Documents.worldbank.org
Poison Dart Frog Ranching
to Protect Rainforest and Alleviate Poverty
[pic]
A Medium Sized Project (MSP)Application
from the International Finance Corporation (IFC)
to the Global Environment Facility(GEF)
March 2003
TABLE OF CONTENTS
Section Page No.
Project Summary 1
Project Description 5
Project Rationale & Objectives 5
Sustainable Frog Production Methods 6
International Market for Poison Dart Frogs 7
Frogs’ Welfare During Shipping and in Captivity 8
Globally-Significant Biodiversity Conservation 9
Highly Diverse Frog Habitat 9
Conservation Value of Project Sites 9
Ecological Significance of Poison Dart Frogs 11
Land Ownership Status 12
Baseline Situation 12
Continued Deforestation 12
Continued use of destructive agricultural practices. 12
No Ecological Education. 13
Limited Opportunities for Local Income Generation 13
No Frog Business. 13
No Frog-Related Ecotourism. 14
No Commercialization of other NTFPs. 14
Decline in Frog Population 14
Continued Frog Smuggling. 14
Persistent Barriers to Legal Exportation of Sustainably-Produced Frogs. 14
Frogs Threatened by Increased Climate Variability. 15
Missed Opportunities for Replication 15
Expected Project Outcomes 15
Forest Preservation 15
Poverty Alleviation 16
Conservation of Poison Dart Frogs 16
Related Outcomes 16
Project Activities 18
Business Support 18
Start-Up Advice and Ongoing Business Incubation 18
Frog Breeding Equipment and Operation 19
Collection Centers’ Equipment And Operation 20
Market Development 20
Education and Training 20
Local: Training for Frog Producers 20
Local: Educational Outreach in Peru 21
National: Training for INRENA and Customs Officials 21
Complementary Strategies for Forest Preservation 21
Conservation Specialists 21
Ecotourism 22
Sustainable Farming 23
Replication 23
Replication With Other Frog Species 23
Replication With Other NTFPs 23
Replication in Other Countries for Commercial or Conservation Purposes 24
Monitoring and Evaluation 24
Project Management 24
Implementation Plan 25
Implementation Schedule 26
Business Support 26
Education and outreach 26
Project Management and Administration 27
Sustainability Analysis 27
Environmental Sustainability: 27
Social Sustainability: 27
Financial Sustainability: 27
Risk Assessment 28
Stakeholder Identification 29
Community Participation 30
Incremental Cost Assessment 31
Budget 33
Monitoring and Evaluation Plan 34
Monitoring: 34
Evaluation: 34
Annex 1: Globally-Significant Conservation Benefits 35
Annex 2: Summary of Business Plan for Frog Export Venture 36
Annex 3: Market Study 37
Customer Profile 37
The General Public 37
Institutions 37
Pet Store Chains 37
Current United States Market 38
Current Prices 38
Current Competition and Market Leaders 39
Peruvian Poison Dart Frogs Market Advantages 39
Market Demand 39
Marketing and Selling Strategy 40
Annex 4: Focal Point Endorsement 41
Annex 5: Summary of Monitoring & Evaluation Plan 42
list of tables
Table 1: Priority 1 Conservation Zones linked to Frog Production Areas 10
Table 2: Summary of Project Outcomes and Indicators. 17
Table 3: Initial Capitalization and Ownership of Frog Export Venture 25
Table 4: Implementation Schedule 26
Table 5: Project Risks and Corresponding Mitigation Strategies. 28
Table 6: Current Market Price Survey Data** 38
Table 7: Major U.S. Poison Dart Frog Breeders 39
Table 8: Annual Viable Sales Figures 40
table of figures
Figure 1: Male frog with tadpoles………………………………………………………… .….6
Figure 2: Frog Breeding Vessel…………………………………………………………………6
Figure 3: Hobbyist with terrarium………………………………………………………… ….7
Figure 4: Geographic Scope of Frog Production Areas………………………………… . ….9
Figure 5: Recent Deforestation of Rare Frog Habitat………………………………………..11
Figure 6: Deforestation in Alto Cainarache Valley………………………………………….13
Figure 7: IFC & ASPRAVEP Meeting…………………………………………………….…..29
list of acronyms
ASPRAVEP Association of Producers of Poison Dart Frogs in Peru
CONAM Consejo Nacional del Ambiente
EBA Endemic Bird Areas
GEF Global Environment Facility
IFC International Finance Corporation
INRENA National Institute for Natural Resources
LCC Local Collection Center
M&E Monitoring and Evaluation
NGO Non Government Organization
NTFP Non-Timber Forest Product
RAP Rapid Assessment Process
INIBICO Institute for Research into the Biology of the Eastern Andes
ZIRA Intensive Zoocriadero with Artificial Ranching
Project Summary
|PROJECT IDENTIFIERS |
|1. Project name: Poison Dart Frog Ranching to Protect |2. GEF Implementing Agency: IFC (World Bank) |
|Rainforest and Alleviate Poverty | |
|3. Country or countries in which the project is being |4. Country eligibility: Peru ratified the Convention on |
|implemented: Peru |Biological Diversity on June 7, 1993 |
|5. GEF focal area(s): Biodiversity |6. Operational program/Short-term measure: OP No. 3: Forest |
| |Ecosystems |
|Project linkage to national priorities, action plans, and programs: |
|The project will help to achieve Peru's goals for biodiversity, which are articulated in the “Law on the Conservation and |
|Sustainable Use of Biodiversity.” Specifically, the project will help to achieve the objectives of Articles 3 and 5, which state |
|Peru’s desire to: (i) promote the economic development of Peru by encouraging greater involvement of the private sector in the |
|sustainable use of biodiversity; (ii) foster education, information exchange, scientific research, and the development of human |
|resources concerning biodiversity and the sustainable use of its components; and (iii) generate funding mechanisms in order to |
|adequately manage biodiversity. The project is consistent with Peru’s National Strategy for Biological Diversity, which specifies |
|the development of sustainable uses of biodiversity and scientific research as national priorities. The project is also consistent |
|with Peru’s Strategic Biodiversity Guidelines for the Peruvian Amazon Basin which encourage research to monitor biodiversity in the |
|Amazon. In addition, the project is consistent with Peru’s strategies for managing its forests (e.g., Plan de Acción Forestal y de |
|Fauna 1990- 2000) and high priority biodiversity areas (FANPE-GTZ-INRENA). |
| |
|Existing Peruvian legislation permits exportation of faunal species that are listed on CITES Appendix II if they are |
|sustainably-produced via appropriately-managed zoocriaderos (breeding facilities). The Instituto Nacional de Recursos Naturales |
|(National Institute for Natural Resources, or INRENA) is highly supportive of this project and is expected to facilitate export |
|permits in the near future. No GEF funds will be disbursed to the project sponsor until the initial export permits are in place. |
|8. GEF national operational focal point and date of country endorsement: |
|This project was endorsed by the GEF Operational Focal Point for Peru, Mr. Mariano Castro Sánchez-Moreno, Executive Secretary of the|
|Consejo Nacional del Ambiente (CONAM) on October 4, 2001. |
|Project Objectives and Activities |
|9. Project Rationale and Objectives: |Indicators: |
|Goal: to protect rainforest and alleviate poverty in highly |1. Local population increase their income due to frog sales |
|threatened sites in Peru |2. Decrease in deforestation at project sites |
|Objectives: to promote sustainable cultivation of poison dart |3. The business established via the MSP profitably exports poison |
|frogs for export, so local people can earn a better living from |dart frogs |
|conserving the forest than by cutting it down | |
|10. Project Outcomes: |Indicators: |
|Biodiversity Preservation | |
|At least 15,000 ha of rainforest is preserved from destructive |# of hectares conserved |
|practices | |
|Land preservation strategies in place for at least 6 communities |# of communities with land preservation strategies |
|through partnerships with INRENA or local NGOs | |
|Increased awareness of value of frogs/forest among at least |# of schoolchildren instructed and # of adults trained |
|10,000 schoolchildren and 850 adults | |
