COPLA-Bolivia Programmeg

i iBrazil nut value chain and poverty in Boliviapoverty in Bolivia

Presentation based on a paper by Pablo Von Vacano and OsvaldoPablo Von Vacano and Osvaldo Nina, edited by Roberto Telleria (rtelleria@gntp.org) and Massimiliano Cali 9, December, 2009

London, 3 - 9 August 2008

Content Introduction Introduction

Exports of Brazil nuts

Ch i d i Chain and region

Conclusions

Discussion

Where is the Brazil nut production?

Characteristics:

High territorial Lack of social - economic

MAMUNAB

ginequality politic ownership

- High biodiversity;High biodiversity;- Hydrologic non-salty net;- Cultural diversity;- Natural-resource based economy.Natural resource based economy.

The Brazil nut tree

Brazil nut coconut and fruit

What we wanted to find out?

¿Can exports of Brazil nut help to reduce poverty i B li i (A i i )?in Bolivia (Amazonia region)?

http://www.cop-p pla.net/es/system/files/Informe_Final_Castanha.

pdfpdf

CommunicationsCapacity building (training courses)

Interinstitutional Strengthening of institutions

Dialogue k platform) institutions(networking)

Research (evidence)

Model

E i h i

Social and institutional development

Entrepreneur development

Exporting chain

Incidence over the  Direct benefits to  Incidence in local domestic industrial sector family units government

Generation of pro‐poor socio‐economic 

conditions

HEnvironmental sustainable Human development

Environmental sustainable development

• Export quality

Substitutes complements brazil nuts, walnut, hazelnut, almondChain requirements

Brazil nut chain

6aFinal

• Competitive prices

Imports

,

Connecting process

5Brokers

Final consumer

6bFair trade

p-

exports1 Treepopulation

• Sustainable harvesting

• Protection –

T it

Market intelligence

(organic)

Brazil nut

deforestation activities

2 3b

4Factories

(beneficiadoras)

To recruit and hire zafreros

Supervi

Middle men

Brazil

Brazil nut harvesting 3a

Communities

2Zafreros

(harvesters)Brazil

nut stocking

up

Contract 3bBarraqueros

(beneficiadoras)Supervision of zafreros

Account

Brazil nut

supply

• Capital

• Cash• Food• Health services

uping,

zafreros • Cash

• Labour force

M k t

• Capital• Raw material• Labour force• Export quality• Markets

• Cash• Food• Health services• Housing

• Housing • Market

Source: Own elaboration

Main producers of Brazil nuts, 2008

Italy4%

otros10%

N th l dNetherlands6%

Brazil8%

PeruBolivia

Peru11%

61%

Main destinations of Brazil nuts, 2007

ESTADOS UNIDOS

REINO UNIDO43%

DE AMERICA 30%

PAISES BAJOS 8% ESPAÑA8%

ALEMANIA 7%

AUSTRALIA 5%

ITALIA 4%

ESPAÑA 3%

Bolivian exports of Brazil nuts 2003- 2007 (thousands Bolivian exports of Brazil nuts 2003 2007 (thousands of USD)

80000

50000

60000

70000

30000

40000

50000

10000

20000

02003 2004 2005 2006 2007

Total 0801210000 / Nueces del brasil con cáscara Total 0801220000 / nueces del brasil sin cáscara

Bottle necksP B il d i ? Poor or no access to Brazil nut trees produce organic nuts?

No trustable information on the number of trees no investment on improving castaña technologyimproving castaña technology.

Castaña rots in the forest and poor storing facilities and transportationtransportation

High cost of food supply remote forests / adobe houses.

Legal framework and land tenure system.

High production costs affected by inefficient and expensive services g p y pprovided by the government (electricity makes up to 40% of total production costs).

Diffi l i i i d h i b Difficulties meeting sanitary and phyto-sanitary measures set by developed countries.

Cl b tit t ( l t h l t l d) / diffi lt t dd l Close substitutes (walnut, hazelnut, almond) / difficult to add value as import taxes apply.

Statistical figuresg Poverty in the region dropped from 60% 55% (2001 – 2007)

butbut… 64% to 52% in the rural area, yet in urban areas it remained

almost constant.

Transformations in the labour market agriculture 2001 = 44,2% ; while 2007 = 15%while 2007 15%.

Other sectors such: Industry (2007 = 17%), trade (2007 = 30,3%) d i ( l) h i d b i lland services (2007 = 22,5% el) have increased substantially.

Gender variable: substantial increase of women in the sectorGender variable: substantial increase of women in the sector 2001 = 5,5%; 2007 = 18% (factories prefer to employ women).

Source: INE data 2001 2007Source: INE data 2001-2007

Distribution of value added

(Bs./Kg.)

Selling priceStage Purchasing

priceSelling price

Value added

0 00 2 60 2 60Brazil nut harvesters 0.00 2.60 2.60

Land owners 2.60 6.50 3.90

Female workers (beneficiadoras) 6.50 9.35 2.85

Other industrial processes 9.35 19.50 10.15

FOB price (exports) - - 19.5

Source: own elaborationSource: own elaboration

General figuresZ f 2 6 B /K 70 k /d 90 d B 16 380 Zafreros 2.6 Bs/Kg average; 70 kg/day, 90 days Bs. 16.380 (USD 2.340) . Costs: food, health

Barraqueros (adobe house)/communities 6.5 Bs./Kg. average sell 3.9 Bs./Kg. 50.000 hectares Bs. 195.000 (USD 27.850). Costs: transport, foreman, path cleaning/opening, storing and forest

concession tax.

Woman workers (quebradoras) 2.85 Bs./Kg. Average 16 Kg /day 25 days Bs 1.140 (USD 160) (Women enjoy social benefits established by low).

Factories (beneficiadoras) Through processing processes and trading they make 10.15 Bs./Kg. value added.

C t l i ti t ff ( d i ) d d i i t ti b ki i l Costs: logistic staff (e.g. drivers) and administration, baking social security, transport to ports, energy, depreciations, commissions to brokers, taxes, bank interests and services.

Factory employs earn as much as quebradoras Factory employs earn as much as quebradoras.

Transporting Brazil nuts

Conclusions

The castaña boom was not no fue accompanied by financial sector The castaña boom was not no fue accompanied by financial sector development / support.

Two complementary visions coexist (different cultural schemes):

Amazonic mentality (harvesting), present in local population both rural and urban oriented to consumption, no savings no investments

Occidental mentality trade, savings, less expending

State is absent from the region (no support low relative State is absent from the region (no support, low relative population)

The beneficiadoras are the most important economic actors for dynamics of economic and institutional development.

Around beneficiadoras many small enterprises grow which in turn create multiplicatory effects.

Shops and food stores in general define supplying, selling and crediting policies directed to the economic cycle ofand crediting policies directed to the economic cycle of castaña. E.g. moto importers sell important quantities particularly before harvesting (November – February). In Riberalta city (about 50000 people) annually at least 4 000Riberalta city (about 50000 people) annually at least 4.000 new motorcycles are sold.

The castaña industry by itself is able to generate income for all actors The castaña industry by itself is able to generate income for all actors and members of the chain, but the “spillovers” towards other industrial sectors are limited.

Households that have more chances to move away from poverty are those that are more involved to different parts of the chain, and those pwho can capture resources with more intensity.

Th t ñ b i i t ti ti it Gi th t th i The castaña business is an extractive activity. Given that there is no “modern technology to harvest cataña, poor roads, the landscape is very much intact and preserved.