1
OECD Workshop
on the
Evaluation of Agri-environmental Policies
20-22 June 2011
The Johann Heinrich von Thünen Institute,
Bundesallee 50, 38116 Braunschweig, Germany
Tuesday, 21 June
Session 5 : 11h00-13h00
Agri-environmental Policies in Brazil and Perspectives for Evaluation
Matheus A. Zanella1 and Lea V. Cardoso2
1. Humboldt-Universität, Germany 2. Socio-environmental Institute (ISA), Brasilia, Brazil
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Abstract
Brazilian policy-makers are not used to refer as agri-environmental policies to a number of different
policies marked by the interaction of agriculture and environment. We describe and classify eight Brazilian
policies that suit a practical definition of agri-environmental policies commonly used by OECD country
members. Four of these policies, selected due to their importance to agricultural and environmental
agendas, are described in details, emphasizing policy monitoring and evaluation mechanisms and
methodologies: i) the Low Carbon Agriculture Plan, ii) the Amazon Fund, iii) Payment for Environmental
Services projects, and iv) the Forestry Code. Given the relatively freshness of these policies, full and
comprehensive ex-post evaluations are exceptions, even though most of these consider monitoring
mechanism and ex-ante evaluations in their intervention plans. Besides, relatively low concern is given to
apply methodologies that could disentangle the impact of policy measures from external effects. We
conclude that these policy innovations represent a turning point into more use of economic instruments in
Brazilian agri-environmental policy-making and that, albeit with important exceptions, better inter-
agency coordination is required to design more efficient policies.
Introduction
The purpose of this paper is to briefly describe some important agricultural and environmental
policies in Brazil using current OECD definition and classification of agri-environmental policies. Focus is
given to the newest policy evolvements, which include recent Federal legislation discussions and
implementation of national programmes and initiatives aimed at reducing environmental impacts of
agriculture. Given the recentness of these policies – the majority is less than 5 years under force and some
are still at design stage – complete evaluations are still rare. Thus, the paper presents what the perspectives
are and which methodologies are intended to conduct future policy evaluations.
Section one introduces the term agri-environmental policies (AEPs) in the Brazilian context. It is
explained that this term does not find explicit correspondence in agricultural or environmental policy-
making debate, neither in Brazilian academic literature. Other terms or conceptualizations are usually
found to describe policies that interact both with agriculture and environment. Nevertheless, if we define
agri-environmental policies according to its current use by OECD country members, one could classify a
number of important agricultural and environmental policies as AEPs, both within national and sub-
national administrations; and this is one of the intentions of this article.
The most important Brazilian policies that would suit the definition of agri-environmental policies
are presented in section two. A preliminary and non-exhaustive list of these policies is provided and these
are classified using the categories of information instruments, economic instruments and regulations. These
policies are briefly described following similar categories existing in the matrix classification used by
OECD country members to construct their inventories of policy measures addressing environmental issues
in agriculture.
Four of these agri-environmental policies, selected due to their importance to agricultural and
environmental agendas, are explored in more details: a) the Low Carbon Agriculture Plan (Plano ABC), an
inter-agency plan constituted of climate change mitigation and adaptation policies, b) the Amazon Fund
(Fundo Amazônia), an initiative coordinated by the Brazilian Development Bank to support conservation
projects in the Amazon forest, c) Payment for Environmental Services projects, a series of decentralized
local and regional interventions which provide payments for farmers that support the provision of
environmental services, d) the Forestry Code (Código Florestal), the most important private land-use
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regulation and currently under intense discussions at the National Congress in order to reform current
legislation.
Section three continues to explore these four policies into details emphasising policy monitoring and
evaluation mechanisms and methodologies. Again, given the relatively freshness of these policies, full and
comprehensive evaluations are exception. Nevertheless, most of these consider monitoring mechanism and
ex-ante evaluations in their intervention plans. The situation with ex-post evaluations or impact evaluation
studies is still unclear for the majority of these policies. Further, relatively low concern is given to apply
methodologies that could disentangle the impact of policy measures from external effects.
Finally, the paper concludes re-affirming the challenges that arise during the design and
implementation of relatively new agri-environmental policies. With some exceptions, the inexistence of
coordination between environmental objectives and different government agencies poses an additional
problem of policy coherence that should be cautiously considered. The variety of plans, programmes,
actors and instruments are common characteristics of agri-environmental policies in many countries, and
Brazil is not an exception at this.
We argue that some of these policies do not follow a strategic framework of intervention or a
national strategy that coordinates different actions into unified objectives. There is a mix of policy
instruments and environmental targets, widespread throughout the Federal, State and local administrations,
but without significant linkages or coordinated plans that usually categorize national strategies of
government intervention. Some important exceptions must be stressed, for instance, a Federal programme
to reduce carbon emissions from the agricultural sector (Plano ABC), encompassed in the Climate Change
National Policy, which presents significant collaboration of different government agencies and civil society
representations.
1. Agri-environmental policies in the Brazilian context
At first sight, one might be surprised when conducting a bibliography review about agri-
environmental policies in Brazil. By looking at academic journals, policy reviews and even non formal
publications, such as policy-making presentations and working papers, hardly any reference can be found,
neither in Portuguese nor English. The few papers published use the concept agri-environmental policies in
different meanings than usually understood in current OECD literature (Vojtech, 2010). The term rather
proximate to agro-ecology and other alternative environmentally-friendly farming systems.