|At least 20 INRENA officials will be fully aware of sustainable |# of INRENA staff trained |
|frog production methods and able to monitor sustainability of | |
|frog business's practices | |
|Decrease in slash-and-burn and other destructive agricultural |# of campesinos who abandon slash-and-burn practices |
|practices among at least 250 campesino families | |
|Poverty Alleviation | |
|At least 250 campesino families bring their income to minimum |# of campesinos reaching minimum wage via frog business |
|wage via the frog business | |
|At least 100 campesinos earn minimum wage from local and |# of campesinos who can earn minimum wage through local or foreign|
|international tourist visits to collection centers & project |tourist visits |
|sites | |
|Conservation of Poison Dart Frogs | |
|Populations of at least 60 Peruvian poison dart frog species will|Population size of selected species and variants |
|be stable or increasing | |
|Illegal smuggling of Peruvian poison dart frogs will be virtually|# of smugglers identified |
|eliminated | |
|Additional Project Benefits | |
|Commercialization of additional NTFPs |# of feasibility studies carried out that lead to sustainable |
| |production of additional NTFPs |
|Sustainable frog production will be initiated in at least 2 other|# of new countries using ZIRA method for frog businesses or |
|countries |in-situ conservation purposes |
|Expertise about Peruvian amphibians and their habitat will be |# of academics participating in joint seminars or research |
|increased among at least 30 Peruvian academics | |
|11. Project Activities |Indicators: |
| 1. Inventory of frogs and related biodiversity resources |1. Inventories, manuals and other documents issued. |
|(status, threats, etc.) ($ 62,715) | |
|2. Organizing, technical assistance and capacity building for |2. Local producers organized in committees and trained. |
|local producers ($97,406) |3. Frog production lots established & operational |
|3. Establishment frog production lots ($291,601) |4. Collection centers operating and exporting |
|4. Collection centers’ infrastructure, equipment and operation |5. Technical staff at INRENA trained to monitor & supervise |
|($681,310) |sustainable poison dart frog production |
|5. Training and capacity building in national institutional |6. Annual sales of sustainably bred poison dart frogs & |
|counterparts ($24,190) |participation in frog trade associations/events |
|6. Market development and international media promotion |7. Poison dart frog community-based production model is |
|($137,405) |replicated in other countries and with other NTFPs |
|7. Model replication in other countries and with other NTFPs |8. # of tourists paying to visit poison dart frog |
|($128,642) |attractions/tours |
|8. Ecotourism and tourism development ($20,000) |9. # of educational talks/seminars given |
|9. Educational outreach ($31,620) |10. Timeliness & quality of quarterly reports to IFC; financial |
|10. Project management and administration ($177,842) |audits |
|11. Monitoring and evaluation of social, environmental and |11. Timeliness & quality of M&E reports |
|economic indicators ($80,000) | |
|12. Estimated Budget (in US$): |
| |
|Project Preparation: |
|GEF: $ 25,000 PDF-A |
|Co-financing: $ 39,000 World Bank “Innovation in the Marketplace” (cash) |
|TOTAL: $ 64,000 |
| |
|Project Implementation: |
|GEF: $ 788,540 |
|Co-financing: $ 56,000 World Bank “Innovation in the Marketplace” (cash) |
|$ 272,732 Frog Export Business (cash) |
|$ 26,131 INIBICO (in kind) |
|$ 351,375 Curmi (87% cash; 13% in kind) |
|$ 186,264 Frog Producer Associations (in-kind) |
|$ 55,880 INRENA (Peruvian Government) (in kind) |
|$ 45,000 Distributors (cash) |
|TOTAL: $ 1,781,922 |
| |
|GRAND TOTAL: $ 1,845,922 |
|Information on institution submitting project brief |
|Information on project proposer: This proposal has been developed by a joint venture consisting of INIBICO and Curmi: |
| |
|INIBICO is a nongovernmental organization specializing in the investigation, protection and management of poison dart frogs, other |
|amphibians and reptiles, and fish in northeastern Peru. Located in the high jungle city of Tarapoto in the Department of San Martin,|
|INIBICO has easy access to a variety of ecological zones from high cloud forest to the lowlands of the Amazon basin. INIBICO |
|includes fishery biologists, herpetologists, botanists, ecologists, and agro-industrial engineers. INIBICO’s manager, Dipl. Biol. |
|Rainer Schulte, is the world’s foremost expert in the biology and management of Peruvian and other poison dart frogs. |
| |
|The frog export venture will receive accounting, financial management and marketing support from Curmi, a Peruvian NGO with a track |
|record as a successful incubator of local “green” businesses. In the areas where the frog project will take place, Curmi has |
|promoted agricultural projects to substitute slash-and-burn agriculture with permanent crops such as cocoa and hearts of palm. |
|Curmi successfully managed the creation of local processing plants whose products are sold in national and international markets. |
|Curmi has also executed educational projects, with an agricultural institute in Sisa as the main example. |
|14. Date of initial submission of project concept: October 9, 2001 |
|Information to be completed by Implementing Agency: |
|15. Project identification number: 506393 |
| Implementing Agency contact person: Sam Keller, IFC Projects Officer, skeller@ |
|Project linkage to Implementing Agency program(s): IFC has provided support to various types of “biodiversity businesses”, which |
|are commercial enterprises that help to conserve biodiversity. Either directly or through intermediaries, IFC has helped to finance|
|ecotourism companies, organic agriculture companies, sustainable cocoa growers, a sustainable hearts-of-palm producer, a sustainable|
|babassu producer, and a shade-grown coffee producer. The poison dart frog project adds some important new elements: it brings |
|together tropical biologists (who know how to artificially enhance the forest’s productivity), business managers (who know how to |
|run companies), and campesinos (who know how to sustainable harvest and conserve biodiversity resources if given the right |
|opportunities) – and thereby offers hope of a new type of business that is able to generate profits from tropical forest without |
|damaging it. In fact, the production technology is so effective and innovative that it can actually help to restore native frog |
|populations in areas where they have been depleted. Thus, this project will make a valuable contribution to IFC’s portfolio of |
|biodiversity-related investments – and to global efforts to find viable ways to monetize the economic value inherent in biodiversity|
|in a manner that encourages conservation of biodiversity resources. |
Project Description
Project Rationale & Objectives
Peru is one of the eight “mega-biodiverse” countries which together possess more than 70% of the world’s biodiversity. The country provides habitat for over 360 species of mammals, 1,700 species of birds, 20,000 species of flowering plants, 290 species of reptiles, and 250 species of amphibians. Many more species have yet to be discovered by the scientific community. Nonetheless, forests are being rapidly cleared throughout the country for logging, agriculture, and infrastructure development. Although many conservation projects are underway in Peru, they often lack adequate long-term funding. At the same time, many conservation practitioners find it difficult to generate revenues from the sustainable use of biodiversity. These difficulties arise in part because sustainable production methods are not known, markets are often hard to reach, start-up capital is lacking, good management capacity is hard to find in biodiversity-related sectors, and government institutions inadvertently create regulatory barriers to the sustainable use of biodiversity.
