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USDA Invests $7 Million to Research Small Farm Challenges

Food

Yesterday, the U.S. Department of Agriculture (USDA) Secretary Tom Vilsack announced more than seven million dollars in funding to support research on the profitability of small and medium-sized family farms, including their potential role in building local and regional systems. This announcement came amidst a flurry of other USDA news and program announcements in support of small farmers.

Oklahoma State University will evaluate the role of small and mid-size farms and their impact in local and regional food systems. Photo courtesy of Shutterstock

These grants were awarded through the Agriculture and Food Research Initiative (AFRI), which is administered by the National Institute of Food and Agriculture (NIFA)—USDA’s intramural grant-making agency related to agricultural research, education and extension. The small and medium-sized family farm subprogram within AFRI was added over a decade ago following a campaign by National Sustainable Agriculture Coalition (NSAC) backed by a variety of members of Congress.

AFRI is USDA’s largest competitive research grants program, with an annual budget of $274 million in Fiscal Year (FY) 2013 and $316 million for FY14. And while the awards announced this week are a small portion of AFRI’s total program funding levels, the research funded by these grants will nonetheless have significant impact on our understanding of how small and medium-sized farms can remain economically viable amidst the changes in our current agricultural landscape.

For 2013, AFRI’s Small and Medium-Sized Farm program focuses on research, education and extension projects that develop new ideas on how to increase the viability and competitiveness of small and medium-sized dairy, poultry, livestock, crop and commodity operations. This includes developing strategies to increase market access; developing efficient local and regional food systems; and assessing the impacts of changes in input costs, markets and credit on farm entry, transition and the economic viability of small farms.

In total, 10 research grants were awarded for FY13, including several grants that focus on how small and mid-scale farms can contribute to local and regional food systems and increase profitability through more environmentally sustainable production systems. Some projects funded in these areas include:

Michigan State University’s Center for Regional Food Systems (an NSAC member) will lead a project focusing on the development of profitable Michigan-based meat and livestock value chains supplying local and regional markets. This research will expand the Center’s Livestock Work Group, as will another research project funded on the production and supply side strategies for a local, Michigan grass-finished beef production system. Another MSU grant will examine business networks for food hubs in Michigan and Missouri and is tied to the Center’s Michigan Food Hub Network.

In Idaho, researchers at the University of Idaho will investigate ways to overcome constraints in serving local and regional markets in the Intermountain West, given its vast geography and often large distances between producers and consumers. Research will focus on identifying strategies for aggregation, storage, processing and distribution for small and medium-sized farmers to access local and regional vegetable and livestock markets.

Researchers at the University of Illinois in Urbana-Champaign will support research, education and outreach for designing and implementing more sustainable agroecosystems in the Upper Sangamon River Watershed (a typical region of the Midwest primarily dominated by corn and soybeans) by focusing on local food and biomass production for small farmers in the region.

Oklahoma State University will evaluate the role of small and mid-size farms and their impact in local and regional food systems. Specifically, this project will assess the economic development benefits that can be derived from more localized food systems.

Researchers at the University of Wisconsin will work with small and mid-sized diversified vegetable farms in Wisconsin who are selling into multiple local and regional food markets in order to develop strategies to help them identify better balances between diversification and specialization in the crops grown on their farms.

In Vermont, researchers at the University of Vermont will assist decision-making by rural farm families to increase the sustainability and competitiveness of small and medium-sized farms, to strengthen the local economy with sustainable food production through the adoption of innovative and environmentally sustainable farming practices.

Kentucky State University researchers and extension agents will work with small, limited resources, socially disadvantaged, beginner and women farmers through workshops, meetings, one-on-one education and Extension Agent training in order to increase the efficiency and utilization of these farmers across the state.

Applications for the next round of funding for FY 2014 were due earlier this week, and awards are not expected to be announced until later this year.

To see a list of complete projects for 2013, click here.

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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."

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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."

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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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