However, to simply conclude agri-environmental policies in Brazil being inexistent or unimportant
to agricultural and environmental agenda is misleading. Even though this concept does not find
correspondence in Brazilian context, other terms and conceptualizations are generally used to describe
policies that in other context would fall into agri-environmental policies categorization. Those can be
identified in several academic domains, from general agricultural economics, to environmental and
ecological economics, and literature is vast in policy analysis of these agriculture and environment
interactions.
This article does not intend to provide an explanation why we observe this difference in
terminology. Our intention is to apply a current practical definition of agri-environmental policies to a
number of policies that are usually categorized as of agricultural policy or environmental policy domains,
allowing us to explore some elements of these into details. We believe that this exercise would allow
fruitful comparisons with policies in OECD country members, especially in the evaluation domain.
Therefore, while referring to agri-environmental policies in the Brazilian context, similar to what
was proposed by Jones (2005), we indicate policies that: i) select farmers as important agents and targets of
intervention; and ii) address environmental objectives as primary objectives.
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From this practical definition, we eliminate some policies that could be considered agri-
environmental policies, but fail to comply with both elements of our definition. One examples of these
would be Ecological-Economic Zoning policies (Sombroek et al., 2000; Nogueira et al., 2008), since those
are land use policies aimed at ordering economic behaviour of a number of agents but not only and mostly
farmers. And another illustration would be biofuels policies, these latter eliminated due to the fact that we
consider that in these policies environmental objectives are most of times complementary to other rural and
economic development objectives.
Other examples that could not comply with the two main characteristics of the definition here
proposed are the Action Plan to Prevent and Control Deforestation in the Amazon (PPCDAM) and the
Action Plan to Prevent and Control Deforestation and Fires in Savannahs (PPCerrado) (Brasil, 2003, 2009,
2010a). Respectively launched in 2004 and 2010, these two policies have in their programme of actions
considerable interventions that are targeted to impact farmers towards environmental objectives, mostly by
using regulations, monitoring, and other command and control policy instruments to curb illegal
deforestation in these two regions. As with ecological-economic zoning policies, these two wide action
plants involve a number of other local agents besides farmers, resulting difficult to affirm that agriculture
concentrates mostly of the intended intervention. The main axes of these plans consist in the creation of
natural protected areas in endangered zones and more rigourous and control of land use regulations. To
achieve these objectives, considerable effort has been given to develop effective governance structures and
institutions, which are usually not the main objective of agri-environmental policies. Some actions could
indeed suit perfectly our definition – mainly those related to the “support of sustainable production
activities” – however, we consider that these specific actions are not at the core of PPCDAM and
PPCerrado, since they consist of implementing other already existing agri-environmental policies which
are described in this paper, such as the Forestry Code.
The last clarification of our agri-environmental policy definition is its indifference to the execution
or implementation agency, coordination ministry or political origin of the policy. As indicated in the
following section, agri-environmental policies in Brazil have heterogeneous governing bodies. At the
Federal level, some are more proximate to Ministry of Agriculture, some to the Ministry of Environment,
while others are completely decentralized or governed by financing agencies. This is similar to other
approaches to the categorization of agri-environmental policies found in international literature.
2. Main Agri-Environmental Policies
Although some policies were not selected in the previous section, some other important Brazilian
policies suit the definition of agri-environmental policies. These have various origins and are coordinated
by different agencies, but they rely mostly in one or two bodies of the Federal government level. The
majority of these have less than 5 years of implementation, some are still being developed and/or in
constant reform, even though other policies can have their origins tracked back decades ago.
One important feature of most of these policies is the usage of more than one policy instrument,
sometime combining both information instruments with regulations, or economic instruments with
information instruments. Another characteristic is either the identification of more than one environmental
target or even the non-identification of a singular explicit environmental objective, the later being
categorized as agri-environmental policies with general or broad spectrum.
Table 1 presents a preliminary and non-exhaustive list of these policies, classifying the policy
instruments and environmental objectives according to similar categories found in the matrix classification
used by OECD country member in their agri-environmental policy inventories. These policies are here
briefly described and special attention is given to the Low Carbon Agriculture Programme, the Amazon
Fund, Payments for Environmental Services projects and the Forestry Code.
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Micro watersheds programmes
Since 1980´s, Micro Watersheds (MW) Programmes have been carried on by some sub-national
governments from States from Southern and South-Eastern regions of Brazil, in many cases supported by
external financing from the World Bank and Inter-American Development Bank. The main goals of these
programmes consisted of broad objectives of agricultural productivity and farm income increase, and
improving rural population living conditions (Zafaroni, 1998). These programmes can be categorized as
agri-environmental policies because of their early innovative approaches of focusing in micro watersheds
as target areas and explicit concerns with sustainable natural resources use, water erosion control, land use
planning and general environmental conservation.
The MW-programmes have become largely dependent on participatory planning methodologies,
involving rural communities into policy design and execution. Thus, besides community-based measures,
other implemented policy instruments consists mostly of information instruments, such as technical
assistance, information dissemination and rural extension activities.
In the following decade, some contextual factors contributed to reinforce some objectives of MW-
projects. According to Navarro (2009) there are many emerging aspects within Brazilian rural development
context which contributed to the relevance of MW-projects.
Falling commodities prices, high levels of inflation, a context of increased indebtedness and other
economic disincentives in the early 90s forced many farmers into rural migration, and demonstrated the
need for new broad and integrated proposals of public intervention. Later, the understanding of “poverty”
as a public issue in mainstream debates, after the launching of UN-inspired indexes of social development,
influenced the social shape of MC-projects. Another fact was the institutionalization of the concept “family
farm”, not only as a new category to rural social group classification, but specially to implement targeted
policies for this type of farmers. Another relevant leverage for modelling new MW-projects resulted from
the consolidation of environmental legal concepts into legislation and a growing capacity of States to
enforce environmental regulations.