Despite these challenges, conservation practitioners in Peru (and around the world) are devoting considerable attention to finding viable ways to generate income from forests without destroying them. Recently, innovative research in Peru has shown that there exists a possibility to do so by sustainably breeding poison dart frogs (Epipedobates and Dendrobates) for export.[1] These beautiful frogs fetch $40-120 in steadily growing hobbyist markets in the United States, Europe and Japan.
This project will support the establishment of a business that will export frogs to hobbyists in North America, Europe, and Japan. This business – with expected annual revenues of about $300,000 in Year 3 – will provide supplemental livelihoods to more than 250 campesinos. It will also provide them with an incentive for preserving over 15,000 hectares of tropical forest. And the sustainable breeding methods will sustain the populations of over 60 species of frogs.
In addition, this project will implement a strategic combination of complementary activities aimed at maximizing the long-term conservation-related benefits associated with the export business. First, it will provide agricultural assistance to participating campesinos (farmers) so they are able to move away from slash-and-burn agricultural methods. Second, it will provide ecological education to foster greater awareness among the participating campesinos and other stakeholders regarding the project’s conservation-related objectives. Third, it will establish a strategic partnership with a credible local ecotourism operator in order to create an additional revenue stream from tours of the project’s facilities and implementation sites. Finally, this project will help to strengthen the management of several protected areas because the export business will use some of its revenues to hire full-time conservation specialists, including forest rangers.
Sustainable Frog Production Methods
The project’s innovative frog[2] production methods are notable for several reasons: they only function in situ¸ thereby encouraging the protection of local ecosystems; they create a surplus population that can be harvested while leaving the original population intact; and they are low-cost, low-tech, and easy to learn.
Rainer Schulte, the chief biologist for this MSP, invented these methods after years of meticulous study of the frogs’ natural breeding cycle. The female glues her eggs onto leaves located above the ground in trees. When the tadpoles hatch, the male puts them on his back and carries them to water, typically to a catchment in the crook of a leaf. Then, depending on the species, the tadpole feeds on mosquito larvae or unfertilized eggs laid for them as food by their mother. The limiting factor of the frogs’ reproduction is the number of suitable breeding sites. This provides the opportunity for expanding production through a simple intervention in the ecosystem which enables harvesting a ‘surplus’ population without harming the balance of the ecosystem.
The production enhancement method, which is the basis of the business model underpinning the project, is dubbed the ZIRA method. It consists of placing artificial breeding sites in trees in the frogs’ natural habitat. These artificial sites, which are simply plastic soft drink bottles cut in half and filled with water, greatly enhance breeding success: the frogs place their eggs in the artificial breeding sites. The ‘surplus’ of tadpoles thus created can be harvested from the bottles, put in grow-out cages on the forest floor and then exported as juvenile frogs.[3]
The impact of frog cultivation on the natural environment is negligible. The containers hardly cause any visual pollution because they quickly become overgrown with algae and moss. The management trails are also hardly visible because they are so narrow. Importantly, data from the first two years of a pilot frog breeding project in the Alto Cainarache Valley (upon which the proposed project is based) has shown that removing the “surplus” production of tadpoles from the forest does not affect the natural population: neither the original reproductors nor the natural offspring are touched or bothered during the production process. The proposed project will generate more scientific information on population dynamics and will fine tune the ZIRA method if necessary.
Not only do the ZIRA production methods not harm natural populations, they can actually help to restore native populations in areas where they have been depleted. For example, the pilot project was able to restore original population densities of an endangered variant of D. fantasticus in the managed forest lots of the Alto Cainarache Valley. This was done simply by allowing the surplus population generated via the ZIRA method to return to the forest instead of being harvested.
Furthermore, frog cultivation techniques can help natural populations withstand climatic threats. As the pilot project has witnessed over the past two years, the artificial breeding structures used in the ZIRA method retain water better than natural breeding sites and therefore provide an excellent means of survival in times of drought. This counters dry conditions caused by El Niño and human-induced climate change.
International Market for Poison Dart Frogs
It is difficult to obtain precise figures on the size of the market for poison dart frogs. A survey conducted five years ago estimated that 3% of households in the USA keep a reptile or amphibian. In Europe, an estimated 15,000 people keep poison dart frogs. The largest European market by far is in Germany, with about 8 - 10,000 frog keepers. The Dutch market is about one-third of this size, and poison dart frogs are also kept in significant numbers in Scandinavia (except Norway), the UK, Austria, Italy, and Spain. The number of frog keepers has been steadily growing over the past decade, in particular from people entering the hobby via experience with fish- or reptile-keeping.
Hobbyists often point out that poison dart frogs are not pets, like a dog or cat that recognizes its owner and expresses affection. Rather, they are display animals, to be admired for their exotic beauty. Indeed, these frogs can be quite captivating: their bright colors (blues, reds, yellows, oranges), small size – some smaller than a thumbnail! – and active daytime behavior rarely fail to charm.
Lifelong frog hobbyists offer different explanations for what motivates people to keep poison dart frogs: it can be the human drive to seek novelty, the establishment of a connection with nature, the frogs’ hypoallergenic nature (i.e., non-allergy producing), or simply the fact that these animals can be kept in a small space.
Frog keepers come from all ages and all walks of life – though they are predominantly male. They tend to be passionate about their hobby, and spend time on the internet or in frog clubs to research and exchange information on care and feeding of the animals. Most hobbyists attempt to breed their frogs; this fascinating experience can also turn into a steady source of pocket money because captive-bred frogs can be sold at local frog trading shows. (This potential source of supply/competition has been carefully studied and will be addressed via this project’s marketing strategy. See Table 4 on Project Risks and Mitigation Strategies.)
Typical retail prices for Peruvian species are in the range of $60 to $150 in the US, and $40 - $120 in Europe, with rarer species commanding higher prices.[4] Most frogs are sold through small-scale dealers, rather than pet shops.[5]
Most of the species that the business will export are not available in the North American or European markets. Currently, no Peruvian species are legal for export. Smuggled animals appear in Europe and the US but it often takes years before they are successfully bred and traded.
The proposed business will offer a highly attractive product to frog hobbyists: a legal source of species not currently available, and new genetic material for species that are already on the market. In addition, purchasers of our frogs will have the satisfaction of knowing that their purchase is helping to sustain the frogs’ natural habitat and to provide the stewards of that habitat with a fair livelihood.
Frogs’ Welfare During Shipping and in Captivity
The frogs will be shipped from Peru using techniques that avoid wounds and stress. After having received a veterinary check for fungi and diseases via the project’s quarantine system, animals will travel in sanitary containers that provide suitable temperature, humidity, and ventilation. By comparison, smuggled frogs have high mortality rates from being packed in precarious conditions in order to be hidden from customs officials.
