There are three fundamental rules of financial planning: (1) save continuously, (2) invest in a diversified portfolio of assets and (3) exercise patience via a long-term strategy. This common-sense advice is at the heart of Conservation Agriculture (CA), a land-management philosophy that seeks to reconcile the technologies of modern agriculture with the time-worn practices of organic farming. These include multi-crop systems that minimise risk from weather, pests and markets, and the spatial and temporal rotation of crops. When integrated, these practices will increase soil organic matter (carbon), which improves the water holding capacity and the nutrient status of soils. Agroforestry systems are particularly advantageous because deep-rooted perennials contribute to evapotranspiration, which supports regional rainfall, while individual farmers benefit by reducing energy and labour costs, as well as locking in a long-term revenues stream.
Agribusiness is not unsympathetic to common-sense advice, and most farmers have diversified their choice of crops and adopted minimum tillage technologies. Nonetheless, they almost invariably choose industrial commodities (soy, maize, sorghum, sunflower, cotton) and genetically engineered varieties designed for use with herbicides. Plantations are almost always composed of exotic species (eucalyptus, pine or gmelina). A few corporate entities have allocated a portion of their land to an integrated production model known as ILFP (Integração Lavoura-Pecuária-Floresta), a type of industrial agroforestry that seeks to optimise the benefits from three major production systems (row crops, livestock, tree farms). Nonetheless, the overwhelming majority of large-scale farmers are enamoured with (addicted to) the financial returns from monoculture, and they are not likely to change their business models.

Ranchers might be more prone to changing land-management practices because they have a surplus of under-utilized land that has suffered from poor management, as evidenced by their use of joint ventures with farmers as a strategy to restore degraded pasture. Nonetheless, cattlemen (and women) belong to a conservative cultural tradition that is notoriously resistant to change. They will adopt new technologies but only after there is a clear demonstration of economic benefit – preferably one they can observe on a neighbor’s landholding. A solid majority are in violation of the Forest Code, and many have made a legal commitment to come into compliance via a mechanism known as a TAC (see above). Most have not followed through on these commitments because of weak enforcement mechanisms, but that may change if future ESG finance obligations force reforms onto beef supply chains.

Conservation agriculture, agroforestry and reforestation are key components of Agricultura de Baixo Carbono, an innovative finance programme managed by Banco Nacional de Desenvolvimento Econômico e Social (BNDES). The bank has a long and unfortunate history of funding infrastructure projects in the Amazon (see Chapter 2), but it has the financial power to influence development, at least with the corporate sector. In 2021, BNDES announced it would float green bonds on international capital markets in collaboration with the Interamerican Development Bank (IDB); some of those resources would be used to fund projects dedicated to ABC-like investments.

An opportunity for smallholders

Smallholders should be more willing to diversify their production systems and adopt practices that increase resilience. Mitigating risk is integral to their livelihoods because crop failure can lead to hunger and bankruptcy. Smallholders exist in all parts of the Pan Amazon, including within jurisdictions dominated by large landholders. As such, improving the sustainability of smallholders would yield multiple benefits, ranging from the stabilization of the regional climates to ameliorating the inequality that defines the rural economy.

The potential is greatest in Peru and Ecuador, where small farmers occupy more than ninety per cent of previously deforested landscapes. Most grow basic foodstuffs for household consumption and for sale to domestic consumers, as well as large number who cultivate coffee and cacao for international markets, including a substantial minority that receive a premium for adopting organic practices. Oil palm is expanding because it provides a steady stream of income on a monthly basis, while the concept of zero-deforestation palm oil is gaining currency within producer associations. Livestock operations are primitive, but producers are adept at adopting new technology, as evidenced by the ongoing expansion of aquaculture. Recruiting the small farmers of the Andean piedmont to pursue climate-friendly production has a good probability of success, because it aligns with their own experiences, traditions and aspirations.

Bolivia is similarly well-positioned to implement policies that benefit small family farms, which occupy ~35% of the agricultural landscapes created by deforestation. Like their peers in Peru and Ecuador, Bolivian smallholders are accomplished farmers engaged in commercial agriculture and open to innovation. Many have been enticed into the soy monoculture model, but they will respond to other options if they are economically competitive.

The situation is more complicated in Colombia, where rural peasants have been coopted by drug cartels, land grabbers and cattle ranchers. Most would welcome a less onerous livelihood, but that will require peace and the establishment of the rule of law.

It will be challenging to engage the smallholders of Brazil because their land has been captured by the Brazilian beef industry. These producers are more accurately described as small ranchers rather than small farmers. Their avocation for livestock also explains the relatively low proportion of secondary forest on their properties. Tropical farmers have forest fallows but ranchers just convert everything to pasture. They also tend to consume remnant forest over time. Municipalities dominated by small ranchers in Acre, Rondônia and Pará are all characterized by a superabundance of pastures and an almost total absence of other production systems.

Fortunately, there are exceptions that show a different pathway for smallholders in Brazil. Municipalities near urban areas are a major source of basic foodstuffs and tropical fruits. Region-wide, this production represents about eighty per cent of non-beef revenues, far greater than the value reported for cash crops that are grown in regions with specific programmes to support producers: coffee (Rondônia), cacao (along BR-230 in Pará), oil palm (northeast Pará) and black pepper (more widely in Pará). As in the Andean Amazon, aquaculture could revitalize the smallholder sector; however, it requires a significant capital investment and know-how that is different than traditional livestock systems. Small ranchers cannot shift to aquaculture without extension assistance and access to credit.

The potential to revitalize smallholder production could benefit from the expanding market for açaí, the most valuable food commodity in Amazonian Brazil (after soy and maize). Most of the current harvest originates from intensely managed natural populations located within communal territories. Global demand will soon outstrip the capacity of natural populations and, eventually their consumers will pressure for changes in supply chains currently reliant on child labor and the over-exploitation of natural populations. When this happens, the açaí industry will shift to cultivated plantations. Fortunately, EMBRAPA has developed a technological package for cultivating açaí on upland landscapes using irrigation technology, and middle-class farmers near Belem have been cultivating the palm for more than a decade. The transition to cultivation, which is inevitable, could revitalize smallholder landscapes across the Central Amazon. The production model could also be exported to the high rainfall areas in the Andean Amazon.

The success of açaí has highlighted the potential of other palm fruits with unique nutritional value or an innate capacity to produce large volumes of vegetable oil. Most have nascent markets based on the exploitation of natural populations but are also candidates for domestication and incorporation into agroforestry systems (see Chapter 8). In the western Amazon, this includes Oenocarpus bataua and Mauritia flexuosa, which, like açaí, are adapted to high rainfall areas and marsh habitats. In the Southern Amazon, Acrocomia aculeata, a savanna species adapted to upland soils could easily be integrated into beef production operations for large and small ranchers.

“A Perfect Storm in the Amazon” is a book by Timothy Killeen and contains the author’s viewpoints and analysis. The second edition was published by The White Horse in 2021, under the terms of a Creative Commons license (CC BY 4.0 license).

Read the other excerpted portions of chapter 4 here:

To read earlier chapters of the book, find Chapter One here, Chapter Two here, and Three is here.

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