For the author, the convergence of all these factors forced MW-projects to change the initial
rationale from being merely a natural resources management perspective to incorporate a broader focus
capable of addressing these processes of social and economical change in course at that time, reinforcing
their participatory nature in design and implementation.
In some States, these programmes were successfully implemented and consecutively renovated for
another intervention period, while others were already on its third project cycle. Nevertheless, these
programmes remain concentrated in Southern and South-Easter States. The Federal government do have a
national Micro Watershed Programme, however these consists of local projects with low impact on
communities and few integration among the different projects. Main activities under national MW
programme consist of providing information about good agricultural practices for water and soil
conservation (Brasil, 2011a).
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Table 1. Main Agri-Environmental Policies in Brazil
Name Execution /
Implementation
Agency
Main Supportive
Bodies
Policy
Instruments1
Main
Environmental
Objectives2
First Year of
Implementation
Micro Watersheds programmes SEAs3 Extension Agen. 11, 12, 13 1, 2, 3 1980/90’s
Payments for Environmental Services projects Decentralized ANA 2, 3, 4, 12, 13 2, 5, 9 2000’s
Organics MAPA MDA 7, 11, 12, 13 2, 7, 11 2003
Environmental cross compliance BC MF, MAPA 8, 9, 10 1 2008
Amazon Fund BNDES COFA4 11, 12, 13 1, 5, 9 2009
Minimum prices for socio-biodiversity products CONAB MDA, MMA 3, 13 1, 12 2010
Low Carbon Agriculture Plan MAPA, MDA Several5 1, 4, 11, 12 3, 6, 9, 12 2010
Forestry Code IBAMA MMA 7, 11, 12, 13 2, 7, 11 1965/2011
Notes: 1 Policy Instruments: 2
Environmental Objectives
Economic Instruments Regulations (1) Generic / broad spectrum (7) Organic
(1) Payments based on fixed farm assets (8) Regulatory measures (2) Water resources / pollution (8) Reducing air pollution
(2) Payments based on land retirement (9) Cross-compliance (3) Soil quality / protection (9) Reduce carbon emissions
(3) Payments based on farming practices (10) Land-use regulations (4) Landscape (10) Renewable Energy
(4) Payments based on investments (5) Biodiversity (11) Risks to health
(5) Environmental taxes /charges Information Instruments (6) Addressing adverse events (12) Other sustainable resources
(6) Tradable rights / quotas (11) Research / education
(7) Labelling standards / certification (12) Technical assistance / extension
(13) Community based measures
3 Sub-national Environmental Agencies.
4 Amazon Fund Guidance Committee (COFA), responsible for setting guidelines and monitor fund results, is composed of 7 Federal agencies, the 9 State
administrations of the Amazon region and 6 civil society representations. 5 14 Government agencies and 18 civil society representations (farmers’ and workers’ unions, environmental NGOs, research institutes, etc) participated
during the elaboration of the plan.
Sources: National Water Agency (ANA), Central Bank (BC), Brazilian Development Bank (BNDES), National Food Supply Company (CONAB),
Brazilian Agricultural Research Company (EMBRAPA), Brazilian Institute of Environment (IBAMA), Ministry of Agriculture (MAPA), Ministry of
Agrarian Development (MDA), Ministry of Economy (MF), Ministry of Environment (MMA), Navarro (2009), Zanella (2011).
Elaborated by authors.
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Organics
Brazilian policy for organic agriculture was initially implemented in 2003, when the first national
legislation was approved (Law 10.831/2003), defining concepts related to the production and
commercialization of organics. However, it was only in 2007, with the publication of an Executive Decree
that the processes of certification, accreditation and other procedures necessary for the commercialization
of organics were established. Nevertheless, the organic market evolved in despite of insufficient
legislation, due to producers’ association efforts and driven by consumer demand.
The Ministry of Agriculture is responsible for coordinating this policy in cooperation with the
Ministry of Agrarian Development. The policy consists of defining labelling standards and certification
procedures, activities of research and education – such as publications, training materials, consumer
campaigns – and technical assistance and extension (Brasil, 2011b).
Given the well known complexity of certification and accreditation processes, recently some policy
innovations directed to collective certification and other mechanism have been developed. These
community based measures are called Participatory Mechanism of Guarantee (Sistemas Participativos de
Garantia), in which credibility of certification is built not upon rigid controlled processes from a third part
certifier, but on collective responsibility of theirs members, allowing some accreditation flexibility
according to different social, cultural, territorial, and institutional contexts (Brasil, 2011b). Associations or
cooperatives that are able to demonstrate to a conformity body attached to the Ministry of Agriculture that
their processes follow organic agriculture rules, might also use the term organic in their commercialization
strategies.
As a result, with the exception of standards definition, Brazilian organic policy does not employ
economic instruments, such as premiums or payments based on organic farming practices. One can
conclude that the incentives farmers have to switch to organic agriculture is purely defined by market
forces, farmers own personal values and technical, information and knowledge restrictions.
Environmental cross compliance
Environmental cross compliance policies have been inaugurated in 2008, due to the ongoing effort
to refrain Amazon deforestation. The most notorious measure relates to the access of subsidized credit to
agriculture production in Amazon biome. In order to access this preferential credit line, agricultural
producers and ranchers are requested to apply for a georreferenced database and provide information about
environmental law compliance, particularly regarding the Forestry Code (Brasil, 2008a). Also, the pressure
for implementing environmental cross compliance within the government-based rural credit system for
other biomes such as Cerrado and Mata Atlântica is rising.
