Innovation Call: Advancing Digital Innovation for Smallholder Farmers in Latin America

This Innovation Call is a key activity of the project, “Advancing Digital Innovation for Smallholder Farmers in Latin America”, which is funded by the Multilateral Investment Fund (IDB Lab) and executed by Incofin Foundation. Additionally, the project involves potential co-financing from the Government of Israel for agritech solutions capable of incorporating knowledge and expertise from Israeli companies in the agritech field.

Additionally, this Innovation Call encourages solutions that aim to promote gender inclusivity. Selected entities will fall into one of two groups and receive grants to fund technical assistance (TA) projects aimed at developing and/or scaling agritech solutions tailored to the conditions, needs and potential of smallholder farmers.

Focus Areas

Prospective applicants will be expected to clearly articulate how their agritech solutions support greater profitability and/or climate resilience. Applicants that also prioritise gender inclusion as part of their solutions will be viewed favourably. The agritech solutions will focus on four digital agriculture use cases closely linked to the objectives of this Innovation Call.

• Digital advisory: The use of digital solutions, including interactive voice response (IVR), text messaging, apps like WhatsApp and other dedicated apps that provide agronomic information, best practices and advice to smallholder farmers. The aim is to reach more farmers more cost-effectively, with insights that can help them improve their agricultural production processes, boost productivity and reduce losses.
• Smart farming: The use of data collected from sensors, drones, satellites and other agricultural assets to provide smallholder farmers with recommendations on how to optimise resources (water, inputs, feed, etc.). The aim of smart farming solutions is often to increase productivity and lower the cost of production.
• Agricultural digital financial services (DFS): The provision of financial services (e.g., payments, credit, insurance) through digital channels. The aim of agri DFS is to give farmers access to financial resources that can help them invest in their farms, reduce the risk of extreme climatic events and exit the cycle of poverty.
• Agri e-commerce: Online platforms that facilitate the buying and selling of agricultural products, such as crops and livestock, as well as inputs. The aim of agri e-commerce platforms is to identify new markets for smallholder farmers, most often domestically but increasingly internationally.

Groups of Selected Entities

• Each entity selected under this Innovation Call will receive a grant to fund a TA project aimed at developing and/or scaling an agritech solution for smallholder farmers. The selected entities will fall into one of the following two groups:
  • Group 1: Recently established entities aiming to test new business and operational models, proof of-concept ideas or existing agritech solutions that focus on smallholder farmers and show potential for scale. The Innovation Call will select up to eight Group 1 entities.
  • Group 2: More mature entities that will receive support to scale their existing business models/services within the agriculture sector, enhancing their capacity to better serve smallholder farmers through agritech. The Innovation Call will select up to six Group 2 entities.

Grant Amounts

The following financial support will be made available to selected entities:

• Group 1: Grant funds of up to USD 50,000 in cash to fund the corresponding TA project and costed activities outlined in the application form. These resources are provided by IDB Lab. No matching contribution is expected from Group 1 entities.
• Group 2: Grant funds of up to USD 85,000 in cash to fund the corresponding TA project and costed activities outlined in the application form. These resources are provided by TA facilities managed by Incofin IM and IDB Lab.
• Both groups: Additional grant funding from the Government of Israel of up to USD 28,500 in cash per TA project will be allocated to expand the budget of each TA project if the components of the project can be deployed by eligible Israeli agritech entities.

Access to additional support outside the scope of this Innovation

• Call Depending on the stage of the agritech solutions and the performance of the TA projects, successful Group 1 applicants will be linked to investors with the interest and appetite to invest in early-stage companies.
• Group 2 entities will have the opportunity to apply for additional financing from Incofin IM’s managed or advised investment funds, using debt and/or equity instruments to facilitate the roll-out or scaling of their agritech solutions. Investment decisions will be subject to applicant entities meeting the requirements and procedures established for accessing these investment sources.

Thematic Areas and Activities for TA Projects

• Digital product/service development
  • Investing in research and development to improve products and services that use digital solutions in line with the needs and conditions of smallholder farmers
  • Conducting user experience (UX) research to support product design
• Data management
  • Building capacity to capture, process and analyse data from the implementation of agritech services, including productivity, commercialisation, profitability and climate adaptation data Implementing data security, data privacy and risk management solutions related to customer information
  • Using digital tools to gather feedback from smallholder farmers to support continuous improvement
• Business model development
  • Advising for designing marketing and sales campaigns
  • Building capacity in fundraising with potential investors
• Corporate capabilities
  • Strengthening capabilities in strategic planning and risk management
  • Training staff in business intelligence analysis

Eligibility Criteria

• The eligible countries for this Innovation Call are Bolivia, Colombia, El Salvador, Honduras, Paraguay and Peru.
• Be legally incorporated in the eligible country(ies) where the agritech solution will be implemented and operate under commercial law. If the entity is not incorporated in the eligible country(ies), submit proof of legally operating in such country(ies) as a foreign entity.
• If none of the two conditions above is met, the applicant entity must be in the process of legally incorporating in the eligible country(ies) or their steering/governing body will have approved a plan to expand to such country(ies).
• Be any of the following categories of entities:
  • Agritech organisation and/or start-up: Entities offering knowledge-based services powered by innovative digital technologies. These companies tend to combine multiple tools, such as big data, artificial intelligence (AI), Internet of Things (IoT) and blockchain, among others, which can be utilised across different use cases along agricultural value chains.
  • Financial service provider: Entities providing financial services to actors that participate in activities across agricultural value chains. These services may include credit, savings, insurance, microcredit, leasing and trade finance, among others.
  • Producer organisation: Formal rural entities whose members organise themselves with the objective of increasing farm income through improved production, marketing and local processing activities.
  • Agribusiness or corporate with procurement arrangements with smallholder farmers: Companies often involved in the agriculture or food industry, having established formal contractual arrangements with smallholder farmers for the purchase of agricultural products.
  • Are not included in IDB Group’s List of Sanctioned Firms and Individuals.
  • Are not incorporated in any high-risk jurisdictions subject to a Call for Action by the Financial Action Task Force (FATF).
  • Are not incorporated in countries or territories directly subjected to comprehensive international sanctions or embargoes, in particular as issued by the European Union (EU), the United Nations (UN) or the Office of Foreign Assets Control (OFAC).

For more information, visit GSM Association.