Brazil’s exports in iron ore, soybeans, oil, sugar, and meat have made it the tenth biggest economy in the world. Yet these industries are all land-hungry, meaning that Brazil’s growth is intimately tied to the destruction of its vital rainforests.
60% of Brazil is forested and the country hosts two thirds of the Amazon, a habitat that is rapidly heading towards collapse as land-clearing and logging increases.
Brazil must now decide how its rainforests can continue functioning as both the lungs of the planet and the engines of the national economy. Many say a stronger bioeconomy can allow Brazil to strike this balance between environmental protection and development.
Vanessa Pérez, global economics director at the World Resources Institute, is one of the voices calling on Brazil to cultivate its bioeconomy as a way of “unlocking the region’s economic potential while preserving its ecological heritage”.
Brazil has already embarked on this. Regional and private initiatives to grow different elements of the bioeconomy have proliferated. Most share a central focus that is critical to make it more financially rewards to leave the forest standing rather than logging it.
Small is beautiful in Pará
In November 2022, Pará state leaders presented its PlanBio bioeconomy plan at COP27, a project that will be funded by the state and federal government to at least $232 million until 2027.
The state of Pará is so far the only regional or national bioeconomy plan to come out of Brazil. Yet out of all the country’s regions, Pará could be the one poised to benefit most from a scaled and sustainable bioeconomy. Its territory covers the most populous part of the Amazon rainforest and since 2006 has had among the highest deforestation rates in the country, driven by cattle ranching.
Because Pará is also among the poorer states in Brazil, its bioeconomy plan has an emphasis on supporting small scale producers and their communities. Agricultural small-holders and extractive activities dominate the existing bioeconomy in Pará. Its biggest bio-based product for example is acai, the darling of the health food industry.
Pará’s smallholder producers who often do not see the full value of their products. The statistics on this are sobering. Enterprises based in the Amazon exported 955 products between 2017 and 2019. Of these products, 64 came from economic activities that do not involve large-scale forest-clearing. Amazon-based business saw only 0.17% of the eventual value of their products although they generated a revenue of US$ 176.6 billion per year on the global market.
To correct inequities like this, PlanBio has established a state-owned regional bank, called Banpara, to support small businesses that are unlikely to access capital from elsewhere. This credit lifeline could allow small-scale producers to expand from cultivation and harvest into processing.
Amazonia is one Pará-based beneficiary of the new bank. Without its support, the company would not have been able to build its processing factory which turns Amazonian fruits like acai into higher-value ingredients.
The cosmetics company safeguarding the Amazon
Natura and Co., a large Brazilian cosmetics multinational founded in 1969, has been working with small producers within Pará’s communities for years. Because it is the biggest name in sustainable economies around the Amazon, it gives a blueprint for the kinds of enterprises that Pará state will want to encourage under its bioeconomy plan.
Natura already contributes to sustainable economies around the Amazon because it represents a major source of demand for ingredients grown or harvested in ways that do not need deforestation.
Natura’s production now relies on a number of supply deals with cooperatives and small-scale producers in Pará state. One of them is with a Pará cooperative called Aprocamp which cultivates priprioca, an aromatic ingredient. Natura has been training locals to run a priprioca oil-extracting factory that is now under construction.
Natura’s business relationship with small-scale producers exemplifies the idea that the bioeconomy can serve conservation goals whilst also providing income to poor communities.
The kinds of resources Natura demands from its suppliers often depend on the unique habitats and ecosystems of the Amazon, incentivising suppliers adopt livelihoods that sustain rather than destroying forest ecosystems.
This model is paying off for some Amazonian communities already. About 8% of what Natura spent on raw inputs last year went for Amazon bioingredients grown or harvested by 41 communities.
The challenge for Pará state is now to encourage more Naturas to come into being. Right now, many local agro-industrial communities are heavily reliant on this single consumer.
In this situation, sustainable activity hangs on a thread: if Natura disappears, so too would the incentive for sustainable industries, leading communities to fall back onto forestry industries based on logging.
