In 1917, the Italian government realized the country's food supply was declining, as a result of many farmers and their horses being drafted for the first world war.
The Italian government decided to buy 6000 American tractors for the purpose of "state ploughing",
to assist its country's predominant farming population, and secure the food supply for the Italian people and army.

Among the many different brands of tractors that were ordered, the Fiat founders noticed the innovative construction of the Fordson tractor.
Unlike the other tractors, which had their mechanical components mounted to a structural ladder chassis, the Fordsons large mechanical components were designed with casings strong enough, that they could function as the structural backbone of the tractor, creating a solid, bullet-proof unit that was practical, and economical to manufacturer in large scale.

Though the Fordson tractor was to light and under powered for the Italian conditions, the Fiat engineers were inspired, and knew how to improve the concept.
With Fiat having already been working on a tractor before World War 1, and the potential of striking a big contract with the Italian government and military, the engineers set to work in Turin on improving the concept, designing Italy's first mass-produced tractor.

A number of prototypes were prepared in the Corso Dante Factory in Turin alongside Fiat trucks. The prototypes later underwent thorrow testing at the Segre Farm in Nichelino, before finally in august 1918 being presented to government and military officials. The 702 impressed, and Fiat now felt confident putting it into production.

Though the prototype was a success, further improvements were made to the design before production commenced. These included fitting the upgraded version of its 18 BL truck engine, now called the 18 BLR (R meaning "reinforced"), upping the displacement from 5.652cc to 6.235cc, and upping power from 20 to 25hp at 800 rpm and up to 30hp at 900 rpm. The position of the power take-off pulley was also changed for ease of use. The three speed gearbox remained the same.

Around 1.100 examples of the 702 were manufactured, and the tractor won many of the ploughing trails in which it participated from 1918 to 1920 in the United Kingdom, Belgium, Argentina, France and India.