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Local Food and the Emerging Economy

Insights + Opinion

Brad Masi

My first foray into local food systems work occurred about 20 years ago when I was a student at Oberlin College enrolled in an introductory environmental studies course. The professor split the class into several groups, each of which had to examine a daily activity of campus life, trace out the extended environmental impacts and then develop a sustainable alternative. Our group focused on the college dining systems. Excited about our class mandate, our group delved into one of the dining cooperatives on campus and decided to trace the environmental impacts of one meal. We wanted to map out where the ingredients from one meal came from and how the production and distribution of those ingredients impacted the environment. We quickly realized how difficult this assignment actually was. We could trace most of our ingredients to a distributor, but could find no information about who actually produced it or where it actually came from.

Overwhelmed by the complexity of tracing just one meal, we decided to focus on one food item that was consumed regularly and popular with just about everyone—apples. We determined that the coops were getting most of their apples from New Zealand in a box that was labeled “jet fresh.” We quickly honed in on the ecological impacts of consuming apples that were flown half way across the world to our co-op. Perhaps even more surprising, within a stones throw of the Oberlin campus, there was an abundance of multi-generational apple orchards dotting the old sandy beach ridges of Lake Erie’s ancestral lakes. We wondered why it was easier for apples to be brought in on jets than to be delivered from farms just down the road. It revealed to us just how globalized our food system had become and the increasing difficulty that farmers had accessing markets down the streets from their farms.

Thus, Oberlin’s local food initiative was born. After the class, a group of students continued to work through the co-ops to shift our purchasing to these local family orchards. Not only did the apples taste better, but we began building relationships with the farm families that produced these apples. My college experience was greatly enhanced by connecting with these local farms and realizing that a simple shift in purchasing allowed us to keep our dollars in the local economy while reducing the carbon being emitted to transport it from the other side of the planet. We were pleased that our efforts that first year directed about $10,000 of purchasing to these local farmers.

I didn’t realize it at the time, but our initiative was an act of social entrepreneurship. Many of the pieces needed for a sustainable local food economy already existed within our community. We just had to take some extra time to make those connections, work out logistics, and, over time, find other food ingredients that we could substitute in a similar manner.

Fast forward to today. Oberlin College spends almost a million dollars between the student cooperatives and college dining services. This same story has been repeated in communities throughout Northeast Ohio and the U.S.

A theme common to all of these local food initiatives is the extent to which they leverage already existing assets within communities and connect them in new and innovative ways.

Consider the growth of local farmers markets and Community Supported Agriculture programs. Most of these efforts connect urban neighborhoods with farmers in the surrounding rural areas. The neighborhoods create the spaces and networks with farmers and keep the food dollars circulating in the local food economy.

Many Great Lakes cities, including Detroit, Cleveland and Buffalo are utilizing the abundance of vacant lots to create food access in communities that have lost grocery stores and lack outlets for healthy foods. The vacant lots flip from community liabilities attracting litter and abandoned cars to thriving assets that process food waste into topsoil, feed people, connect communities and provide new entrepreneurial opportunities for everyone from youth to retirees.

Many communities contain empty buildings and abandoned commercial storefronts. These spaces are being converted into retail local food cooperatives, aggregation points for local food distribution or value-added processing kitchens.

Farms, both in cities and in the country, are increasingly utilized as ways to turn waste streams into productive assets, including utilization of waste vegetable oil to run farm equipment or delivery trucks, composting of food and other farm wastes to create topsoil, and conversion of manure into energy through bio-digestion.

Farms are increasingly being looked at as part of a regional effort to reduce carbon emissions. A well-organized and efficient local food system requires much less energy to transport and store food items, and soil can become an effective place to sequester carbon. In fact, sequestering carbon in agricultural soils not only reduces the carbon load in the atmosphere, but it increases soil fertility, tilth, and water storage and retention.

We live in a volatile time. We see the emerging results of an increasingly chaotic climate, from simultaneous record flooding and record drought to record outbreaks of extreme weather events. People are finding themselves in increasingly precarious economic situations, losing homes, businesses, savings and lacking the capital to initiate new ventures.

The Occupy Wall Street movement has begun to shift the national conversation, as people increasingly feel victimized by economic and political forces remote from their immediate control.

The growth of local food economies throughout the nation reveals one counter-balance to this trend where communities take stock of their own assets, from empty buildings and land to new relationships between rural and urban communities, and begin to grow a new economy rooted in social equity and the stewardship of the land. The Occupy Wall Street initiative is about many things to many people. Fundamentally, it is about how we can begin to wrestle control back over our own economic destinies in ways that do not liquidate our communities' soils and natural systems upon which we depend.

While the Occupy Wall Street movement has shifted the national conversation in some important ways, the real work ahead involves large-scale reinvestment in our own communities and regions. Can we begin to create models for local stock markets or community investment portfolios that leverage all forms of local capital, including money, time or under-utilized assets? Can we look to these mechanisms to begin to generate the local wealth and value needed to create truly regenerative economic systems that nurture instead of exploit life?