The Ministry of Environment has recently launched a reference term to evaluate the efficiency of
such measure for Amazon biome (Brasil, 2011c). Early analysis suggests strong evidence of leakages.
Credit disbursement in that region shows that the total amount is increasing while the number of contracts
is declining. It might be true that the mechanism is leading to more concentration on public credit, since
the cost of compliance for some farmers is higher than the subsidy offered, make the incentive itself
incapable to change practices or to help environmental regulation enforcement (ISA, 2011). Besides, credit
from the government-based credit system is estimated to fulfil around one quarter of all annual financial
needs required by the agricultural sector (OECD, 2005; Kumar, 2004). The other three quarters have
different sources, from own private capital to direct financing from trading companies and other origins,
and these are not subject to referred environmental cross compliance regulation.
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Minimum guaranteed prices for socio-biodiversity products (PGPM-Bio)
Under its traditional agricultural policy, the National Company of Food Supply (CONAB) operates a
minimum-price policy for most of agricultural commodities. Being the core of its agricultural policy during
the 70s and 80s, these policies were substantially reformed during the 90s towards more market-friendly
interventions, reducing its operational coverage to manage crisis situations, even though it is still an
important pillar of Brazilian agricultural policy (OECD, 2005).
In 2008, a number of “socio-biodiversity products” were included in the list of products eligible for
minimum guaranteed prices, however limiting the maximum amount of payments per person to values
between US$ 200 and US$ 950 per product/year (Brazil, 2008b). This limitation was necessary to target
the policy towards rural populations and cooperatives that sustainably extract forestry resources, such as
Brazilian-nuts, rubber, and other 9 typical natural products that have their image associated with Brazilian
socio-biodiversity.
Whether to consider this minimum-price policy as an agri-environmental policy could depend on the
definition of farmer, its budget allocation and coordinating agency are the same responsible for operating
the traditional agricultural price-policy, demonstrating the PGPM-Bio represents an extension of this
policy to different targets. Hence, policy instruments consists of premium prices based on farming
practices and community-based measures, such as support to the establishment of rural cooperatives and
associations. So far, no impact evaluation study has been conducted for these measures. The monitoring
system relies on number of beneficiaries, value and quantity of products supported by the policy.
Low Carbon Agriculture Plan (Plano ABC)
The Low Carbon Agriculture Plan is an inter-agency plan constituted of climate change mitigation
and adaptation policies. The plan is one of the twelve sector plans due to the National Climate Change
Policy (Law 12.187/2009) launched after the UN Climate Change Conference COP-15, held during late
2009 in Copenhagen. Brazil has voluntarily agreed to reduce greenhouse gases emissions (GEE) from a
36.1 to 38.9 percent by 2020 compared with business as usual scenario considering 2005 level (Brasil,
2011d).
The ABC Plan is coordinated by the Ministries of Agriculture, Agrarian Development and Casa
Civil and it is to be implemented by an Executive Group responsible for implementing Climate Change
National Policy.
Besides the explicit environmental objective to reduce carbon emissions by 133 to 166 million ton,
other secondary environmental objectives such as soil quality and protection, addressing adverse events
(climate change adaptation) and other sustainable resources practices are involved. The objectives are
stated as follow:
(a) To contribute to the achievement of GEE reduction as internationally compromised;
(b) To guarantee the continuous and steady improvement of good agricultural practices that
reduce GEE emissions and additionally increase carbon storage in vegetation and soil;
(c) To incentivize the adoption of Sustainable Production Systems that reduce GEE emissions
while improving revenue, principally with: (i) degraded pasture renovation; (ii) Integrated
crop-livestock-forestry systems (ILPF) and Agroforestry systems (SAFs); (iii) No-tillage
system (SPD); (iv) Biological nitrogen fixation (FBN); (v) Planted forests; and (vi) Animal
waste treatment;
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(d) To incentivize adaptation strategies for plants, productive systems and rural communities, in
particularly vulnerable ones, to global warming scenarios;
(e) To engage efforts to reduce deforestation led by livestock and agricultural production in
Amazon and Cerrado biomes (Brasil, 2011d)
The delivery mechanism detailed on an operational plan relies on information and economic
instruments. Payments based on fixed farm assets and on investments are to be made through subsidized
credit. However, there is a general understanding that credit itself does not represent a sufficient incentive
for the landowners to adopt good practices that reduce carbon emissions. Government organisations has
planned a number of actions related to research, education and technical assistance and extension to
promote these innovations on agricultural fields and rural areas. ABC Plan environmental targets are set to
two intervention periods, 2011 to 2015 and 2016 to 2020. These targets refer to the area under
implementation, with the exception of the sub-programmes of animal waste treatment which refers to
volume treated, and these are illustrated on the table below:
Table 2. ABC Plan Targets
(area in million hectares, volume in million m3, GEE reduction in million ton CO2 eq.)
Sub-programmes Targets
2011/2015
Targets
2016/2020
Estimated GEE
reduction (by 2020)
Degraded pastures renovation (area) 6.0 9.0 83-104
Integrated crop-livestock-forestry systems (area) 1.5 2.5 18-22
No-tillage systems (area) 2.8 5.2 16-20
Biological nitrogen fixation (area) 1.0 4.5 10
Planted forests (area) 1.0 2.0 8-10
Animal waste treatment (volume) 4.4 6.9
Source: Brasil, 2011d.
