The global market for these products, such as cocoa beans, brazil nuts, black pepper, is huge, but the Amazon still has a very small share. What is missing?
How can we promote forest-friendly economic development in the Brazilian Amazon? The most frequent proposals revolve around the sale of carbon credits, the discovery of new medicines or cosmetics, and the industrialization of forest products that it currently sells in raw or crude form. In previous columns, I examined the pros and cons of each of these alternatives.
Now, I draw attention to a fourth strategy that has not yet received the attention it deserves: The region can produce and export much larger quantities of the fresh or minimally processed forest-friendly products that it already produces. Forest-friendly products are those that act as drivers of forest restoration, recovery of degraded areas, economic inclusion of smallholders and traditional peoples, and the creation of good jobs. In general, forest friendly products comprise non-timber forest products such as Brazil nuts, agroforestry systems such as cocoa beans, fish and fish farming, and tropical fruits.
The market share of the Brazilian Amazon in these segments remains minimal. Across all 64 products, its share does not reach 0.2%.
Producers in the Brazilian Amazon have already demonstrated they can produce these goods efficiently and with quality. Considering the three-year period from 2017 to 2019, companies based in the region accrued US$300 million a year in revenue by exporting 64 different forest-friendly products. The products that generated the most revenue were black pepper, saltwater fish such as snapper and yellow hake, and crude palm oil.
The global market for these products is truly gigantic. Worldwide, the 64 products that the Amazon already exports generate US$176 billion a year in revenue to its exporters. Some of these goods, such as cocoa beans, palm oil, and coffee, have multi-billion dollar markets. Others may seem smaller, but still have significant markets. The market for black pepper, for example, is estimated at US$1.5 billion per year. Honey exporters accrue another US$2 billion. And companies that export tropical fruits like mangoes and pineapples accrue more than US$2 billion a year for each of these goods.
The market share of the Brazilian Amazon in these segments remains minimal. Across all 64 products, its share does not reach 0.2%. This figure suggests that there is enormous room for growth. And the evidence suggests this growth can be achieved even before the Brazilian Amazon resolves its major structural problems. After all, the top exporters of forest-friendly products are based in other tropical countries, equally poor or even poorer than the Brazilian Amazon. For example, the top exporter of black pepper is Vietnam. The top exporter of brazil nuts is Bolivia. And the top exporter of hearts of palm is Ecuador.
But how can the Amazon take advantage of this opportunity? Faced with this question, many people answer by saying that the region needs greater access to the factors of production.
But how can the Amazon take advantage of this opportunity? Faced with this question, many people answer by saying that the region needs greater access to the factors of production. The good news is that these factors already exist in abundance. To wit, there is no lack of land. According to TerraClass satellite data, 24 million hectares of the Amazon have already been deforested but subsequently abandoned or degraded. Another 48 million have been deforested but remain underutilized. Together, these areas cover a territory almost the size of France and the UK put together.
There is also ample labor supply. The Amazon has 21 million inhabitants over the age of 15. According to IBGE data, 7 million of these people do not study or work. And more than one million other people want to work but cannot find a job.
If the main ingredients are present, what is missing? Many people point the finger at governments, saying that political will is lacking. They forget, however, that political will is the balance of multiple forces.
Surprisingly, there is a lot of money available. In 2022, the Fundo Constitucional de Financiamento do Norte (FNO) planned to invest R$13 billion in the region. The Amazon Fund has R$3 billion on hand to finance projects. Private national funds such as Fundo Vale and Fundo JBS pela Amazônia also have plenty of money. And the LEAF Coalition, an initiative that brings together the governments of the US, UK, Norway, and large companies like Nestle, Amazon, and BlackRock, has raised another R$5 billion to protect rainforests around the world.
If the main ingredients are present, what is missing? Many people point the finger at governments, saying that political will is lacking. They forget, however, that political will is the balance of multiple forces. By focusing exclusively on elected leaders, they forget the producers, both current and expected, who can demand action. Identifying and mobilizing these people may be the best way to forge ahead.
