April 9, 2012

Low Carbon Agriculture Program in Brazil off to Slow Start

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

In its desire to promote more sustainable agriculture, the Brazilian government started a program two years ago aimed at reducing carbon dioxide emissions by the adoption of sustainable agricultural practices. The program, called Low Carbon Agriculture (ABC), offers financing opportunities for farmers and ranchers to adopt these practices, but thus far, it has met with only limited success.

In its first year of operation during the 2010/11 growing season, only 2.9% of the funds allocated for the program were actually applied to approved projects. In its second year during the 2011/12 growing season, approved projects totaled R$ 356 million, but this represented only 11.3% of the available funds. Therefore, during the first two years of the program, there is still R$ 2.79 billion waiting to be allocated.

Officials from the Parana Federation of Agriculture (Faep), who are responsible for administrating the program in the state, feel the low participation rate stems from the lack of trained technicians that can assist the farmers and ranchers in developing appropriate projects and applying for the funding. As a result, Faep is increasing their efforts to train local agronomist who would then assist farmers and ranchers in developing appropriate sustainable agricultural practices. Once this training program is complete, they feel participation in the ABC program will increase significantly during the 2012/13 growing season.

The beefed up Faep training program in Parana consists of six one-week training programs located in six different cities throughout the state. Each program will train 30 local agronomists for a total of 180. The agronomist chosen for the program are already working in the countryside with their farmer clients. In Brazil, if a farmer obtains a production loan from the Bank of Brazil, he must employ a consulting agronomist to insure that his farming operation has the best agronomic practices. It's these practicing agronomists that Faep is interested in training.

Since the ABC program is still relatively new, getting farmers and ranchers to submit projects has been a hard sell because the return on their investment in sustainable practices is uncertain. With domestic soybean prices in Brazil at record levels, it should be much easier to justify additional investments.

Faep would like to see the trained agronomist assist the farmers and ranchers develop the projects and assist them in implementing the sustainable practices during the first growing season, but in subsequent years, the farmers or ranchers should be able do it automatically.