Traditional communities overcome barriers to accessing public funding

“Why are community organizations and enterprises unable to access public funding?" This was one of the key questions that led the Amazon Brazil Nut Observatory (OCA) to promote a round of discussions in August as part of the Brazil Nut Dialogues, focused on financing small producers from traditional communities in the Amazon.

“The lack of funding — for direct costs, working capital, or investment — prevents people in the Brazil nut and other socio biodiversity value chains from obtaining better prices for their products and improving their income. This contributes to weakening good practices, also affecting quality management, control, and traceability. It prevents the development of technical capacity and new technologies,” said OCA's technical adviser André Machado during the online event. 

OCA is a network of organizations amalgamated to develop the Brazil nut chain, producing knowledge and mobilizing actors to consolidate a fair market with the aim of valuing the people and communities involved, while conserving the forest. 

Three PCAB implementing partners are part of the network — the International Institute of Education of Brazil (IEB), the Ecological Research Institute (IPÊ), and the United States Forest Service (USFS). Other members include Imaflora, Water Pact, the Native Amazon Operation (OPAN), Vale do Amanhecer Farmers' Cooperative (COOPAVAM), Vitória Amazônica Foundation (FVA), WWF-Brasil, Conexsus, Socio-Environmental Institute (ISA), Protected Forest Association (AFP), Embrapa (State-owned research Institute), National Council of Extractive Populations (CNS), and the Chico Mendes Memorial (MCM). The OCA structuring project has been funded by USAID/Brazil, with contributions from the Climate and Land Use Alliance (CLUA). 

“The only solution is to try to include Brazil nut gatherers and other people involved in socio biodiversity activities in PRONAF," said Carina Pimenta, executive director of Conexsus, an organization that works to strengthen the conservation of natural ecosystems and is a member of the Partnership Platform for the Amazon (PPA).

This year, Conexsus published a study that listed funding opportunities for the Brazil nut chain, many of which can be used in other socio biodiversity products, such as açaí. 

In addition to the National Program for Strengthening Family Agriculture (PRONAF), the study mentions the Rede da Floresta (Forest Network) consortium, which sells socio biodiversity products as an alternative funding strategy. The network includes the Water Pact and over 700 extractive producers from Rondônia. It is supported by USAID with technical assistance from the USFS.

Difficulty to reach end-users — Pronaf was created over 25 years ago by the Brazilian government to support family farming. It allocates funds for maintenance and investing in production. PRONAF has eight subprograms, including Pronaf B, which directly finances family farmers. The advantages of this type of financing include very low interest rates (0.5¢ per year), and a bonus system through which producers may end up paying less than they borrowed if they manage to pay back on time. 

For the 2020–21 harvest, R$ 33 billion were made available to small producers in the whole country. However, 75% of this amount went to the South and Southeast regions, while the North, where the Amazon is, only received 7% (R$2.3 billion). 

For Luiz Lourenço, executive manager for personal accounts at Banco da Amazônia (BASA), who also took part in the discussions, positive results will not be achieved through credit alone. “It is also very important to provide technical assistance and to engage people from the community who may get trained on finance, management, and the importance of funding. And on top of that, there should be no delay in the distribution of funds.”

Another example — Between 2019 and 2020, through Pronaf and BASA, the Nossa Senhora do Perpétuo Socorro do Rio Arimum Mixed Agroextractive Cooperative (COOMNSPRA) managed, for the first time, to obtain funds from a bank to finance the sustainable timber from the Verde para Sempre Extractive Reserve, in the state of Pará. The family cooperatives use forest management techniques in a project also supported by PCAB.

Thanks to this initiative, they avoided having to depend on intermediaries, and achieved greater autonomy in running their sustainable forest management plan in the municipality of Porto de Moz. The project was so successful they managed to pay the loan amount in advance.