While the project cannot guarantee the health of the animals once they are sold to hobbyists, it is reasonable to assume they will be well looked after. Hobbyists highly value their frogs, and generally put a lot of effort into caring for them. The life in captivity of a Dendrobatid frog is typically about 5- 15 years. (Frogs can grow to be 10-15 years old in the wild.) Web sites, magazines, and frog clubs are dedicated to sharing information about the most effective ways to house and feed the frogs. The project will link the best of those sites to the project’s own site, and will also produce educational materials on how to care for each species.
Globally-Significant Biodiversity Conservation
This project will aim to sustainably produce poison dart frogs in over 250 production lots covering more than 3,000 ha in Peru. Nearly 80% of the lots are situated in buffer zones of national parks and reserves; one lot is located inside a protected area; the rest are found in unprotected forests located outside of buffer zones. All will help to conserve globally significant biodiversity, as explained below.
Highly Diverse Frog Habitat
The most common habitat for poison dart frogs is tropical humid forest, since the frogs typically require more than 2500 mm of rainfall each year. Within the broad category of tropical humid forest, poison dart frogs prefer the so-called “high forest” or “upland forest.” Half of the known Peruvian species live in premontane and montane high forests. Eight percent live only in cloud forest found at high altitude summit conditions. Because poison dart frogs live mainly in tropical humid forest, and particularly “high forest,” by protecting the frogs’ habitat, this project will help to conserve sections of biologically rich ecosystems.
Conservation Value of Project Sites
This map[6] shows the geographic scope of the proposed project’s three Frog Collection Centers, which are located near the frog producers and the production lots. The project would seek to establish production lots in nearly all Amazonian and East Andean ranges where endemic poison dart frogs live. The project would create a network of conserved habitats (in situ conservation) for a minimum of 60 currently known Peruvian poison dart frog species and distinct variants.
Most of the frog production lots are located in “hot spots” for different types of plants and animals, as listed in Diversidad Biológica del Perú.[7] Specifically, they are located in Endemic Bird Areas (EBA) and other “hot spots” for mammals, butterflies, palms, flowering plants, and freshwater aquarium fish.
In addition, Diversidad Biológica del Perú identifies ”white spots” where biological data for certain types of plants and animals is severely lacking. About 60% of the frog production lots are found within “white spots” for different types of plants (such as palms and ferns) and/or animals (including various types of birds, butterflies, reptiles, and fish).[8] As a result, it is anticipated that new endemic frog species and other animals/plants will be detected over the course of this project.
Furthermore, Diversidad Biológica del Perú establishes the category of Priority 1 Rainforest Conservation Zones by examining biological studies of many different organizations (e.g., BirdLife International, Conservation International, World Wildlife Fund-USA, Profauna- Peru). Although each organization may have its own focus (e.g., birds, mammals, bats, etc), when the data is compiled, it is possible to establish fairly accurate maps of the most biologically diverse areas (with the exception of “white spots”, as mentioned above). The Priority 1 Rainforest Conservation Areas are basically those areas that constitute “hot spots” for many different types of plants and animals. Most of the frog production lots are located in these Priority 1 Rainforest Conservation Areas (see table below). By providing conservation-compatible livelihoods in these areas, this project is expected to not only conserve the land occupied by the frog production lots, but also help to alleviate pressure on the surrounding Priority 1 Rainforest Conservation Areas. As explained in the Project Activities section, the frog export company will utilize some of its revenue to pay for full time conservation specialists to work in conjunction with INRENA. These conservation specialists, including rangers, should be able to help protect approximately 12,000 hectares of Priority 1 Rainforest Conservation Areas.
Table 1: Priority 1 Conservation Zones linked to Frog Production Areas
|Tarapot|Cordillera Azul National Park- buffer zone (Universal Hot Spot range) |
|o |Cordillera Oriental Cerro Escalera Reg. Park- buffer zone (Dendrobatid and General Hot Spot) |
| |Cordillera del Condor- South Spur (New Ancient Refuge) |
| |Pacific Rainforest Remnants – Piura/Tumbes (West Andean Hot Spot) |
|Iquitos|Napo Refuge, north bank, to Putumayo river (General Hot Spot & White Spot Area) |
| |Reserva Comunal Tamshiyacu-Tahuayo- buffer zone (Iquitos Arch Hot Spot- EAST SIDE) |
| |Iquitos White Sands Ecosystem- buffer zone (Iquitos Arch Hot Spot) |
| |Pastaza Fan Ecosystem (Volcanic ash deposit fan and General Hot Spot) |
|Pucallp|Serranía de Síra National Park- buffer zone (Ancient High Endemism Refuge and General Hot Spot) |
|a |Pachitea Refuge (General Hot Spot; Dendrobatid Hot Spot) |
| |Alto Purús Reserved Zone (Tertiary Age Refuge- North Block, General Hot Spot and North- South - Fauna Division Zone) |
| |Parque Nacional Yanachaga– Chemillén – buffer zone (High Endemism Range) |
| |Sierra Divisor Arch System (Newest General Hot Spot and important ancient endemic species refuge) |
| |Cordillera Azul- central segment (High Endemism Area; Hot Spot for Amphibians) |
|Souther|Nudo de Pasco- High Altitude East Andean refuge (Dendrobatid hot spot- High Endemism Range for Amphibians) |
|n |Madre de Dios/Tambopata- buffer zone (Tertiary Refuge- South Block: Fitzcarraldo Arch- South Range) |
|Peru** |Manú National Park- buffer zone (Fitzcarraldo Arch- North Block- High Endemism Range-East Andes) |
**The Southern Peru sites will be developed during or after Year 3 if there has been sufficient market demand. They are not shown on the preceding map.
Finally, it should be noted that several frog production lots are located in “Extremely Urgent Protection” areas, as identified in Diversidad Biológica del Perú. These are sections of Priority 1 Rainforest Conservation Zones that are exposed to a high risk of deforestation. In fact, some potential frog production lots were destroyed during the PDF-A process, one of which is shown at right. Thus, this project will be implemented with a sense of urgency.
Ecological Significance of Poison Dart Frogs
Poison dart frogs merit special attention from conservationists not just for being a “charismatic species,”[9] but also for their value to their ecosystems, to human health, and to scientific study.
Poison dart frogs are recognized as indicator species for the general health of their ecosystems. The frogs also contribute to insect control in their ecosystems: different species feed on ants, mites, and the larva of crickets, cockroaches, and especially, mosquito larvae, which can harbor human and animal diseases.
Poison dart frogs secrete molecules of significant medicinal interest. Secretions from Epipedobates tricolor, a species present in Peru, are the basis for Epibatidine, a new, powerful, and non-addictive painkiller. Researchers worldwide continue to explore possibilities for developing medicines and pesticides based on poison dart frogs’ secretions.
Finally, scientists are studying poison dart frogs for insights they provide into biogeography, or the evolution and dispersal of species. The frogs’ ancient roots – it is possible to follow their speciation process back to 25- 30 Million years ago – make them ideal species for this field of study.