Just as my experience in Oberlin revealed, we have more power than we think. We just need to take a close look at what’s around us and begin with the assets that already exist within our own communities. Many communities are nurturing these assets and creating new connections and networks within and between communities. Through this work, an economy rooted in community and healthy ecosystems is beginning to emerge.

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Ola Elvestrun, Norway's environment minister, announced Thursday that it is freezing its contributions to the Amazon Fund, and will no longer be transferring €300 million ($33.2 million) to Brazil. In a press release, the Norwegian embassy in Brazil stated:

Given the present circumstances, Norway does not have either the legal or the technical basis for making its annual contribution to the Amazon Fund.

Brazilian President Jair Bolsonaro reacted with sarcasm to Norway's decision, which had been widely expected. After an official event, he commented: "Isn't Norway the country that kills whales at the North Pole? Doesn't it also produce oil? It has no basis for telling us what to do. It should give the money to Angela Merkel [the German Chancellor] to reforest Germany."

According to its website, the Amazon Fund is a "REDD+ mechanism created to raise donations for non-reimbursable investments in efforts to prevent, monitor and combat deforestation, as well as to promote the preservation and sustainable use in the Brazilian Amazon." The bulk of funding comes from Norway and Germany.

The annual transfer of funds from developed world donors to the Amazon Fund depends on a report from the Fund's technical committee. This committee meets after the National Institute of Space Research, which gathers official Amazon deforestation data, publishes its annual report with the definitive figures for deforestation in the previous year.

But this year the Amazon Fund's technical committee, along with its steering committee, COFA, were abolished by the Bolsonaro government on 11 April as part of a sweeping move to dissolve some 600 bodies, most of which had NGO involvement. The Bolsonaro government views NGO work in Brazil as a conspiracy to undermine Brazil's sovereignty.

The Brazilian government then demanded far-reaching changes in the way the fund is managed, as documented in a previous article. As a result, the Amazon Fund's technical committee has been unable to meet; Norway says it therefore cannot continue making donations without a favorable report from the committee.

Archer Daniels Midland soy silos in Mato Grosso along the BR-163 highway, where Amazon rainforest has largely been replaced by soy destined for the EU, UK, China and other international markets.

Thaís Borges.

An Uncertain Future

The Amazon Fund was announced during the 2007 United Nations Climate Change Conference in Bali, during a period when environmentalists were alarmed at the rocketing rate of deforestation in the Brazilian Amazon. It was created as a way of encouraging Brazil to continue bringing down the rate of forest conversion to pastures and croplands.

Government agencies, such as IBAMA, Brazil's environmental agency, and NGOs shared Amazon Fund donations. IBAMA used the money primarily to enforce deforestation laws, while the NGOs oversaw projects to support sustainable communities and livelihoods in the Amazon.

There has been some controversy as to whether the Fund has actually achieved its goals: in the three years before the deal, the rate of deforestation fell dramatically but, after money from the Fund started pouring into the Amazon, the rate remained fairly stationary until 2014, when it began to rise once again. But, in general, the international donors have been pleased with the Fund's performance, and until the Bolsonaro government came to office, the program was expected to continue indefinitely.

Norway has been the main donor (94 percent) to the Amazon Fund, followed by Germany (5 percent), and Brazil's state-owned oil company, Petrobrás (1 percent). Over the past 11 years, the Norwegians have made, by far, the biggest contribution: R$3.2 billion ($855 million) out of the total of R$3.4 billion ($903 million).

Up till now the Fund has approved 103 projects, with the dispersal of R$1.8 billion ($478 million). These projects will not be affected by Norway's funding freeze because the donors have already provided the funding and the Brazilian Development Bank is contractually obliged to disburse the money until the end of the projects. But there are another 54 projects, currently being analyzed, whose future is far less secure.

One of the projects left stranded by the dissolution of the Fund's committees is Projeto Frutificar, which should be a three-year project, with a budget of R$29 million ($7.3 million), for the production of açai and cacao by 1,000 small-scale farmers in the states of Amapá and Pará. The project was drawn up by the Brazilian NGO IPAM (Institute of Environmental research in Amazonia).

Paulo Moutinho, an IPAM researcher, told Globo newspaper: "Our program was ready to go when the [Brazilian] government asked for changes in the Fund. It's now stuck in the BNDES. Without funding from Norway, we don't know what will happen to it."

Norway is not the only European nation to be reconsidering the way it funds environmental projects in Brazil. Germany has many environmental projects in the Latin American country, apart from its small contribution to the Amazon Fund, and is deeply concerned about the way the rate of deforestation has been soaring this year.

The German environment ministry told Mongabay that its minister, Svenja Schulze, had decided to put financial support for forest and biodiversity projects in Brazil on hold, with €35 million ($39 million) for various projects now frozen.

