81270669-Strengthening Private Sector Engagement, Cooperative Management, Vocational Training and Access to Financing

The project ‘Bioeconomy and Value Chains’ is a BMZ-financed technical cooperation project with the Secretariat of Family Farming and Cooperativism (Secretaria de Agricultura Familiar e Cooperativismo, SAF) of the Brazilian Ministry of Agriculture, Livestock and Food Supply (Ministério da Agricultura, Pecuária e Abastecimento, MAPA). Its stated objective is: Cooperatives and associations of local communities have expanded the commercialization of their products in value chains that are a priority for the development of the sustainable and inclusive bioeconomy in the Amazon. The relevance of this objective stems from the significance of the Amazon rainforest for the global climate. Amazon forests store large amounts of carbon, but since the early 1970s, nearly 20 % of the forest cover has been destroyed. Until 2012, there was great success in curbing deforestation (reduction of annual deforestation rate by 65 %), but since then it has been increasing again significantly. Large parts of the rural population in the region (approx. 30 % of the total 25 million inhabitants of the Amazon area) make their living on the basis of the use of natural resources. The protection of the rainforest can only succeed in the long term if its economic benefit for the local population is also increased. This is what the project intends to do. There are several challenges that will be worked on in parallel. First of all, public policy does not always adequately consider the specific needs of (collective) enterprises of the sustainable and inclusive bioeconomy. This will be worked on in Output 1 which aims to develop bioeconomy approaches in policies and programs on all levels of government. Important partners will be existing governance structures such as the regional trade chambers that strengthen coordination between the federal and regional levels. In addition to private sales channels, this output focusses strongly on public procurement programs to strengthen revenue and income development in priority value chains. Secondly, the private sector is interested in the sustainable and inclusive bioeconomy but faces challenges to create lasting business relationships, such as little knowledge about local conditions and little experience on the part of suppliers. These will be surmounted in Output 2 by using mechanisms such as the already tested develoPPP.de approaches, but also alliances with local communities that can involve regional or smaller companies. Furthermore, the expansion of multi-institutional dialogue processes on priority value chains shall improve the development of business areas and the inclusion of sustainability criteria. Thirdly, cooperatives and associations in the Amazon lack management capacities to meet the growing demand for their products. Output 3 is intended to improve the management skills of the leadership staff in organizing entrepreneurial processes such as accounting, financial management, production planning or logistics. Corresponding procedures and processes for capacity building are to be developed and tested initially in selected cooperatives. Next, apart from fulfilling the more immediate needs regarding the management of collective enterprises, the project aims to foster the formation of human capital in the region that can attend these needs more sustainably. For this, in Output 4, vocational training approaches are to be used to permanently anchor the training courses on sustainable bioeconomy in educational institutions. Finally, cooperatives, associations and SMEs of the sustainable and inclusive bioeconomy lack the capacities to access financing. In order to obtain credit from public (e.g., PRONAF) and private sources (e.g., Impact investors), they need to perform market studies and cost modelling, detail technical specifications and convincingly frame expected socio-economic impacts and their monitoring. The project aims to support cooperatives and enterprises in these tasks in Outputs 5.