do not stand out only when taking over the family’s properties.

These youths are also creating startups focused on agribusiness, offering solutions to problems they know up close.

The Santa Catarina-based Horse Machine, for example, was founded by Guilherme Kieling and Cleomar Matuchaki and develops machines that assist in the harvesting of small farms in the country’s southern region.

Agrosmart’s Mariana Vasconcelos, from Minas Gerais, collects and analyzes data for crop irrigation. Eduardo Rezende, also from Minas Gerais, developed a rural property management system with Agrosolutions. For Elias Sgarbossa, from Z2S Sistemas in Rio Grande do Sul, the goal was to create a system that automates the cleaning of milking machines.

According to Agtechgarage research, the startups focused on the field are concentrated in the states São Paulo, Minas Gerais and Paraná. Most of them offer services to support precision agriculture (such as data that help the producer define the amount of pesticides to be applied), internet of things (IoT) and agricultural management.

With the positive results of agribusiness, even after the pandemic of the novel coronavirus and in a time of crisis for other sectors, people are digitizing their farms. But some customers have also felt the impacts of Covid-19. “As much as the producer has held on to revenue and has had an increase in productivity, many innovation investments were ultimately stifled,” Rezende assesses.

Nevertheless, these entrepreneurs feel that there is an increase in the number of young people starting rural businesses and that the interest of the new generations in developing technology projects signals the strength of agribusiness. Here are some of these cases.

MANY FARMS STILL DON’T SEE THEMSELVES AS A COMPANY

Eduardo Rezende, 35, is the son and grandson of coffee, eucalyptus, and cattle farmers in the interior of Minas Gerais. He grew up on the farm, but with an interest in technology. He lived in large cities before returning to the countryside, but he saw early on that one of the main obstacles, in a context of increasing competitiveness, was the low professionalization of farm management.

Six years after his degree in computer science, when he created the startup Agrosolutions, a company that offers an agricultural management system for farmers, he was already targeting the next generations on the land, realizing that family succession and the increased participation of the owners’ children in the daily life of farms would also increase demand for technology.

In addition to being an example of this movement, in practice he sees that farms are becoming digitalized, driven by the new generation. “Many farms still have a very familiar structure, it’s not like a company, where the financial and accounting aspects, for example, are organized. Everything is left in the hands of the producer, who most of the time is unfamiliar with technology. Connectivity in the field needs to be improved.”

However, he notes that the profile of producers interested in implementing other innovation techniques on their land, such as the use of drones and soil analysis by geolocation, is also increasing, and this is the target audience of startups focused on agribusiness.

With technology increasingly present in the daily life of farms, agricultural management must gain space. Instead of trying to persuade older farmers, Rezende focuses on younger farmers who are looking for tools to increase efficiency. “In the beginning, it was difficult to explain the productivity gains that farm management brought to some more traditional producers. With the increased participation of younger generations in decision making, it’s been easier to sell our service.”

By embracing a farm management system, farms are able to organize internal processes, prevent product loss in stock, better control orders for supplies and pesticides, and achieve precision gains. The farm is seen as a conventional company, and the system controls everything from the delivery of products to the control of machinery maintenance.

In Rezende’s case, the family property was the platform’s testing ground. Today, he provides services to 60 farms, from coffee farmers to cattle ranchers. “But the demand is much higher. Not even 5% of the farms today have a management system. But in the coming years, as the younger generations take control of the farms, the platforms will gain space. There is still a long way to go for technology in agro.”

TECHNOLOGY 4.0 ALSO APPLIES TO AGRIBUSINESS

Growing up in a family of corn and pasture producers, 29-year-old Mariana Vasconcelos has seen up close the increased demand for technology in the field. “And producers today, in addition to the everyday problems, have to deal with the challenge of simultaneously having to increase food production and cope with the lack of water and climate change,” she says.

Mariana recalls that the climate has always been one of rural producers’ main concerns – since childhood she would hear her parents complaining about rain that came as a surprise or dry weather that lasted longer than expected. Moreover, the use of data to implement sustainable practices in farming was almost science fiction.

