Impulse that comes from the new

Considering data from the Ministry of Agriculture, Livestock and Supply (MAPA) on Brazilian agricultural production, in the period from 1975 to 2015, it is observed that the total productivity of production factors was the great vector of the expansion of our agriculture. The growth in production was mainly due to the increase in productivity resulting from innovative techniques, products and processes in plant biology and nutrition, mechanization of operations, phytosanitary protection, crop management and production organization. Living, historical proof that inhibiting innovation is equivalent to slowing down, to some degree, the pace of growth in economic activities, as it leads to losses in competitiveness.

The interesting study “Technological Innovation and its Impacts on the Economy” (June 2018), by economist Alexandre Mendonça de Barros, warns about this issue of what is gained or lost when we stimulate or neglect research and innovation. To show, the study begins by listing some relevant phytosanitary risks in the country. In soybeans, it highlights three pests with the potential to reduce productivity by between 10% and 35%, if not adequately controlled. In corn, he mentions three with potential damage in the same range. Among the diseases, he points out three with a 10% to 25% risk to soybean productivity, a situation that worsens with corn, in which there are diseases with a potential reduction of 30%, 40% and even 50%.

According to the work, comparing fungicidal treatments for soybean rust, carried out during the 2016/2017 harvest, involving 39 trials and 27 research institutions, Embrapa found that phytosanitary products that used new generation molecules had an average performance of 16% better, in relation to those formulated with old molecules. In other words, there was an increase in efficiency in controlling the disease, resulting from technological innovation, and in no situation did the new molecules lose to the old molecules and the better result of the new ones – compared to the worst among the veteran ones – represented a difference of the order of 30%.

Of course, new products, due to their lifespan, tend not to be the most used at first. So, just for hypothesis and to have an economic dimension of the issue, let's imagine a 5% decline in productivity and let's see its impact on the Gross Production Value (GPV) of these crops (base 2017): if the damage to productivity were 5%, there would be a drop of R$1,9 and R$5,8 billion in the VBP, respectively in corn and soybeans. And, if the productivity decline were 10%, the VBP would fall by R$3,8 and R$11,7 billion, respectively. Losses whose impact would go further, affecting rural consumption of direct, indirect, or induced goods and services in other sectors of the economy.

This is a specific example in the phytosanitary area. But this type of aggregating effect of innovation also occurs in plant genetics, precision nutrition, automation and artificial intelligence, among other technologies. And this is not about blind faith in innovation, as scientific thinking and critical reflection regarding innovations must always exist.

Technologies interfere with reality and need to be evaluated based on their comparative advantages and the analysis of their potential risks, using scientific metrics. In fact, this applies not only to field production, but also to a car, plane, medicine or even a prosaic cell phone. Technology is the engine of the economy and innovation is the engine of technology. Both are (along with education) at the root of productivity growth.