THE BIODIESEL PROGRAM IN BRAZIL: OPPORTUNITIES AND CHALLENGES FOR FAMILY AGRICULTURE
Case Study: Pole of Biodiesel Serra da Capivara, Piauí
The Biodiesel program in Brazil Biofuel development in Brazil
→ History of bio-ethanol Large extension of mono-crops Bad labor conditions (slave labor)
Policy response→ The National Program for the Production and Use of Biodiesel (PNPB) Social objective: inclusion of family farmers Environmental objective: avoiding large
extension of mono-crops
The Biodiesel program in Brazil Inter-ministerial Executive
Commission (CEIB)→ MDA family agriculture Creation of biodiesel market
Normative increase in blending (2% in 2008 to 5% in 2013)
Auctions: ANP buys biodiesel in anticipation
Biofuel companies must hold Social Fuel Seal (SFS) to participate in auctions
Social Fuel Seal (SFS) SFS granted to biofuel companies by the
MDA -provided that Biodiesel companies have contracts with family farmers
Contracts negotiated by labor unions and biofuel companies
Contracts should stipulate price, location of buying and technical assistance
Tax exemptions to Biodiesel companies holding SFS
Problem Statement Research has been conducted on why the
PNPB has failed in its social objective (regional approach) Selection of crops, low price, breach of contract
In recognition of the difficulties faced, the Project Poles of Biodiesel of the Northeast was launched
Creation of Petrobras Biocombustíveis → Potential of these new efforts: unsettled
and up for debate
Research objective To present a comprehensive description
of the circumstances of family farmers in the Territory Serra da Capivara in the State of Piauí
To assess the potential and challenges of the production of oleaginous based in family agriculture
To contribute to the debate of the social inclusion of the PNPB
Research questions
1. What have been the main challenges encountered by family farmers in joining the biodiesel chain in the Pole of Biodiesel Serra da Capivara?
2. What is the potential to include family agriculture in the biodiesel sector?
Methodology
Unit of analysis : micro-region of São Raimundo Nonato, Territory Serra da Capivara, Piauí
Case study: interviews with local actors and family farmers
Snowball sampling system Support of EMATER-PI (technical
assistance provider)
Background
Northeast region: targeted within the PNPB for regional development (largest concentration of family agriculture)
Major challenges were encountered in this region
Poles of Biodiesel of the Northeast
Micro-region São Raimundo Nonato
Territory in the southeast region of Piauí
18 municipalities Castor seed
production pole during the 70’s and 80’s
Prefeituras Municipais
Fetag-PI
Sindicatos Rurais
Implementation 2004 Partnership
between several institutions
Large implementation
Micro-reion São Raimundo Nonato targeted
Implementation 2004
The bank faced a 90% default and little castor seed was commercialized
Year # Municipalitie
s
# Farmers Area (ha)
Implementation 2004/2005
14 1813 3626
Implementation 2005/2006
23 4485 9818
Implementation 2006/2007 (not executed)
42 7735 26842
What happened? Massive provision of credit (PRONAF) Credit delayed (lack of operational
capacity) Seed provision delayed after rainy
season Distribution of grain instead of certified
seed Eight technicians for 4000 farmers
Low productivity → credit default
What happened?
People who were not farmers accessed the loan
Farmers who were interested in the credit but not in the cultivation of castor seed
Few farmers for commercialization
Consequences
Lack of trust in biodiesel company Relating contracts to debt Loan default “Certified seed it is not appropiate for
our region.” “Castor seed production is not
economically viable.”
Implementation 2008 Problems were identified with Project
Production Poles of Biodiesel through working group
Brasil Ecodiesel left, Petrobras entered Petrobras contracted EMATER-PI to
accompany family farmers from mobilization until commercialization
Includes 14 of the 18 municipalities in the territory
Process of inclusion of family farmers
oGoal: relating contracts to debt, without credit not interestedoContracted: interest in access to credit or other incentivesoPlanted: no access to capital, irregular rainfall oCommercialization: low productivity, selling earlier
Goal Contracted Planted Commercialized
Total 750 417 262 162
Inclusion of family farmers
o Farmers switching from BED to Petrobras
Harvest year 2008/2009 2009/2010 # of new farmers
Total 447 667 220
Potential Adaptability of the crop to the agro-
climatic conditions of the semi-arid region Opportune harvest period: source of
income in the driest period of the year Favoured by culture of 80’s and 90’s
→ But: family farmers’ food security The better-off farmer is the one with a
diversified farm Only viable as part of a diversified system
Challenges Agro-ecological conditions
Irregular rainfall Characteristics of the soil (pH value, texture)
Socio-economic conditions Transportation and storage infrastructure Lack of supporting services: credit, machinery,
technology, technical assistance, extension Land ownership Research on the area
Challenges Family agriculture system characteristics
Farm animals: toxity of castor seed Labor availability: priority staple crops Low productivity: low return on labor (soil) Intercropping system: varieties of castor seed
and bean, other preferences for intercropping Other channesl of commercialization:
middlemen Meaning of contract: independence, trust,
literacy
Challenges of implementation Scattered distribution of farmers in the territory
Nucleus of production: farmers do not identify with this
Weakness of local organizations: low number of farmers, inactive producers’ associations
DAP: making sure farmers are family farmers Banco do Brasil, Petrobras, Emater
Agro-ecological zoning Obtaining seeds
Ensure quality and quantity
The PNPB and social inclusion 18,000 farmers in the region: 667 included
in 2010 How can it be more inclusive?
More incentives: machinery, re-open credit line But: 2004 great number of incentives, not
positive results Orientation to quantity rather than quality
Farmers need time and experimentation for decision making
→ Ceará: 30,000 farmers included, aiming at improving productivity
Role of Petrobras
Structuring the productive base of castor seed in the Northeast
Increase in productivity, change of structure of costs
Castor seed oil more expensive than processed biodiesel
Investing in family agriculture today will pay off in the future
Conclusions Potential: drought tolerance, harvest time
Only as part of a diversified system Challenges related to the structure of the
program: Incentives Contracts Compatible with family agriculture
Challenges related to implementation Large-scale implementation
Challenges that the program is not meant to solve Infrastructure, additional stressors
Conclusions Inclusion of family farmers in the value
chain of biodiesel? Better understanding of family agriculture
systems Highly dependant on political agendas Orientation to quantity rather than quality:
position of farmers in the value chain Political participation: role of labor unions
is marginal
Recommendations Structure: other modalities of inclusion,
acurracy of incentives Implementation: process small-medium,
pilot projects Not only quantity of inclusion buy quality of
inclusion: oil production Diminish the dependence of family farmers
on the company Costs of incentives weighed against its
benefits
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