Case Story Brazil

Bio-Energy in Family Farming

A new sustainable perspective for the rural sector in Brazil

September 2013

Small scale family farming represents 85% of the agrarian structure in the State of Paraná in Brazil. According to the National Institute of Settlement and Agrarian Reform/INCRA and the Food and Agriculture Organisation of the United Nations/FAO, about 13.8 million people, or 77% of the population work in the agriculture sector. There are about 4.1 million family establishments, which produce almost 40% of the gross value of agricultural and livestock production, or 60% of the food consumed by the Brazilian population. Around 70% of the beans and 84% of the cassava, important food in Brazil, come from this source, as well as 58% of the swine production, 54% of the dairy cattle, 49% of the maize and 40% of the poultry and eggs. The efficiency and eventual success of any project for sustainable growth in the State of Paraná depends directly on the capacity for mobilizing the people, not only because of its economic importance in current food production, but also for the real possibility of adding a new function to the traditional agrarian sector, that of generating renewable energy.

The agricultural sector is slow to renew itself. Only 23% of small establishments (farming units or small holdings) had access to financial support in the four years prior to this study. The Brazilian Government spotlighted family farming by placing it in the portfolio of a specific ministry, the Ministry of Agrarian Development/MDA. In this ministry is the National Office for Family Farming (Secretaria Nacional de Agricultura Familiar) that has established and has been improving the National Program for Strengthening Family Farming/ PRONAF (Programa Nacional de Fortalecimento da Agricultura Familiar) starting in 1994/95. At that time an endowment of R$ 100 million was established as a family farming credit. In 2002, PRONAF offered a credit line of R$ 2.3 billion and today, after exponential growth, it offers credit of R$ 16 billion which may allow family farms to overcome the old characteristic pattern of need. After all, according to the MDA, the family farming segment has been increasing its productivity by 3.8% a year.

Over at least four decades in Brazil both family farming and industrial farming steered their operations towards specialization, single cropping and livestock production, all highly dependent on chemical inputs, including for example fertilisers. The prices of the chemical products fluctuate in a roller-coaster way with substantial unpredictability. There are no surplus funds for promoting the sector’s modernization or for investments in environmental services.

In both the environmental and energy contexts, Brazil is inefficient in its main business of producing foodstuffs. In the production of the main products the sector generates by-products with no market value. There are huge amounts of solid residues and other wastes not being used. They end up becoming significant environmental liabilities at a very large scale. It would be better to transform these environmental liabilities into opportunities for the production of energy and bio-fertilizers.

Among all the sources of renewable energy available in the countryside, biomass residue is the most accessible and at a low cost. That means it has the best cost benefit ratio available in rural areas in Brazil. It must be pointed out that 80% of the Brazilian cities have less than 50 thousand inhabitants. Family activities in agriculture are directly reflected in the specialized sectors of local commerce and industries that supply them with machines, raw materials, seeds, tools etc. Furthermore, local services are also stimulated by family farming and are established in direct dependence of harvest seasons or the financial flows of the trade on the products generated.

By adding bioenergy generation to small scale family farming production leads to a positive impact upon the small towns. A new local economy is mobilised which can include the following, and more: design engineering, electrical and mechanical maintenance, assistance for the biological control of the biodigesters, trade of equipment, raw materials, machinery, engines, generators, piping, control panels, electrical grid connections of low, medium and high tension. This increased activity strengthens the dynamism for all the local energy economy, through which sales is done by means of distributing concessionaries and competitive public bids which generate longterm public contracts at stable prices.

Distributed power generation is one of the keys to make family farms viable as micro-producers of bioenergy. The system of distributed power generation is centred on the possibility of generating energy and supplying it to the distribution grid. In some countries bioenergy is generated by microgenerators as part of programmes sometimes dubbed “smart grids”, which allows the sharing of the distribution grids with micro-generators as well as with services of data transmission. As a consequence, through effective control and monitoring new services can be made available within the existing power distribution networks. There is a specific and consolidated new regulation for operations with Distributed Generation: the Resolution 390, signed in December 2009 by the National Electric Energy Agency/ANEEL. This Resolution establishes the legal prerequisites for distributed energy generation with renewable sources.