First-ever credit line for indigenous and traditional communities engaged in Brazil nut production
With support from the United States Forest Service and USAID/Brazil, Pacto das Águas organization enabled the inclusion of collectors in the low interest rates national program to finance their operation.
"In the beginning, our castanheiros (the local term for Amazon nut gatherers) were suspicious. However, after the first loan was approved and the money started flowing into their account to finance their production, the news spread, and other castanheiros approached us to regularize their situation and have access to the funds." That is how Stephanie Rezende, technical adviser to the Forest Pact, summed up the initial reaction of indigenous and traditional peoples in the state of Rondônia when they learned that they could now benefit from bank credit lines.
For the first time, Amazon nut producers will be able to obtain loans from the National Family Agriculture Support Program (PRONAF), a funding scheme linked to the Brazilian government. This will be possible thanks to a partnership between the Pacto das Águas and the Cresol Baser Rondônia cooperative.
The agreement is an outcome of a project launched in 2016 by the Pacto das Águas in partnership with the United States Forest Service (USFS), under USAID/Brazil's Partnership for the Conservation of Amazon Biodiversity (PCAB).
When other farmers apply for a loan, they usually offer their land as collateral. Indigenous and riverine producers, however, do not hold titles to their land, so it has always been difficult for them to access credit. As a result, they pay higher interest rates to middlemen when they need working capital, or have to rely on the sale of their nuts at market prices. Access to capital before production will now enable them to plan their expenses and buy inputs, such as fuel and equipment.
"The plan is to help traditional people stand on their own feet, and become independent producers," added Stephanie. This independence contributes to management autonomy and strengthens conservation actions aimed to support the standing forest and its biodiversity.
"When traditional people took working capital, the castanheiros received little money for their product and were often in debt. In addition to creating a chain of buyers paying a fair price, the project is also helping to make funding available. The goal is to ensure Amazon nut producers have more control and self-governance," explained Kirsten Silvius, USFS technical advisor.
Beneficiaries – The first beneficiaries of this new credit line will be the residents of the Igarapé Lourdes indigenous land (TI), in the municipality of Ji-Paraná (380 km from state capital Porto Velho). Their TI covers an area of 185,534 hectares, where the Gavião and Arara peoples live.
Américo Gavião, the first local producer to have his application approved, intends to start using the funds as early as October when the Amazon nut season begins. "I feel honored to be the first indigenous person to receive a loan. We know that it will not solve all our problems, but it is a big step forward. It will give us access to the market, and visibility to the work of all indigenous peoples, in addition to bringing us peace of mind," said Américo.
Another 17 producers are eligible to obtain credit from October onwards. "Indigenous and extractive producers were unable to access these lines because they had no guarantees to offer to banks and credit unions. Through a partnership with the US Forest Service and USAID, we were able to create guarantees to finance. The Pacto das Águas becomes responsible to guarantee the payment”, said Sávio Gomes, project coordinator.
Other achievements – The Pacto das Águas is a not-for-profit organization (learn more here) created to provide alternative sources of income to Amazon communities, supporting the creation of socio biodiversity product chains.
Sávio Gomes points out that, through their partnership with the USFS, they have managed to move forward with creating a Brazil nut production chain in the two indigenous lands and three extractive reserves that the project has been supporting in the state of Rondônia.
Due to the COVID-19 pandemic, Sávio Gomes said that the commercial prospects for this year's harvest were very negative. However, thanks to the Brazil Nut Revolving Fund/Working Capital scheme, it was possible to acquire a significant share of the production and sell two hundred tons of nuts. In addition, for the first time they were also able to process their products, and thus sold another six tons of processed nuts.
"We hired a commercial officer, whose only job was to sell our nuts. We also developed several strategies, even before the pandemic," he said. He pointed out that, thanks to the structure put together in recent years with support from the USFS and USAID – including drying equipment and sheds, and the purchase of boats and vehicles – they have been able to reach their current status.
For the next harvest, they have already received orders for at least five tons every two months. In addition to Rondônia, Rede da Floresta (the Forest Network) also sells to the Northeast, Southeast, and South of Brazil. "For the first time in 12 years, we will start the harvest with excellent prospects because we managed to sell the product, return the proceeds to our working capital fund, and already have a forecast of how many tons we will be able to buy. This provides additional security to our producers," he added.