Even though ABC Plan explicit enumerates a number of environmental objectives and set targets for
achievement, farmer eligibility criteria are still unclear. The Plan has the intention to be applied nation-
wide, but it states a priority for those areas where investments are most needed, demonstrating a concern
with economic efficiency that so far has yet to be better defined. Till this date, farmer selection has been
defined by financial agents who operate the subsidized credit programs without additional guidelines
related to prioritization.
Further, some activities related to technical and extension assistance are to be integrated within sub-
national governments. This division of implementation and responsibilities has been charactering the Plan
since its first ideas. The ABC has been discussed in a multi-stakeholder group, involving substantial
collaborations between public, private and third sectors organisations.
The government expects that an amount of BRL 197 billion (approximately USD 130 billion) will
be applied by the ABC Plan until 2020, in which BRL 35 billion should be provided by Federal
government itself. This numbers places this Plan on the top expenditures list of Brazilian agricultural and
environmental policies. There are huge challenges to the ABC Plan success but it is undoubtedly the most
ambitious initiative related to agri-environmental policy held by Brazilian government so far.
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Amazon Fund (Fundo Amazônia)
Inspired by the climate change international negotiations leading to the establishment of sustainable
financing mechanism anchored in avoided deforestation, in 2008 the Brazilian Development Bank
(BNDES), in cooperation with the Ministry of Environment, launched an initiative to support and finance
conservation projects in the Amazon forest.
It consists of a fund hold by the BNDES responsible for receiving national and foreign development
cooperation donations and coordinate project financing under certain pre-requisites. The Amazon Fund is
strongly influenced by the Reducing Emissions and Forest Degradation mechanism, more knows for its
acronym REDD+, even though primary it does not pursue to become a financing mechanism attached to
the climate change negotiations, neither to generate carbon credits or other forms of compensation rights
for its donors. So far, both the Governments of Norway and Germany have (Brasil, 2010b) compromised
resources to the Amazon Fund, even though the majority of resources come directly from BNDES budget.
The Fund can be categorized as a policy, rather than just as a development fund, because it is
connected to the National Policy for Climate Change and it counts with significant interactions with other
Federal agencies and States representations, and civil society organisations. The Amazon Fund Guidance
Committee (COFA), constituted of these representatives from these bodies, is the forum for guideline
settings and project approval, being also the forum for discussions of promotion strategies and project
orientation.
The environmental objectives targeted by this fund are of generic and broad nature. The legislation
that inaugurates this initiative (Brasil, 2008c) states “prevention, monitoring and reduction of deforestation
and the promotion of conservation and sustainable use of Amazon biome”, even though by analysing the
project profiles, it is possible to notice a concentration into biodiversity protection and carbon emissions
reduction.
Since the Fund operates by financing and supporting a number of projects into different areas, to
define which policy instruments are in use is more complex compared the other agri-environmental
policies. As of July 2011, nine projects were already approved and are in execution (Brasil, 2010b). In
those that have farmers are important targets of interventions, the three categories of information
instruments dominates, the majority being applied to support farmers to comply with land use and other
regulations. A common action is the development of georeferenced farms database with environmental
information, allowing for more efficient land use monitoring. It is still possible to identify some economic
instruments in those projects, such as payments based on farming practices, but these are clearly
exceptions.
Several organisations can apply to receive funding from this mechanism, both from public, private
and third sectors. The Fund is open to Federal, State-level and local public agencies, research institutes,
non-governmental organisations, private companies, cooperatives, research and technological centres,
environmental associations, among others. So far, the profile of project final beneficiaries is vast, even
though farmers are important actors in most of already approved plans, which allows the classification of
the Amazon Fund as an agri-environmental policy.
Payments for Environmental Services projects
A series of decentralized and independent local projects that remunerate farmers for land retirement
and for performing certain environmentally-friendly agricultural practices that secure or support the
provision of environmental services are categorized as Payment for Environmental Services projects. Some
of projects that are related to water services are stimulated and technically supported by the national policy
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Water Producers, coordinated by the National Water Agency (ANA). But the influence of this policy is
rather complementary, since design, management and financing are either local or regionally financed.
The first experiences with PES schemes in Brazil dates from early 2000s, firstly targeting
environmental services related to carbon mitigation and later to water secure and provision. These two
main environmental objectives still dominates the majority of PES projects in the country, even though
some projects related to biodiversity conservation can be identified, while others focus more in supporting
fragile rural populations and promoting rural development. It is extremely challenging to categorize PES
projects in Brazil, given it wide heterogeneity, diversity of environmental and social objectives,
governance structures and financing sources.
May (2011) identified 15 carbon-related PES project already implemented in the Atlantic Forest
region, and another 15 which are in design and development stages. Also considering only the Atlantic
Forest region, Gavaldão and Veiga (2011) identified 8 PES-water projects already in implementation and
20 in design and development stages. And Seehusen et al. (2011) identified 2 PES-biodiversity projects
implemented and 3 being designed in the mentioned region. Besides, two States, Espírito Santo and
Amazonas, have already implemented State-level PES programmes and policies (Pagiola 2011), while
others – São Paulo, Minas Gerais and Paraná – are designing their schemes (Zanella 2011). Given the
booming of these projects during the last few years, it is possible to affirm that PES has become a trendy
policy instrument among Brazilian environmental managers.
