Lavoro Agro’s sustainable inputs rejuvenate agriculture

Talking with Lavoro Agro’s CEO Ruy Cunha, we learn how it supports sustainable growth of Latin America’s SME-driven agricultural system with new technology

Planetary health is declining and much of this trend is a result of soil health, food ecosystems, and the ability to reduce emission from farming activities. The products that are spread across land and soaked into the ground can have varying degrees of effect, but beyond this, the suppliers of those products carry their own environmental and social implications. 

Small-to-medium farms represent around 65% of the agricultural land users in Brazil alone, making them responsible for a majority of the food production in the country with impacts across the region. Such a large network of small-to-medium enterprises (SMEs) requires a high level of support, and there’s one organisation that backs them with agricultural inputs—agrochemicals; fertilisers; seeds and biologics, new technologies, and insights. 

Lavoro Agro is the largest distributor of agricultural inputs across Latin America (LATAM) with a solid commitment to technological innovation and a strong presence among farmers. Based in Brazil, the company supports rural food producers with professional and reliable services to help embed sustainability into the overall food production supply chain. 

“The average farmer in Brazil, in the last year, achieved between 35% to 40% profitability compared to 4 to 5% at US farms. There are many reasons for that, including the fact that they own their land. The fact that, in Brazil, we have two, sometimes three crops, you have a better usage of the land,” says Ruy Cunha, CEO of Lavoro Agro.

“They want to increase productivity, but they’re not as sophisticated in terms of technical preparation. They depend on technical advice from retailers, which is where Lavoro comes in.”

Credit: Lavoro Agro | Representation of its presence in the Latin American agriculture industry

Technologies support the evolution of LATAM’s agriculture

Lavoro Agro exceeds the confines of its country to support farming across LATAM, operating on its home turf, Brazil, and in Colombia. The company has, over time, created a region-wide platform for farming knowledge and goods that serves around 60,000 customers with 900 sales reps on hand to cater for their needs. 200 stores across its operational footprint also serve as great connections between the company and the farming community.

Cunha acknowledges the need to supply much-loved products from the likes of Bayer, BSF and other companies, but the Lavoro Agro is also in the market to share its own products and educate its customers on best practices for their use. When it comes to technology application, Lavoro Agro acts as the testing ground for some of the latest ones that farmers otherwise can’t test themselves.

“We supply to our clients the latest products and the latest technologies that the industry is developing. But, they have challenges applying them to their farms because they don't have the arms and legs and the trial fields that we prepare,” explains Cunha. 

Alongside this, and another vital tool for farmers and sustainability, is soil testing, which is another area Lavora Agro is providing a lot of research and testing. 

“Soil testing is the first basic step for you at variable rates of application. You analyse where you need what kind of agricultural input, and then you properly apply that with a reduction in inputs that can go up to 30%,” says Cunha. 

One of the key solutions developed by Lavoro Agro was funded by The Production Board (TPB)—a fund that supports sustainable agricultural research projects, as well as DNA and other scientific endeavours. In order to help farmers understand their current soil conditions and marry them with the potential effects of various biological inputs, a technology was developed to analyse this from soil testing, which became one of the first offerings by the company. 

Recognising Brazil’s sustainable ‘no-till’ agriculture

“There are a lot of good sustainability practices in the Brazilian farming system. There are obviously a lot of problems as well, but I would say there is some misunderstanding in these segments,” says Cunha. 

“Approximately 80% of farmers here already use no-till practices compared to 69% in Europe and 60% in the US—this is roughly 55% of Brazilian farmers. They already adopt some type of biologics in their products compared to 23% in Europe, and I would say 6% to 7% in the US industry.”

This was an interesting point to discover as no-till farming isn’t something that was influenced among farmers to improve the health of the soil, but more enforced as a necessity for long-term food production. As Brazil, and the rest of LATAM, battles with warmer climates, the choice of method to plant and harvest crops is purely driven by the current climate conditions. 

Traceability is key for agriculture sustainability 

The company has also introduced a fast and rigid approach to transparency from the get go. Implementing a traceability system for supplier and customer supply chain activities, the team is working to eliminate any hazardous activities within its supply chain. Where deforestation plagues the region, Lavoro Agro is taking steps to ensure that its products are not associated with those activities.

“We have a traceability programme that includes farmers and suppliers,” Cunha says.

We basically monitor the impacts or practices of our partners. Talking about the social aspect, we want many things to have a positive social impact in the regions where we operate. But one thing that we take special care of is the working conditions for people working for farmers. 

“Anything that can be a compliance issue when it comes to labour utilisation of farms, this is something that is top priority for us. How do we do that in practice?. So, deforestation and those social practices are constantly monitored by us and they are part of our credit score. If suppliers and customers are noncompliant, or if they have some serious issues of social labour force utilisation, they will have their credit denied."

Ruy Cunha, CEO of Lavoro Agro at launched of its Nasdaq IPO

About Ruy Cunha

His early career experience comes from General Motors where he was a Manufacturing Engineer for its Brazilian operations. Throughout his career development Cunha has seen more and more focus on product and supply chain activities across a number of industries. 2010 marks his journey into the agricultural field where he has since shared his knowledge and guided teams in strategy and integration. This was recognised by Lavoro Agro as Cunha joined the company in 2018 as its Chief Strategy Officer, but now reigns as CEO. 

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