Land Ownership Status
The frog production lots will be located on land that is under different types of ownership. Some of the lots will be located on lands owned by native communities. The native communities possess legal title to these lands and manage them communally. The rest of the frog production lots will be located on lands occupied by colonos (families who have more recently migrated to these areas). For these frog production lots, there are three different land ownership situations: (i) some of the colonos possess a legal title; (ii) some do not have a title but could obtain one because they settled in land that is not legally protected; and (iii) some colonos do not have a title and cannot obtain one because they settled in land that is legally protected. Although people in this last category cannot obtain a legal title to their land, they can obtain permission from INRENA or the Ministry of Agriculture to engage in productive activities on the land if the activities are deemed to be sustainable. Overall, it does not appear that issues related to land ownership will affect the project’s ability to achieve long-term conservation of biologically rich tropical forest.
Baseline Situation
In the absence of GEF funding, the baseline scenario is a continuation of “business as usual” that would lead to a higher level of deforestation, low income among local campesinos, and a decline of frog populations. There would be no export of sustainably-bred poison dart frogs; the existing regulatory and institutional barriers to the sustainable commercial use of biodiversity would persist; there would be no frog-related ecotourism; and the campesinos would earn no revenues beyond what they are able to earn through subsistence agriculture. The campesinos would continue to cut down the forest as part of their struggle to make a living. Much of the frogs’ habitat would be lost; in fact, some species may go extinct. These baseline trends are described further below.
Continued Deforestation
Continued use of destructive agricultural practices.
In the baseline scenario, there would be continued deforestation in the areas where the project would have been implemented. The district of the Alto Cainarache Valley (where approximately 50 frog production lots would be located) illustrates the trend. Thirty years ago, this district contained 4.5 million hectares of tropical forest. It now contains only 1.8 million hectares. This has occurred in part because in-migration has been increasing the population in the Alto Cainarache Valley. Nearly all of the immigrant families make their living through shifting cultivation, coffee production, and cattle ranching. Although cutting down the forest in the Alto Cainarache Valley has been prohibited since 1992 (when the area was declared a buffer zone), this law has not been enforced. The local population continues to cut down more and more forest. One of these areas is shown below. Unfortunately, this is not an isolated problem: all of the project sites face a similar situation to the Alto Cainarache Valley.
Although deforestation is a serious problem for both the lowland and highland forests where the project would be located, it is exceptionally severe in the highland areas. The high forest areas are closer to the poor and highly populated Andean regions, and the soils there are thicker and more fertile than in the lowlands, where agriculture is almost impossible. Therefore, the highlands attract more immigrants. Nearly all of the immigrants use agricultural methods which are unsuited to their new environment. As a result, there is considerable human pressure on the high forest areas, resulting in rapid deforestation. This pressure would remain unmitigated in the baseline scenario.
In addition, the native population has also been growing at a high rate in the Alto Cainarache Valley and other areas where the project would be implemented. Because natural resources have been overexploited, fishing and hunting is no longer a feasible way of life for many of the native people, so they also practice slash-and-burn agriculture. This trend would also continue in the baseline scenario.
No Ecological Education.
In the baseline scenario, there would be no funding to provide ecological education for campesinos, students, or other stakeholders. As a result, hundreds of individuals would not learn about the potential to generate income from standing forests; rather, they would continue to believe that the only way to make a living from forests is to cut them down.
Limited Opportunities for Local Income Generation
No Frog Business.
In the baseline scenario, the frog export business would not be established. Banks and investors would not be willing to finance it because they are unfamiliar with this type of activity and do not know how to appraise it. In addition, the export business would not be created because the financial expertise of IFC and Curmi would not be provided.
No Frog-Related Ecotourism.
Without GEF funding, there would be virtually no frog-related ecotourism in Peru. Although there are clear indications that frog hobbyists and scientists in North America and Europe are interested in visiting Peru in part to see poison dart frogs in their natural habitat and to learn firsthand about the sustainable use of biodiversity, these opportunities would remain undeveloped in the baseline scenario. Rural communities would not be able to earn income from the tours that could be created for such visitors.
No Commercialization of other NTFPs.
In the baseline scenario, it would not be possible to bring other local NTFPs into sustainable production. This is because there would be no financial resources or organizational capacity to investigate potential new rainforest products, to develop sustainable production methods, to conduct market studies, or to develop business plans. As a result, an unknown number of options for sustainably utilizing biodiversity would remain untapped.
Decline in Frog Population
Continued Frog Smuggling.
A major baseline threat to poison dart frogs is the increased pressure of contraband smuggling, which can wipe out entire local frog population groups. Under current Peruvian regulations, wild poison dart frogs cannot be exported.[10] Nevertheless, hobbyists yearn to keep these rare and beautiful animals, and are willing to pay considerable money for them. The potential to earn money, and the relatively low risks involved, create a small but lucrative frog smuggling trade. In 2001, at least eight species of illegal Peruvian dendrobatids were detected in Europe.[11] The smugglers typically pay local people $10-50 to capture a few hundred frogs. As a result, the local population of a given species is sometimes severely reduced. A few years ago, in the Alto Cainarache Valley, smuggling almost wiped out the red-headed D. Fantasticus. (Fortunately, the pilot project for this MSP rescued the species by allowing the breeding method to run free.)
Persistent Barriers to Legal Exportation of Sustainably-Produced Frogs.
In the baseline scenario, INRENA would not authorize the legal exportation of poison dart frogs produced through the ZIRA method. The lobbying efforts of Curmi are necessary to convince INRENA to authorize exportation, but Curmi could not be involved without GEF support (since Curmi must cover its costs). INRENA would only authorize frog exports if it could first receive capacity building to allow it to properly monitor the trade; this would not be possible in the baseline scenario either, for lack of funds.
Frogs Threatened by Increased Climate Variability.
Another significant baseline threat to poison dart frogs is increased climatic variability. Over the past two years, extreme dry seasons caused natural breeding sites in the pilot project area to dry up . Yet the artificial breeding sites that were installed as part of the pilot project remained full of water throughout this period, thereby helping the frogs to survive. In the baseline scenario, such artificial breeding sites would not be maintained long-term at the pilot site, because the campesinos would abandon the project if they are not able to earn income from frog exports. In addition, poison dart frog species in other parts of Peru would remain vulnerable to climatic variability because artificial breeding sites would not be installed there either.
Missed Opportunities for Replication
Without GEF support, it would not be possible to extend the sustainable production methods to other countries despite the potential for applying the methods in other parts of the world. During the PDF-A project preparation process, the sponsors were contacted by groups in Ecuador, Brazil and elsewhere who were interested in implementing the ZIRA method (in some cases for commercial purposes, and in other cases for species-rescue purposes). In the baseline scenario, there are no resources to provide outreach or technical assistance to such organizations.
Expected Project Outcomes
The project’s main outcomes are in three complementary areas: forest preservation, poverty alleviation, and frog conservation. The project also supports a few related beneficial outcomes. The outcomes are described below, and then summarized, along with indicators and goals, in Table 2.