Once more, a complete assessment of policy instruments used in these initiatives would have to be
conducted on project-by-project basis, but what really differentiate PES projects from other agri-
environmental projects is the usage of economic instruments as a conceptual pillar in their intervention
strategy. Therefore, the PES focus relies on payments based on fixed farm assets, land retirement and
farming practices. The vast majority also conduct considerable amount of technical assistance and
extension activities, given its local profile and the common assumption that farmers’ behaviour are result
of not only economic incentives. Other PES projects also complement their intervention with community-
based measures, such support to associations. Some of these policies are directed to support and assist
farmers to comply with other agri-environmental regulations, such as the Forestry Code, even though PES-
projects usually do not aim to establish new regulations per se (Pagiola, 2011, Zanella 2011).
Forestry Code (Código Florestal)
The Brazilian Forestry Code is a half-century nation-wide legislation that, among other things,
introduced land-use restrictions on private farms. It is considered as the most important land-use
regulation, given its national applicability and the definition of limits to private property rights by
considering forest and other forms of vegetation as public interests goods. It is also one of the most
controversial environmental legislation. Decades of low or inexistent enforcement did not inhibit the
agricultural frontier to expand into environmentally sensible areas defined by the Code, while other
agricultural activities were already being conducted in areas that the Code considered should be restored
and preserved. This chronic problem of enforcement is back again in the agricultural and environmental
agendas, given wide and heat discussion within the National Congress to reform substantial parts of the
legislation.
The Code currently in force refers to the Law 4.771, from 1965. Its origins can be tracked to an
Executive Decree from 1934, though, demonstrating an early concern with forest protection within private
properties. The Law 4.771 was significantly changed through a series of Laws, Executive Decrees and
emends during the 80s, 90, and early 2000’s, resulting in a complex set of legislation pieces negotiated by
political parties in different historical contexts.
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Two main land use restrictions compose the core of the Forestry Code, although many others can be
considered of importance depending on local characteristics. These two are the Permanent Protection
Areas and the Legal Reserve.
Permanente Protection Areas (APPs) are defined as margins of rivers, lakes and other water bodies,
ranging from 30m to 500m on each side as protected area, depending on the length of the water body, and
50m of protected area around water springs. Top of hills and mountains, areas higher than 1.800m of
altitude, areas with inclination higher than 45°, dunes, mangroves and cliffs are also considered APPs and
therefore must be protected. According to the law, the natural vegetation of these areas should be
safeguarded, resulting that these protection areas cannot be used for farming, grazing or any other
agricultural activity, in order to “ preserve water resources, landscape, geological stability, biodiversity,
gene flow of fauna and flora, soil protection and to assure the well-being of human populations” (Brasil,
1965).
Legal Reserve (RL) is defined as a share of rural private properties, additional to those defined as
APPs, necessary to “the sustainable use of natural resources, conservation and rehabilitation of ecological
processes, biodiversity conservation and shelter for native flora and fauna” (Brasil, 1965). This share varies
from 20% of the farm in South, central and north-eastern Brazil, to 80% in forest areas of the Amazon
region. Farmers are still required to provide public agents maps of the location of APPs and RL areas
within their rural properties and to register these at official register offices.
Even though environmentally progressive in its conceptions, enforcement of the Forestry Code has
consistently failed. There are no official figures of legislation compliance, but event government officials
assume that full compliance is rare (IPEA, 2011). While environmental groups reaffirm the importance of
the Forestry Code and state that successive administrations had not invested sufficiently in monitoring and
controlling legislation compliance (SOS Florestas, 2011), farmer groups advocate that legislation is too
restrictive, far from real and practical application and too generalist, resulting economic unviable for many
farm to operate full legislation requirements (ICONE, 2011). However, they seem to have a consensus on
the necessity to develop more supportive information and economic policies necessary to assist farmers to
adapt their agricultural practices and land uses to legislation restrictions.
Recently, controversies about the Forestry Code reached top of agricultural and environmental
agendas, leading the National Congress to discuss a wide and substantial legislation reform. The Deputy
Chamber has approved a Law Proposal (Brasil, 2011e) that revokes all previous relevant decrees and
emends into a new Law, reforming several requirements, especially those related to land use restrictions.
Farmer groups dominated negotiations and are generally more satisfied with preliminary reform results,
while environmental groups were claiming that undergoing negotiations represent a retrocession of the
legislation (CNA, 2011; WWF, 2011). By early June, this proposed legislation was being discussed in the
Senate, but expectations are high that the new Law could be approved and entry into force still in 2011.
3. Perspectives for Evaluation
Recently, the relationship between agriculture and environment is on the top of the Brazilian
political agenda, as demonstrated by the introduction of important new agri-environmental policies in the
last few years. From the eight agri-environmental policies described, at least four of them have less than
five years of implementation, while other were already into force, but gathered new momentum with
current agriculture and environmental discussions. This timing context poses additional challenges on
designing and implementing environmental effective and economic efficient agri-environmental policies.
The following four boxes describe how the four previously described policies – Low Carbon Agriculture
Plan, Amazon Fund, PES projects and Forestry Code – are planning to monitor and evaluate their effects
and costs.
13
From analysing their intended monitoring plans and impact methodologies, it is possible to drawn
some common conclusions. Firstly, full comprehensive impact evaluations – which would consider a
complete set of criteria such as environmental efficacy, economic efficiency, equity and distributional
impacts, political relevance, and analyse policy effects within time – were yet not conducted, neither is
clear if there is willingness to conduct these analysis in the future. Since most of these are still in design
and early implementation phases, concern is concentrated in implementation monitoring and policy
analysis or ex-ante evaluations, and, except in some cases, there is no explicit mention to the intention of
conducting ex-post evaluations after some periods of policy implementation.
