Improving algorithms for risk management in agribusiness and its commercial application

• Grant number: 21/10928-7
• Support Opportunities: Research Grants - Innovative Research in Small Business - PIPE
• Field of knowledge: Applied Social Sciences - Economics - Agrarian and Natural Resource Economics
• Agreement: SEBRAE-SP
• Principal Investigator: Lucas Magro Koren
• Grantee: Lucas Magro Koren
• Company: Matriz Brasileira de Risco Agro Ltda
• CNAE: Tratamento de dados, provedores de serviços de aplicação e serviços de hospedagem na internet
• City: Piracicaba
• Associated researchers: Durval Dourado Neto
• Associated research grant: 19/22854-8 - Research and development of algorithms for risk management in agribusiness, AP.PIPE
• Associated research grant(s): 21/14942-4 - Improving algorithms for risk management in agribusiness and its commercial application, AP.PIPE
• Associated scholarship(s): 22/04231-6 - Improving algorithms for risk management in agribusiness and its commercial application, BP.TT; 22/04230-0 - Improving algorithms for risk management in agribusiness and its commercial application, BP.PIPE

Abstract

The "Matriz Brasileira de Risco Agro Ltda" is company that resides in ESALQTec (a startup incubator) from Escola Superior de Agricultura "Luiz de Queiroz" da Universidade de São Paulo (ESALQ/USP). The project initially started from research made for the company on its PIPE I project, which the proposal was to develop algorithms with Big Data in order to measure the risk of agriculture operations. The Project presented here is a continuity from the PIPE I project. The technology and methodology created by "Matriz Brasileira de Risco Agro Ltda." is an innovative way to analyze the risk in agriculture production, using a comparative index, the "IMBR", is made from data collected in order to understand the reality of the production and agrometeorology from a specific location. The main innovation was the creation of a machine learning system, which standardizes results connected to rural risk for different cultures and places. The product of the "Matriz Brasileira de Risco Agro Ltda.", the index "IMBR, it's defined as a score to measure the risk of agriculture operations. At this present moment, there isn't any agency/consultancy/startup ("big data" and fintech) which has agriculture risk analysis as its core business. Since the financial market has a huge possibility of growing, especially on the agriculture financial system, there is a gap in a potential market which "Matriz Brasileira de Risco Agro Ltda." can explore to show its value and achieve a constant grow.When we analyze the market, the innovation that "Matriz Brasileira de Risco Agro Ltda." brings is the possibility to aggregate information from rural risk in a standardized form, which currently does not exist in a consolidated and simple way in the industry. In the short term, this specific kind of analysis can help companies that work with agriculture credit and insurance, both for agriculture producers which are always looking for better deals and for the insurance and credit companies which may have an overview of the whole business. In the long term, many Brazilian agrobusiness specialists consider that there will be a political consolidation of agriculture policy from rural insurances (GUIMARÃES e NOGUEIRA, 2009; LOPES et al, 2016), which will demand a more precise and structured rural risk analysis than what we currently have in Brazil. All things considered, the IMBR index will be a valuable tool for different Brazilian agribusiness players in several areas. On that subject, the main use of our index will come from Insurance Companies, which will use this data to improve its own risk calculation and to optimize its performance of the premiums from insurances. Also, financial companies have the possibility to better understand its own risks from their credit operations. The "Matriz Brasileira de Risco Agro Ltda." has already done Proof of Concept (PoC) and Proof of Value (PoV) with agents from both sectors which validates and guarantees its value and application of the startup product. Therefore, the goals of this project are the following: continue the improvement of its own algorithms, to add more value to the analysis of the collected data; increase the number of agriculture commodities that "Matriz Brasileira de Risco Agro Ltda." current works with. This means the startup will continue to add more commodities besides the ones already on its risk software (soybean and corn), which will demand the development of new technology and methods. Last, with the goal to improve our technologies and information system, we aim to deliver a complete product with a perfect operation and even faster responses. (AU)