Forest Preservation
The frog production lots will provide a direct incentive for campesinos to conserve approximately 3,000 hectares of tropical forests (see Annex 1). Both the initial training and the ongoing technical support will seek to impart to the campesinos an appreciation for the economic and environmental value of the standing forests. The project will buttress this action with explicit conservation strategies appropriate for each region in which it is operating. Discussions have already begun with INRENA about contracting rangers to protect the forest. In certain areas, NGOs are developing community vigilance programs for forest protection, and the project may also partner with them. In this case, the project would hire community conservation specialists. At any rate, the Business Plan explicitly sets aside enough revenues to cover six rangers/conservation specialists (2 per Collection Center). It is conservatively estimated that each ranger/conservation specialist –working in conjunction with local communities – can cover approximately 2,000 hectares. Together they will support the preservation of approximately 12,000 hectares (in addition to the 3,000 hectares directly conserved as frog production lots). As mentioned previously, these lands will overlap considerably with Priority 1 Rainforest Conservation Zones.
Poverty Alleviation
The frog business itself will provide conservation-compatible livelihoods for over 250 campesino families.[12] Typically, the campesinos have a monthly income of about $50. The Business Plan projects that enough money will be generated from frog sales to be able to pay each producer enough to increase monthly income to $115, which is considered a basic monthly salary for Peru the minimum wage in Peru (while this wage would be low for a city-dweller, it is a decent income in the countryside). xx need to ask Lluis what ‘basic’ means minimum wage? Subsistence? Also, we need to look again at spreadsheet because the numbers don’t quite add up. I’ll show you Monday. It’s not too serious, it means we have to increase the percentage that goes to producers. The project will also provide these families with guidance on environmentally friendly agricultural practices which can boost their net revenues. Extensionists, who will be regularly visiting villages to train people in the use of sustainable frog production methods, will be responsible for this basic agricultural training.
Side activities catalyzed by the project should also generate income for poor rural families living in the project area. Plans include small-scale frog- or nature-tourism, or the commercialization of other NTFPs (non-timber forest product).
Conservation of Poison Dart Frogs
The populations of poison dart frogs are threatened by deforestation, droughts, and smuggling. The project incorporates strategies to fight against each of these threats. Its poverty alleviation measures are premised upon finding ways for campesinos to earn a living from standing forest, and particularly from forest regions that are frog habitats. The project therefore will provide a strong incentive for campesinos to conserve forests. The project addresses the threat posed by droughts because – thanks to regular maintenance from frog producers – the ZIRA breeding vessels contain water even in dry seasons. The frog business will provide a means to reduce, if not eliminate, the illegal frog trade in Peru because campesinos will no longer have an incentive to sell frogs to smugglers. The campesinos will be able to earn more money by sustainably producing frogs for the project’s export venture (which will also be a much more reliable, long-term buyer than smugglers). Anyone who does sell frogs to smugglers may no longer be able to participate in the project – a powerful disincentive. Thus, smugglers will find it difficult to find suppliers. And there will be little possibility for anyone to steal frogs from the production lots because the campesinos will guard these assets closely. Finally, the project will reduce smuggling because it will promote regulations to ensure that only juvenile frogs may be exported. Because juvenile frogs do not chirp, the only way to obtain them in significant quantities is to breed them.[13]
Related Outcomes
The project will bring about related outcomes that will also support land preservation and poverty alleviation.
• The project will provide training to INRENA on sustainable frog production methods. This training will allow INRENA to monitor the sustainability of the business’s practices.
• The project will share its knowledge and experience of the ZIRA methods with groups in other countries. This will lead to replication of our methods, either for conservation purposes, or for the establishment of other sustainable frog export businesses.
• Finally, the project will increase local expertise about amphibians and their habitat.
Table 2: Summary of Project Outcomes and Indicators.
|Biodiversity Preservation | | |
|Primary outcome |Primary indicator |Goals |
|Land is preserved from practices that destroy biodiversity |# of hectares conserved |15,000 |
|Secondary outcomes |Secondary indicators | |
|Land preservation strategies in place through partnerships with |communities with land preservation strategies |6 |
|INRENA or local NGOs | | |
|Increased awareness of value of frogs/forest |# of schoolchildren instructed |10,000 |
| |# of adults trained |850 |
|INRENA fully aware of our methods and able to monitor |Number of INRENA staff trained |20 |
|sustainability of frog business's practices | | |
|Decrease in slash-and-burn and other destructive agricultural |Number of campesinos who abandon slash-and-burn |250 |
|practices |practices | |
|Poverty Alleviation | | |
|Primary outcome |Primary indicator |Goal |
|Campesino families bring their income to minimum wage via the |# of campesinos reaching minimum wage via frog |250 |
|frog business |business | |
| | | |
|Secondary outcome |Secondary indicator |Goal |
|Income generation from local and international visitors to |Number of campesinos who can earn minimum wage |100 |
|collection centers |through local or foreign tourist visits | |
| | | |
|Conservation of Poison Dart Frogs | | |
|Primary outcome |Primary indicator |Goal |
|Targeted poison dart frog populations stable or increasing |population size of selected species |60 species |
| | | |
|Secondary outcome |Secondary indicator |Goal |
|Reduction in number of smugglers |Number of smugglers identified |zero by Year 3|
| | | |
|Additional Project Benefits | | |
|Outcomes |Indicators |Goals |
|Commercialization of other NTFPs |# of feasibility studies that lead to sustainable|2 |
| |production of additional NTFPs | |
|Commercial or conservation-related replication in other |Number of new countries using ZIRA method for |2 |
|countries |frog businesses | |
| |# of new countries using ZIRA method for ins-situ|2 |
| |frog conservation | |
|Increase in local expertise about amphibians and their habitat |# of academics participating in joint seminars or|30 |
| |research | |
|Training for INRENA officicials on sustainable frog production |Number of INRENA staff trained |20 |
|methods | | |
Project Activities
This project will meet its land preservation, poverty alleviation, and frog conservation goals through four main activities:
i) Business Support: establish a new frog export venture, provide ongoing business incubation services, and build market demand in North America, Europe, and Japan through marketing campaigns;
ii) Education and Training: provide training for frog producers, educational outreach for schools and universities, and capacity building for relevant government agencies;
iii) Complementary Strategies for Forest Preservation: preserve forests from destructive practices by hiring conservation specialists, promoting ecotourism, and providing agricultural assistance for campesinos who participate in the project;
iv) Replication: promote replication domestically by applying the ZIRA methods to other species and assisting organizations in other countries to initiate sustainable PDF production;
The project also allocates resources to (v) Monitoring and Evaluation (M&E) of social, environmental, and economic indicators; and to (vi) Project Management.
Business Support
Start-Up Advice and Ongoing Business Incubation
The business will have a board of directors consisting initially of representatives from Curmi, Inibico, and IFC. This board will select a CEO to run the business.[14] Curmi will provide the CEO and his/her staff with assistance, as needed, in starting up the business (obtaining permits, hiring staff, setting up accounting procedures, deciding on distribution strategies, etc).
Once the business is running, Curmi will review the business’s quarterly reports, and provide feedback if it detects aspects of the business that would benefit from some fine-tuning. The quarterly reports will give Curmi (and IFC) a way to regularly track the business’s progress. Curmi will also be available to answer the business’s questions on an ongoing basis.
The production and distribution structure will have four levels:
1. The frog producers (farmers or native people) will be grouped into Frog Producers’ Associations, such as ASPRAVEP, a campesino association which has participated in the pilot on which this project is based. They will receive training, technical assistance and microcredits for infrastructure (see below under Training).