Secondly, scenarios and baselines adopted in those policies usually refer to “no policy situation” or
“no intervention”, indicating that it is not prevented that impact assessments would consider methodologies
that disentangle the impact of policy measures from external effects. With the exception of some PES
projects – notably the State-level PES programme in design by São Paulo in cooperation with the World
Bank – the reference concerning the use of counter factual analysis is rare. We believe that there are higher
chances that these policy evaluations will be conducted independently by academia or other external
analysts, rather than by programme managers or other personal in charge of policy implementation.
Box 1. Monitoring and Evaluating – Low Carbon Agriculture Plan
As of June 2011, the whole system of monitoring implementation of the ABC Plan was still under
development. Great concern is given to the use of internationally recognized and approved methodologies
of carbon mitigation accounting in the context of climate change international negotiations. Policy effects
of ABC Plan in mitigating carbon emissions will be considered in the National Inventory of Emissions,
nation-wide reports which are submitted every four years to the UNFCCC. Each one of the seven main
components of the ABC programme have result indicators, usually area under implementation, which
later are converted in total carbon emissions mitigated according to the international recognized
methodologies.
These analysis and reports will be concentrated in two “Virtual Laboratories”, research networks
designed to coordinate the scientific effort and report official carbon accounting created by the ABC Plan
and attached to the Brazilian Agricultural Research Company (Embrapa).
Baseline emissions refer to the year 2005, the year of reference of the latest National Inventory of
Carbon Emissions, and the comparative scenario is “no policy situation”. This choice reflects Brazilian
strategy in international negotiations to propose that emerging countries should assume only voluntary
compromises of carbon emission reduction referring to a normal tendency line, instead of liquid
reductions compared to a given year.
_______________________________________________________________________________________
Source: Brasil (2011d).
Box 2. Monitoring and Evaluating – Amazon Fund
The most important instrument for monitoring the different projects financed by the Amazon
Fund is an Intervention Logic matrix approved in 2010 that guide impact evaluation on both project and
programme-levels. It was the result of a joint development of the main implementation agency, the
Brazilian Development Bank (BNDES), in cooperation with the Norwegian Technical Cooperation
Agency (NORAD), German Technical Cooperation Agency (GTZ), Brazilian Ministry of Environment
(MMA) and Brazilian Statistical Office (IBGE).
The Intervention Logic matrix is a common instrument used by many development cooperation
agencies that establishes common methodologies to be applied by all projects in their impact evaluation
assessments and connects different project goals into coordinated objectives. It considers four different
levels of monitoring, from a macro and strategic perspective to micro project-level perspective. Concern is
14
given to identify and monitor valid indicators under a single analytical framework.
At the micro project-level, it is relatively simple to disentangle direct policy effects from
externally-driven effects, since the majority of indicators refers to number of projects conducted or
number of beneficiaries touched by the policy. However, as usual with Intervention Logic matrices, at
macro and strategic level this relationship is not explicit and no further methodologies are indicated.
Thus, the focus still relies on the progress of implementation and soft effects evaluation, even
though ex-post (2 years after first activity) impact evaluations are also requested for each one of the
projects financed by the Amazon Fund. Nevertheless, under the current version of the Intervention Logic
matrix, few details are given about methodologies to be applied in these ex-post impact assessments.
_______________________________________________________________________________________
Source: Brasil (2010b).
Box 3. Monitoring and Evaluating – Payments for Environmental Services
Given the decentralized characteristic of PES-policy in Brazil, no single framework unites the
different environmental and social objectives of these projects and evaluation methodologies depend on
each case. A wide range of methods have been proposed by project managers to conduct these analyses in
their specific context: stylised environmental impact models, georeferenced environmental models, etc.
Within the heterogeneity of PES-projects, it is possible to identify projects that have already
accumulated some period of intervention and knowledge about its impacts, while others are still not able
to identify impact indicators, relying only on monitoring the progress of project implementation. In fact,
this is a core question to the future development of PES initiatives, since the whole conceptualization and
argument behind the selection of these economic instruments is that payments are more economic
efficient to deliver or secure environmental services than other policy instruments. Whether this
assumption hold true for Brazilian PES projects is still an open question.
Furthermore, only a few of PES-projects are dealing with the analytical problem of disentangle
direct and external effects. One worth to mention is a State-level project currently at final design stage
conducted by the State of São Paulo, Projeto Mina D’Água, in which there is an explicit interest of
conducting ex-post impact evaluation in cooperation with the World Bank that uses control groups on its
study-design. For this analysis, baseline data is being collected from municipalities that will participate
and will not participate in the pilot-projects.
Recently, project managers that are working with PES-projects have been declaring a high interest
in establishing common methodologies or monitoring protocols to evaluate both PES environmental and
socio-economic impacts. This jointly developed initiative would not only allow more efficient comparison
between the different PES-projects impacts as it would also assist the expansion and replication of PES
initiatives in other areas of the country.
_______________________________________________________________________________________
Source: Pagiola (2011) and Zanella (2011).
Box 4. Monitoring and Evaluating – Forestry Code
As already indicated on its description, during the last few decades the Forestry Code has faced
significant problems with enforcement, which lately have generated a heated debate about which direction
should the legislation be reformed. Both the current law that is in force and the proposed law that is in
discussion within the National Congress define roles and responsibilities to different public agencies in
monitoring and controlling regulation compliance. However, given this instable political environment
regarding this policy, performance depends largely on institutional capacity of these controlling
organisations at their local level and the different social, ecological and economic context in which
farmers are inserted.
