AI and precision farming could stabilize food prices but small farmers risk exclusion

Global food prices have become one of the most pressing economic concerns of the decade, driven by climate shocks, wars, and fragile supply chains. Around the world, governments are turning to digital farming technologies as a potential solution to stabilize production and protect consumers. But in Brazil, one of the world's largest food producers, a new study warns that while digital agriculture could help fight inflation, unequal access to technology threatens to leave family farmers behind.

The paper, “Digital Agriculture and Food Inflation in Brazil: A Critical Assessment,” published in the journal World examines how precision farming, artificial intelligence, and smart sensors might reduce food inflation in Brazil, while also highlighting the barriers that risk deepening inequality.

Can digital agriculture stabilize food prices?

The study finds that digital agriculture has significant potential to reduce food inflation by boosting productivity and making supply chains more resilient. Technologies such as artificial intelligence, robotics, blockchain, nanotechnology, and big data can transform farming practices. Smart sensors allow farmers to optimize fertilizer and water use, while predictive analytics improve planting and harvesting schedules. Blockchain systems offer transparent traceability, reducing logistics costs and waste.

These innovations, the authors argue, can shield Brazil’s food system from shocks like pandemics, global conflicts, and climate events, all of which have disrupted supply and driven up prices in recent years. By improving efficiency and reducing waste, Agriculture 4.0 can stabilize prices for consumers while improving competitiveness in global markets.

However, the study warns that the benefits are not evenly distributed. Large agribusinesses, which already dominate export-oriented production, are best positioned to adopt advanced digital systems. Family farms, responsible for much of Brazil’s domestic food supply, struggle with limited resources and lack of digital infrastructure. Without intervention, food inflation could remain a persistent challenge for local markets, even as high-tech farms thrive.

What barriers prevent small farmers from adopting digital tools?

The research identifies multiple barriers that hinder broad adoption of digital agriculture, particularly among family farmers and smallholders who play a vital role in domestic food security.

Economic barriers remain the most pressing. The high cost of AI-enabled machinery, smart devices, and precision tools keeps digital agriculture out of reach for most small producers. Financing is limited, and rural credit programs often fail to address the upfront costs of digital transformation.

Infrastructure gaps compound the problem. Rural areas in Brazil suffer from weak internet connectivity, limited access to electricity, and outdated logistics networks. Without reliable digital infrastructure, many farms cannot support the technologies that promise efficiency gains.

Educational and cultural barriers also weigh heavily. Many small-scale farmers lack the training to use digital platforms effectively. Resistance to innovation is widespread, partly due to limited exposure and partly because traditional farming methods have long been relied upon. The discontinuation of rural extension services further reduces opportunities for farmers to learn new digital skills.

The authors highlight that these barriers are interdependent. For example, poor infrastructure limits training opportunities, while lack of training makes it harder to justify investment in new tools. This cycle risks leaving smallholders excluded from the productivity and inflation-mitigation benefits of Agriculture 4.0.

What policies are needed to ensure equity and inflation control?

The authors argue that digital agriculture can only fulfill its potential if public policies actively promote inclusion. They propose a series of measures aimed at integrating small and medium producers into Brazil’s digital agricultural transition.

Key recommendations include:

• Expanding rural broadband connectivity to ensure that farms have the digital infrastructure needed to adopt new technologies.
• Establishing Agrotechnological Districts (DATs) that bring together farmers, companies, universities, and governments to create collaborative ecosystems for knowledge transfer and innovation.
• Strengthening rural extension services to provide ongoing training, digital literacy, and capacity-building for farmers of all ages.
• Designing targeted credit and financing mechanisms that lower the entry costs of digital adoption for family farming.

The study also focuses on the role of social policies in stabilizing food prices while supporting vulnerable farmers. Programs like Brazil’s Food Acquisition Program (PAA) and school feeding initiatives provide both a stable market for small farmers and affordable food for local communities. By integrating family farming into value chains, these policies demonstrate how state intervention can balance efficiency with equity.

Overall, the study asserts that combating food inflation in Brazil requires more than technological adoption. It demands inclusive governance and deliberate investment to ensure that digital agriculture does not deepen divides between industrial agribusiness and smallholder farmers.