“I grew up in the countryside, following my father, who is a producer in the south of Minas Gerais. Difficulties in making a decision are many, and the path was always to rely on intuition or observe what the neighbor was doing,” she says.

After graduating in business administration, she began to ask herself how to bring more technology to her parents’ property and to their social circle. “Why don’t we use 4.0 technologies for agribusiness? The technology sector still has much to evolve in the country, but Brazil is an authority in agribusiness. The aim was to bring these two worlds together.”

Recognized on lists of outstanding young people, such as Forbes magazine’s Under 30 talent, she is one of the founders of Agrosmart, a startup that offers precision agriculture services, such as soil and climate studies to increase farm efficiency and reduce costs. “For a long time, people nurtured the idea that a better life was in the city and the important thing was to study to leave the countryside. That is changing.”

Founded in 2014, the company serves about 800,000 hectares or over 4,000 producers. With the service, which is offered from R$99 per month, some farms have managed to reduce water use by up to 60%, 40% of supplies, and increase production by up to 20%.

MY FUTURE WAS IN THE CITY, BUT THAT CHANGED

When Elias Sgarbossa, 28, the son of former cattle ranchers and grain producers, began college, his plan was not to return to the countryside, recalls the native of Ibiraiaras. “Even my parents said that the rural activity was very sacrificial, with no rest and little profit. The future seemed to be in the city. But then everything changed.”

He says that, right at the start of his degree, he realized he could apply the technical knowledge he was acquiring to his family’s property and help his father review work methods, increase productivity and profitability – and even sell solutions to other producers in the region.

The family had hard work with the cleaning of the milking equipment, done twice a day. The process took around 30 minutes and different parameters had to be met, such as water temperature and the amount of detergent used.

The engineer then developed a system that automates the cleaning of milking machines. “We needed efficient cleaning so that quality would not decrease and prevent a drop in the price charged for the milk.” Five years ago, he applied for a patent for the prototype and founded the startup Z2S Sistemas, with the help of a professor and a colleague from college.

“It was a chronic problem for several small and medium producers. There were existing solutions for this, but they were not fully automated. At some point, the producer needed to be there during the procedure to monitor the cleaning. With our system, cleaning is automatic.”

The family property served as a test for the equipment, and the total bacterial count (CBT) in milk, which is one of the quality indicators, dropped from 40,000 to 2,000. With this result, the producers are now paid R$0.06 more per liter. The complete cleaning process is now performed in 20 minutes and Elias’ startup, which has three machines already installed, is now in the process of attracting investments.

FAMILY WAS A GUINEA PIG FOR OUR EQUIPMENT

The son of cattle farmers from Rio Grande do Sul, Guilherme Kieling, and the son of tobacco farmers from Santa Catarina, Cleomar Matuchaki, had the common goal of creating low-cost technology that could be affordable to small farmers.

“The family property is small. And, from an early age, I always heard that I had to study, so I could leave the country for the city,” says Kieling. “I have always been curious and interested in machines. Then I asked myself: can I turn this into a useful business for the producer?”

With this goal, they founded the startup Horse Machine a little over a year ago in the interior of Santa Catarina. The firm develops machines geared specifically for small fruit producers – there are a large number in the region. The company is part of a local incubator and is preparing to raise investments abroad.

“There is a large supply of technology for large landowners. But the small farmers don’t have access to this equipment. Our goal was to improve the offer to these small farmers with similar problems to (those of) our parents,” says Kieling.

He says that he started testing the first machines a little over two years ago. “Friends from the countryside and his own family were the guinea pigs. From them, we began to make adjustments and promote the product.”

Today, there are over 20 models designed, including four types of machines that have not been offered to producers. This equipment helps in the processing of apple crops, strong in the region of Criciúma and São Joaquim, in the interior of Santa Catarina.

“It was a culture that we didn’t know much about, but we approached local producers, who told us their demands. One of the machines, for example, collects the branches, which used to be done manually and slowly.”

The work that used to take a whole morning is now completed within an hour. One of the start-up’s forklifts sells for a quarter of the price of a conventional one, and their machines, which cost from R$2,000, are now operating on over 100 farms.