The ministry explained why: "The Brazilian government's policy in the Amazon raises doubts whether a consistent reduction in deforestation rates is still being pursued. Only when clarity is restored, can project collaboration be continued."

Bauxite mines in Paragominas, Brazil. The Bolsonaro administration is urging new laws that would allow large-scale mining within Brazil's indigenous reserves.

Hydro / Halvor Molland / Flickr

Alternative Amazon Funding

Although there will certainly be disruption in the short-term as a result of the paralysis in the Amazon Fund, the governors of Brazil's Amazon states, which rely on international funding for their environmental projects, are already scrambling to create alternative channels.

In a press release issued yesterday Helder Barbalho, the governor of Pará, the state with the highest number of projects financed by the Fund, said that he will do all he can to maintain and increase his state partnership with Norway.

Barbalho had announced earlier that his state would be receiving €12.5 million ($11.1 million) to run deforestation monitoring centers in five regions of Pará. Barbalho said: "The state governments' monitoring systems are recording a high level of deforestation in Pará, as in the other Amazon states. The money will be made available to those who want to help [the Pará government reduce deforestation] without this being seen as international intervention."

Amazonas state has funding partnerships with Germany and is negotiating deals with France. "I am talking with countries, mainly European, that are interested in investing in projects in the Amazon," said Amazonas governor Wilson Miranda Lima. "It is important to look at Amazônia, not only from the point of view of conservation, but also — and this is even more important — from the point of view of its citizens. It's impossible to preserve Amazônia if its inhabitants are poor."

Signing of the EU-Mercusor Latin American trading agreement earlier this year. The pact still needs to be ratified.

Council of Hemispheric Affairs

Looming International Difficulties

The Bolsonaro government's perceived reluctance to take effective measures to curb deforestation may in the longer-term lead to a far more serious problem than the paralysis of the Amazon Fund.

In June, the European Union and Mercosur, the South American trade bloc, reached an agreement to create the largest trading bloc in the world. If all goes ahead as planned, the pact would account for a quarter of the world's economy, involving 780 million people, and remove import tariffs on 90 percent of the goods traded between the two blocs. The Brazilian government has predicted that the deal will lead to an increase of almost $100 billion in Brazilian exports, particularly agricultural products, by 2035.

But the huge surge this year in Amazon deforestation is leading some European countries to think twice about ratifying the deal. In an interview with Mongabay, the German environment ministry made it very clear that Germany is very worried about events in the Amazon: "We are deeply concerned given the pace of destruction in Brazil … The Amazon Forest is vital for the atmospheric circulation and considered as one of the tipping points of the climate system."

The ministry stated that, for the trade deal to go ahead, Brazil must carry out its commitment under the Paris Climate agreement to reduce its greenhouse gas emissions by 43 percent below the 2005 level by 2030. The German environment ministry said: If the trade deal is to go ahead, "It is necessary that Brazil is effectively implementing its climate change objectives adopted under the [Paris] Agreement. It is precisely this commitment that is expressly confirmed in the text of the EU-Mercosur Free Trade Agreement."

Blairo Maggi, Brazil agriculture minister under the Temer administration, and a major shareholder in Amaggi, the largest Brazilian-owned commodities trading company, has said very little in public since Bolsonaro came to power; he's been "in a voluntary retreat," as he puts it. But Maggi is so concerned about the damage Bolsonaro's off the cuff remarks and policies are doing to international relationships he decided to speak out earlier this week.

Former Brazil Agriculture Minister Blairo Maggi, who has broken a self-imposed silence to criticize the Bolsonaro government, saying that its rhetoric and policies could threaten Brazil's international commodities trade.

Senado Federal / Visualhunt / CC BY

Maggi, a ruralista who strongly supports agribusiness, told the newspaper, Valor Econômico, that, even if the European Union doesn't get to the point of tearing up a deal that has taken 20 years to negotiate, there could be long delays. "These environmental confusions could create a situation in which the EU says that Brazil isn't sticking to the rules." Maggi speculated. "France doesn't want the deal and perhaps it is taking advantage of the situation to tear it up. Or the deal could take much longer to ratify — three, five years."

Such a delay could have severe repercussions for Brazil's struggling economy which relies heavily on its commodities trade with the EU. Analysists say that Bolsonaro's fears over such an outcome could be one reason for his recently announced October meeting with Chinese President Xi Jinping, another key trading partner.

Maggi is worried about another, even more alarming, potential consequence of Bolsonaro's failure to stem illegal deforestation — Brazil could be hit by a boycott by its foreign customers. "I don't buy this idea that the world needs Brazil … We are only a player and, worse still, replaceable." Maggi warns, "As an exporter, I'm telling you: things are getting very difficult. Brazil has been saying for years that it is possible to produce and preserve, but with this [Bolsonaro administration] rhetoric, we are going back to square one … We could find markets closed to us."

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