15
Some sub-national governments have started to place some effort in increasing regulation
enforcement. Besides the PPCDAM and PPCerrado coordinated at national level, States such as Mato
Grosso have also complementary state-level plans to curb deforestation and environmental impacts that
relies mostly in supporting Forestry Code compliance. These programmes employ satellite monitoring
combined with local interventions and georefferenced farm databanks, and some efforts of evaluating
these actions are being taken by independent groups, such as environmental NGOs. Methodologies vary
considerably, however more focus is given to environmental effectiveness of Forestry Code regulation,
than economic efficient of making it operational.
_______________________________________________________________________________________
Source: Brazil (1965, 2011) and ICV (2011).
4. Conclusions
Brazil experience a dynamic moment in its policy-making debate about instruments to deal with
socio and ecological interactions between agriculture and environment. New policies, programmes,
projects and actions have been adding even more challenging demands to policy-makers when it comes to
decide on the complex array of policy options available in agri-environmental topics. More analysis is
certainly required, and there is a greater necessity of cooperating with other countries that have
accumulated experience with the use of agri-environmental policies, especially those that contain economic
instruments. We acknowledge two main conclusions from our succinct analysis of the eight major agri-
environmental policies identified in this paper. The first one relates to the use of economic instruments and
the other to the problem of policy incoherence.
Economic instruments in agri-environmental policies
In Brazil, the experiences with economic instruments are even younger than other agri-
environmental policies. Traditionally, the main strategy of environmental policy-makers has been the
usage of regulations, mainly land-use policies, such as the Forestry Code and zoning policies. In many
cases, these are also supported or complemented by information instruments, designed to assist farmers in
complying with land-use rules.
A turning-point in this tendency can be recognized in late 2000’s, as suggested by the design of
PES projects, the PGPM-Bio and the ABC Plan. These three policies consider economic instruments as the
core of their intervention strategies and this certainly represents an innovation in Brazilian agri-
environmental policy-making.
Yet, the usage of economic instruments is still concentrated on payments, rather than other market-
based instruments, such as environmental taxes, tradable rights or quotas. A sufficient explanation of this
phenomenon would require further and more complete analysis, but it well noticed that Brazilian policy, in
general, has few or any accumulated experience with the introduction of environmental taxes and tradable
rights in other sectors of the economy. This helps to understand why discussions to introduce
environmental taxes or tradable rights in agriculture are far from reaching mainstream agricultural and
environmental agendas.
A great opportunity to the development of tradable rights market of forest land is being considered
within the debate about the Forestry Code reform. It is well recognized that full enforcement of the
Forestry Code would require that an important number of farmers would have to reforestate or retire
16
proportions of their farms to comply with the Legal Reserve requirement. An option that has been
considered is to flexibilize the rules that allow farmers to acquire external forested areas from farmers that
have bigger conservation areas than required by law. This is already possible under the current Forestry
Code, but there are some important limitations to this practice that so far inhibited the development of a
dynamic market for this particular land use right. The main challenge to the establishment of this Legal
Reserve quotas market relate to the operationalisation of this scheme on a large scale that is coherent with
the environmental objectives of the law.
Strategic coordination and policy coherence
In the eight agri-environmental policies described in this paper, at least nine different national-level
organisations were identified as having direct coordinating roles. Besides those, a series of other sub-
national agencies also coordinate or execute part of the programmes, and most of these policies have
significant participation from non-governmental bodies, both from the private and third sectors. Certainly,
there are positives outcomes due to the plurality of bodies that are involved in agri-environmental policies
in Brazil, but these certainly require the presence of cooperation strategies and great coordination efforts
that poses additional challenges in policy making.
Some of the identified agri-environmental policies do not follow a strategic framework or a national
strategy that coordinates these different actions into similar objectives. In this sense, even though coherent
with their own actions and programmes or even delivering results, these policies are isolated from other
government strategies and might suffer from problems of lack of political support and policy incoherence,
contradicting with other government policies from other domains.
One example of this situation are conflicts generated by the government economic strategy of
promoting beef exports by providing financing from the Brazilian Development Bank to investments in
slaughterhouses and beef operations in the Amazon region. Brazilian Federal accountability office
(Tribunal de Contas da União – TCU) found that these investment policies were in clear contradiction with
environmental regulations, namely the Forestry Code and the Plan of Amazon Deforestation Control, PPC-
DAM (TCU, 2010). This example illustrates how policy incoherence not only generate environmental
inefficacy, but can be a potential source for economic inefficiencies, since some of financing offered
through this investment policy had later to be declined.
This is certainly not the case for all agri-environmental policies. The Low Carbon Agriculture Plan
is an integral part of the Climate Change National Policy, elaborated specifically as a response from the
agricultural sector to the effort of mitigation and adaptation embedded in international climate change
negotiations. Since its conception, the ABC Plan counted with substantial coordination from different
public agencies, civil society organisations and private sector representatives. Furthermore, the cooperation
between research and policy-making is one of the highlights of this plan, given the support of the Brazilian
Agricultural Research Company in offering its expertise in agricultural technologies for carbon mitigation
and climate change climate adaptation and the willingness of other actors to cooperate on its design.
Uncertainties related to environmental achievements and high administrative and transactions costs
are usually associated with implementation of agri-environmental policies, and further analysis on this
issue is certainly required. OECD has built reputation on coordinating regional and international
comparison, policy evaluations, development of monitoring protocols and diffusion of best practices in
policy design and implementation. Further cooperation with Brazil on these topics would surely be fruitful
for both sides.
17
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