The fruit fly's natural visual environment is often characterized by light intensities ranging across several orders of magnitude and by rapidly varying contrast across space and time. Fruit fly photoreceptors robustly transduce and, in conjunction with amacrine cells, process visual scenes and provide the resulting signal to downstream targets. Here, we model the first step of visual processing in the photoreceptor-amacrine cell layer. We propose a novel divisive normalization processor (DNP) for modeling the computation taking place in the photoreceptor-amacrine cell layer. The DNP explicitly models the photoreceptor feedforward and temporal feedback processing paths and the spatio-temporal feedback path of the amacrine cells. We then formally characterize the contrast gain control of the DNP and provide sparse identification algorithms that can efficiently identify each the feedforward and feedback DNP components. The algorithms presented here are the first demonstration of tractable and robust identification of the components of a divisive normalization processor. The sparse identification algorithms can be readily employed in experimental settings, and their effectiveness is demonstrated with several examples.