2. A Local Collection Center (LCC) will receive frogs from the committees. At the LCCs, staff will check frogs for diseases and for correct export size. The project will build three LCCs, located in Tarapoto, Iquitos and Pucallpa. In year 1, the business will start with the collection center in Tarapoto, which will also house offices for administrative staff. The collection centers will be designed to receive visitors and tourists (see below under education and tourism).
3. Meanwhile, the business headquarters in Tarapoto would track frog production data sent by the collection centers, and orders received from abroad. The headquarters is responsible for export permits and documentation.
4. Finally, the business will sell to selected distributors in Europe, Japan and North America. The North American distributor has already been selected. Candidates for European and Japanese distributors have been identified, and are being selected.[15]
Given the small size of the market, the US, European or Japanese distributors tend to be small-scale operations, typically one or two people with a “day job” working part-time at the frog exports. These small distributors can in turn sell to pet shops. Once the project is fully operational and market development activities have increased consumer demand for the frogs, the business will assess the option of selling directly to large-scale pet shops; initial research shows that while the volume of sales to pet shops may be high, the price they would offer might not be high enough.
Frog Breeding Equipment and Operation
Producers (campesinos organized in committees) will install artificial structures in the forest to breed and raise poison dart frogs. Additional equipment is needed for handling and transporting the animals. Each producer will install 100- 200 breeding vessels, set up containers for tadpoles and construct a protection cubicle for them, and prepare fly cultures. GEF funds will be used to cover the start-up costs of equipment for the campesinos, materials for transporting the froglets to the LCCs, and permits and licenses.
Collection Centers’ Equipment And Operation
Once the frogs grow to semi-adult or juvenile size, they will be transported to a Local Collection Center (LCC). Each LCC will have its own vet control, laboratory, offices and other services. The project will start with a LCC in Tarapoto, and, assuming the business is doing well, build two additional LCCs, one in Iquitos and one in Pucallpa, in years 2 and 3. The investment for each LCCs will cover the cost of the building and of associated equipment and vehicles. To avoid overloading the project in the first year, IFC will approve the building of the second and third LCCs only after the first one is built and operational.
Market Development
The business will work closely with its distributors to put in place strategies to expand the market for sustainably-produced Peruvian poison dart frogs.[16] Market development strategies being considered include:
• Advertising and placing articles in reptile and aquarium magazines (research has shown that many frog hobbyists are former fish hobbyists, hence the outreach to aquarium keepers)
• Cooperative advertising with zoos, botanical gardens, and other institutions
• Advertising through internet frog groups
• The publication in English of Mr. Schulte’s classic studies of Peruvian frogs (currently available only in German), and of frog-keeping handbooks.
• Coordinated campaigns with television and large-scale print media; during the preparation of the MSP, we have received expressions of interest from media in several countries. Any media features will be carefully coordinated with our distributors so the business can capitalize on the publicity.
• The development of simple “frog kits” for schools, offices, or private individuals, consisting of a terrarium, frogs, plants, and instructions on CD-Rom and/or Video.
Education and Training
Local: Training for Frog Producers
This activity will have four components.
• Selecting campesinos to work with, and helping them form a Producers’ Association.
• Initial technical training, and distribution of frog production equipment.
• Ongoing technical support, including site checks.
• Leadership training
The technical support will be covered by GEF funds during the lifetime of the project. By the close of the project, when the need for technical support will have lessened, those costs will be borne by the business.
The initial training will be provided by the lead biologist and extensionists. There will be two extensionists per LCC.
The project will also offer leadership and empowerment training to campesinos with a key role in their community or in the frog producers' association. The training will help to consolidate the community/association, by giving it tools for addressing potential internal conflicts, and for making decisions in a democratic way.
Local: Educational Outreach in Peru
The LCCs will be used as a base for educating the local population about the frogs and their ecosystems, and about the beauty and value of the natural resources in their areas. Exhibits and traveling shows will target campesinos, schoolchildren and University students. The project will also cooperate with amphibian research programs in Peruvian universities.
National: Training for INRENA and Customs Officials
The project will offer capacity building on amphibian issues to INRENA technical staff. It will train INRENA staff in Tarapoto, Iquitos, and Pucallpa in the sustainable production methods, so that they can better monitor the project’s environmental practices, and more quickly provide export licenses.[17]
The project will also train customs officials; this training will inform them of our methods, so as to facilitate quick expediting of our shipments. Customs officials will also receive training in the detection of frog smugglers.
Complementary Strategies for Forest Preservation
Conservation Specialists
In each area where the project operates, the frog export business will allocate some of its revenues to supporting conservation efforts for the surrounding forests and protected areas. This is important because at present there is very little conservation-related activity (enforcement, environmental education, etc.) in the buffer zones, where most frog production lots will be located, or in nearby protected areas. Most of the protected areas are severely under-staffed, with low operational resources. Therefore, the frog export business plans to hire two full-time individuals to promote conservation in conjunction with each Collection Center. Since the project aims to have three Collection Centers operating by the end of Year 3, the goal is to hire a total of six conservation specialists by that time.[18]
The specific conservation strategy to be used in a given area will depend on local needs and conditions. Although all of the conservation specialists will be paid for by the frog business, in some cases, they will be contracted by INRENA. An initial agreement has been formulated with INRENA in this regard. These conservation specialists will be deputized by INRENA as rangers, with full authority to enforce legislation. They will come from the communities where the project is implemented, and will be assigned to local protected areas in need of assistance. The specific protected areas that will receive the rangers will be determined in conjunction with INRENA during project implementation.
Depending on local conditions, it may be preferable for the frog business to pay for conservation practitioners to work in conjunction with local environmental NGOs. For example, in the Alto Cainarache Valley, an environmental organization called CEDISA is working with community members to establish Comités de Protección Ecológica (Ecological Protection Committees). Deputized by INRENA, the members of these committees will have authority to apprehend illegal loggers and migrators who encroach on protected forests. The Comités can contact INRENA, who then sends the Policia Ecologica (Ecological Police) to deal with the violators.
It is estimated that the conservation specialists/rangers will be able to cover about 2,000 ha (20 km2) each. Thus, the overall conservation status could be improved for 12,000 ha (120 km2) with the efforts of six conservation specialists working closely with local communities. (This is in addition to the roughly 3,000 ha that is expected to be preserved as frog production lots.) This is a reasonable, but somewhat conservative, estimate. It would not be unrealistic for the project to help conserve a greater area is it is extremely successful.
Ecotourism
INIBICO currently offers small-scale ecotourism, including overnight forest excursions. Meanwhile, tour operators are already operating in Peru, and research conducted for the preparation of this MSP has identified several groups of hobbyists or scientists who would be interested in “frog tours” to Peru. Rather than building anything from scratch, the MSP would create an alliance between INIBICO, a credible existing Peruvian tourism promoter, and foreign groups interested in frog tourism.
The selected local tourism partner would have good lodging facilities, transportation, and marketing capacity (ie, established relations with travel agencies, etc). This partner would benefit from having a new attraction for his existing clientele as well as a way to attract a new set of clients (frog-related tourists). Funds would be allocated for staff time to create this alliance, and for the development of brochures and other promotional material. These marketing funds will make it for easier for to establish a viable strategic partnership because they will give our partner confidence that we will be able to attract tourists. In all ecotourism activities supported by GEF funds, an emphasis will be placed on environmentally friendly tourist practices which provide revenues to campesinos.
