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Food systems and COVID-19 in Latin America and the Caribbean: The opportunity for digital transformation (Bulletin 8)

Countries
Guatemala
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Sources
FAO
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1. Editorial

The impacts of COVID-19 are growing daily. The pandemic has triggered not only a health crisis, but also an economic one. Its consequences and duration are still unknown, but we know, for example, that its impact on poverty rates and food security has no recent precedent. According to some estimates, global poverty will increase by 548 million as a result of the COVID-19. There will also be an increase in the number of food insecure people, estimated at 183 million. Poverty in our region is expected to increase by 4.4 percent, that is, an additional 30 million people.

In such a scenario – in which achieving economic, social and environmental sustainability is increasingly indispensable for the planet – the agrifood system needs urgent and innovative solutions. In this respect, digitalization is a recommendable path to follow.

Digitization has become a key driver for rural transformation, creating new opportunities for farmers. The future of agrifood systems will depend, to a large extent, on how agricultural stakeholders will be able to take advantage of the digital transformation to improve inclusiveness, efficiency and environmental impacts.

2. Key messages

• The digitalization of agriculture and food systems can have positive impacts in economic, social, environmental and institutional terms, especially in the post-pandemic recovery process.

• Currently, the adoption of digital technologies among small producers is low, so they may be excluded during the post-pandemic recovery process.

• The lack of specific public policies, low e-literacy, poor connectivity, lack of advice or actionable services, and low capacity are some of the factors hindering the transition.

• However, the pandemic has accelerated the digitalization processes, with e-commerce being the most visible.

• The digital transformation of the agrifood sector should take an inclusive, efficient and sustainable approach. This approach requires significant action by governments to establish enabling policy frameworks and incentives.

• Governments' efforts to achieve a digital transformation of the agrifood sector should focus on infrastructure and connectivity, accessibility, the level of education and institutional support, designing services for the unconnected.

• A general framework of incentives that could be used by governments could include (i) smart demand and supply subsidies; (ii) support for incubators, accelerators, innovation clusters; and (iii) better access to appropriate financial products (angel investors, venture capital, debt, equity, quasi-equity, crowdfunding) for new enterprises, micro, small and medium-sized enterprises (MSMEs) and service providers.

• Digital transformation in the agrifood sector can occur at any link in the value chain.
Opportunities exist at the on-farm and off-farm levels.