Pará looks ahead to higher value biotech
Agriculture right now dominates Pará’s bioeconomy. However, the state has plans to develop industries around higher-value bio-based products.
To achieve this, PlanBio has begun work on building a bioeconomy research centre for supporting researchers and startups interested in deriving advanced materials and chemicals from the raw materials of Amazonian biodiversity.
This will be a bioeconomy incubator for researchers and start-ups and should be finished before Belem hosts the 2025 global climate conference.
PlanBio will be building on existing currents in the Brazilian economy. Higher-value biotech is already thriving there such as Aché, a native pharmaceutical company that has built on the country’s biological heritage.
In 2006, Aché launched the first herbal medicine entirely developed in the country and more recently created BioProspera, a platform for discovering new compounds from nature with pharmaceutical value.
Three researchers working for Aché set up their own firm Nintx in 2021 which works on isolating and developing new compounds from Brazil’s biological resources to treat complex diseases.
Amazon bioeconomy already growing
Pará was the first public authority in Brazil to set up a targeted policy around developing its bioeconomy but other entities are also supporting the sector, particularly where they draw on Amazonian resources.
Amazon Investor Coalition is a non-profit organisation that has been developing bioeconomy value chains around the Amazon rainforest by linking up suppliers that draw on the forest in sustainable ways with buyers and potential investors.
Amazon Investor Coalition’s services are relatively accessible. It has four forms on their website: one for investors looking for portfolio assets, for startups seeking investment, for companies seeking supply, and for existing companies that are looking for markets.
These four areas – investment, companies, procurement, and marketing – are the basic areas that any bioeconomy plan at federal or regional level must flesh out if they are to nurture self-sustaining economies around the Amazon that lock in sustainable extractive practices.
Another organisation strengthening the Brazilian bioeconomy is the Amazon Fund, which invests in bioeconomy initiatives in the non-profit, university, and public sectors.
The long list of Amazon Fund’s funded projects highlights that there is already a lot of interest across Brazilian society in developing new ways of generating revenue from the Amazon that does not depend on destroying the habitat.
With research and interest so high, a national bioeconomy plan on the federal level is needed to increase investment, and foster cooperation between different ,segments of value chains.
The federal government has the institutional knowledge to embark on a national bioeconomy programme. The Bioeconomy Brazil-Sociodiversity Program within the government’s Ministry of Agriculture and Livestock is already tasked with promoting partnerships between the government, small and family farmers, community enerptises and business.
Political shift opens new doors for Brazil’s bioeconomy
The value of Brazil’s bioeconomy of course is heavily dependent on the continued health of the rainforest. This means that a fundamental prerequisite for growing the sector is that Amazonian deforestation comes to an end.
Under the previous Brazilian government led by Bolsonaro, clearing and illegal grew each year at an alarming rate. The party represented the interests of the agribusiness sector, which holds massive sway over national policies.
This changed when Brazil’s Worker’s Party led by Luiz Inácio Lula da Silva came to power. Deforestation is still a huge problem there but rates fell 66% between July 2022, when Bolsanaro was in power, and July 2022, under Silva’s new government.
Da Silva’s government has even more ambitious goals, announcing this year a plan to eliminate deforestation in the country by 2030.
The new president of Brazil may have strong environmental commitments but the task ahead is immense. Opposition parties have retained enough clout to blunt the environmental agenda of the new government.
Cattle ranching still holds huge political and economic sway in Brazil. With political culture still dominated by wealthy interests in agribusiness, forest-destroying sectors still draw much more investment than the bioeconomy.
The financial incentive is still overwhelmingly in favour of clearing the forest for cattle and soybean. Yet this does not mean that the bioeconomy is an economic dead-end for Brazil.
Once the value of rainfall production, clean air, and stable climate are factored in, preserving the Amazon forest has an economic value four times higher than the same land turned into cattle pasture, according to work by Carlos Nobre, a leading Brazilian scientist and climate change expert.
To achieve a bioeconomy large enough to make good on this promise of sustainable income generation, a national bioeconomy plan is needed from the federal government to coordinate and accelerate the multitude of private and public projects already happening on the ground.