New FAO study provides case study-based evidence on the economic and financial viability of bioinputs in Latin America

A new study by the Food and Agriculture Organization of the United Nations (FAO) has found that bioinputs—products derived from plants, animals or microorganisms used in agriculture—can represent a financially sound investment for producers in Latin America and the Caribbean. However, their profitability depends on the crop, soil type, agroecological conditions, production scale, and the technologies used. 

Latin America and the Caribbean is currently the fastest-growing region in the world for the use of bioinputs, with an estimated annual growth rate of above 10 percent. Globally, an average of 38 percent of producers have adopted biostimulants, biofertilizers or biocontrol products, while in Brazil the adoption rate reaches 67 percent, one of the highest in the world. 

Against this backdrop, the publication Case Studies on the Adoption and Production of Bioinputs in Latin America: A Cost–Benefit Analysis provides new evidence on the economic and financial viability of adopting and producing bioinputs, an area where information has so far been limited to support decision-making by farmers, investors and policymakers. 

Interest in bioinputs has grown significantly in recent years, particularly following the sharp increase in global fertilizer prices caused by rising natural gas costs and geopolitical tensions stemming from the war in Ukraine. According to the study, this situation led the value of fertilizer imports in Latin America and the Caribbean to increase by 137 percent in 2022, reinforcing the search for more resilient alternatives for agricultural production. 

In this context, bioinputs offer an alternative to improve productivity, preserve soil fertility, reduce production costs, increase resilience to sociopolitical shocks, and lessen the environmental impact of agriculture. 

The research assessed different scenarios for the adoption and production of bioinputs in five Latin American countries—Argentina, Bolivia, Brazil, Costa Rica and Mexico—covering a wide range of crops, production systems and producer profiles. Specifically, it evaluated the use of commercial bioinputs in conventional farming systems, on-farm production of bioinputs and the financial viability of cooperatively managed biofactories. 

In crops such as sugarcane in Mexico and soybean and grapes in Bolivia, the adoption of commercial bioinputs combined with a partial reduction in agrochemical use increased profitability through higher yields or lower production costs. By contrast, results were more variable in systems based on bio-preparations produced on farms, where increased labour requirements reduced economic benefits in some cases. 

The study also concludes that producing bioinputs on farms, when carried out under appropriate technical protocols and with quality controls that guarantee the efficacy and safety of the products, is often competitive with purchasing commercial products, particularly in remote areas located far from supply centres. Likewise, cooperative biofactories can be financially viable when their scale matches local demand and takes advantage of the resources and infrastructure available in the territory. 

In addition to the economic findings, the publication examined several environmental benefits associated with the use of bioinputs, including reduced greenhouse gas emissions and more efficient water use. However, the authors note that these impacts are likely underestimated due to the limited information available to quantify other positive effects, such as improved soil health, biodiversity and human health. 

The publication also highlights that the use of bioinputs can facilitate access to international markets with stringent food safety requirements, particularly for export commodities such as coffee, cocoa, bananas and avocados, by helping producers comply with maximum pesticide residue limits. 

Based on the evidence gathered, the study puts forward a series of recommendations to strengthen investments and public policies aimed at promoting the adoption and production of bioinputs. 

Among its main recommendations, the publication calls for stronger financing mechanisms and technical assistance to support producers during the transition towards these technologies, particularly small-scale farmers. It also recommends expanding the generation of scientific evidence, strengthening quality control systems and consolidating regulatory frameworks that increase market confidence and facilitate the wider adoption of bioinputs across the region.