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.
2.
What have been the main challenges encountered
by family farmers in joining the biodiesel chain in
the Pole of Biodiesel Serra da Capivara?
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
Implementation 2004



Partnership between
several institutions
Large implementation
Micro-reion São
Raimundo Nonato
targeted
Prefeituras Municipais
Sindicatos Rurais
Fetag-PI
Implementation 2004
Year
# Municipalities
# Farmers
Area (ha)
Implementation 2004/2005
14
1813
3626
Implementation 2005/2006
23
4485
9818
Implementation 2006/2007
42
7735
26842
(not executed)
The bank faced a 90% default and little castor
seed was commercialized
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
Total
Goal
Contracted
Planted
Commercialized
750
417
262
162
o
Goal: relating contracts to debt, without credit not interested
o
Contracted: interest in access to credit or other incentives
o
Planted: no access to capital, irregular rainfall
o
Commercialization: low productivity, selling earlier
Inclusion of family farmers
o
Harvest year
2008/2009
2009/2010
# of new farmers
Total
447
667
220
Farmers switching from BED to Petrobras
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