Sustainable Farming
The campesinos involved in the frog business will continue to farm to feed their families and earn money. Without training, they would continue practicing unsustainable slash-and-burn agriculture. Therefore, the project will provide agricultural training for the campesinos in order to encourage them to shift from slash-and-burn practices to more sustainable agricultural methods. [19] Based on experience, Curmi expects this shift will do more than simply reduce the environmental impact of farming: it will also increase the farmers’ cash income, because the techniques and crops to be promoted tend to have higher yields and prices. The project will establish formal agreements with the campesinos in which they agree to stop clearing land in exchange for agronomic assistance and participation in the frog ranching activities.
The training will be provided mainly by the project’s extensionists, who will have experience in sustainable farming methods. Curmi will also try to raise additional funding so that it can extend its considerable organizational capacities for sustainable farming to the farmers who participate in the project.
Replication
Replication With Other Frog Species
The ZIRA method currently works well with dendrobatid and epipedobatid frogs, but for some other species with commercial value, such as phyllomedusa bicolor[20], research is needed to perfect a sustainable breeding method. The project will allocate some of the chief biologist’s time to adapting the ZIRA method to other frog species which have commercial value.
Replication With Other NTFPs
After successfully exporting sustainably produced poison dart frogs for 1-2 years, the project will investigate possibilities to sustainably produce and sell additional non-timber forest products (NTFP). This will be an important element of the project’s strategy to provide sustainable long-term employment for campesinos living in or near conservation priority areas. Although the project will implement a sophisticated marketing strategy in an effort to maintain high demand for Peruvian poison dart frogs, there is a chance that demand may eventually decrease; therefore, the project will aim to carry out feasibility studies for at least two other promising NTFPs by Year 3. By Year 4, the project will aim to bring at least one other NTFP into sustainable commercial production so that the participating campesinos will be more likely to have long-term income generation from this project.
The project’s activities in this area will be developed via the following steps:
a) Research & Development – The project will facilitate biological research on the reproduction methods of other species of flora and fauna that appear to have market potential. An initial consultation between scientists, local communities, and Curmi (representing business expertise) will be held to decide upon areas for research. The research would explore low-cost, simple and sustainable production methods for other species of plants or animals. The following natural resources may be investigated: orchids and bromeliads (which could potentially be sold to frog hobbyists for use in terrariums, and more widely to reptile and plant enthusiasts); native stingless bees (for medicinal honey, for which there is already a local market); other amphibians and reptiles; tropical fish; and butterflies and other insects.
b) Market Research – If viable technological methods can be found to sustainably produce other species of flora and/or fauna, then the project will further investigate the prospects for launching commercial production. This will involve research on the market demand for these species and the prospects for transporting them to market in an economically and technically viable manner.
c) Business Plan Development – If feasible sustainable production methods are successfully developed for another species of flora and/or fauna that has sufficient market potential, then the project will commission the development of a business plan. The business plan will describe and analyze the production methods (including grow-out, processing, and transport), management and staff requirements, marketing plans, and cash flow projections.
Replication in Other Countries for Commercial or Conservation Purposes
The ZIRA method is not well known outside Peru. It could clearly be of value to other communities that wish to establish sustainable frog export ventures, and to conservationists attracted by possibilities for in-situ preservation of frogs. The project will work with countries where promising commercial or academic partnerships can be built around sharing the ZIRA method. IFC and the project sponsor have already received expressions of interest from groups in Nicaragua, Costa Rica, Honduras, Panama, and Brazil. In fact, there is so much interest in launching frog export ventures that the project will need to carefully manage this process to avoid flooding the market. The project will only assist groups that promise to maximize benefits for local communities; properly implement the ZIRA method; establish an effective monitoring system; and install a rigorous quarantine system if they are going to export.
Monitoring and Evaluation
Curmi will engage an independent third party to monitor and evaluate the project’s social and environmental performance against the indicators established in the log frame; Curmi and IFC will track economic performance through routine accounting and financial reporting for the frog business; and INRENA will also contribute to the monitoring of the project by [xxwhat will be Inrena’s role? Sam, do you know this? If not, need to talk to Lluis.]. gathering field data. Although the pilot project has indicated that the ZIRA method does not affect the natural frog population or overall ecosystem, INIBICO will establish control plots to compare harvested vs. non-harvested sites. M&E is discussed further in the Monitoring and Evaluation section at the end of this document, and in Annex 5, which presents a summary of the M&E Plan, including goals, indicators, and the responsible party, schedule, and instruments for tracking these indicators.
Project Management
The overall project will be managed by Curmi, who will provide ongoing business incubation services to the frog export venture and be responsible for executing all of the activities involved in this project (though in some cases Curmi will subcontract other organizations or individuals). Curmi will initially report to IFC about project implementation on a monthly basis, and then on a quarterly basis. Curmi will be expected to implement project activities in accordance with a mutually agreed work plan, with clear objectives for each upcoming period. Any significant divergences from the work plan will be discussed in advance with IFC, and any shortfalls in accomplishing the agreed-upon objectives will be explained in writing.
IFC will provide advanced disbursements to Curmi on a biannual basis based on agreed-upon budgets. If expenditures for the period are not consistent with the budget, then an explanation will be provided in writing. Curmi will request approval from IFC for any commitment or expenditure over $10,000.
Implementation Plan
At the start of the project, Curmi will create a for-profit company (Sociedad Anónima) called Frogs & Forests to manage the frog production, collection centers, and frog exports. As Table 3 indicates below, the company will be initially owned and capitalized by Curmi (25%), INIBICO (25%), ASPRAVEP (10%), and IFC/GEF (40%). Curmi’s presence as a shareholder is important to provide business management skills; INIBICO’s presence is needed to provide biological/technical expertise; ASPRAVEP’s presence will further enhance their stake in the export venture’s success; and IFC’s presence is needed to provide additional business acumen and to oversee the company’s operations on behalf of the GEF (as a major investor).[21]
Table 3: Initial Capitalization and Ownership of Frog Export Venture
|Shareholders: |% Shareholding: |Monetary Value: |
|INIBICO |25% |$ 128,895 |
|IFC/GEF |40% |$ 206,232 |
|CURMI |25% |$ 128,895 |
|ASPRAVEP |10% |$ 51,558 |
|Total | |$ 515,579 |
|Equity Composition | | |
|IFC/GEF Cash Contribution | |$ 206,232 |
|INIBICO Cash Contribution (World Bank Development MarketPlace) |$ 56,000 |
|Intangible Asset Contribution (Non-Cash) from INIBICO, CURMI & ASPRAVEP** |$ 253,347 |
|Total | |$ 515,579 |
**The frog production methods are an intangible asset in accordance with the Financial Accounting Standards Board (FASB) Statement 142. CURMI, ASPREVAP and INIBICO developed this technology during the past several years. They will therefore be allocated equity ownership in accordance with Generally Accepted Accounting Principles (GAAP).
Curmi will plan to transfer some of its shares to participating campesinos in Years 2, 3 and 4. This gradual transfer scheme will allow Curmi and INIBICO to reliably select the producers who become shareholders. As of Year 4, it is expected that the frog producers will own approximately 20% of the company. Although it is not realistic to expect the frog producers to be able to run the export business (considering that most or all of them come from subsistence farming backgrounds), this significant minority equity stake will give the campesinos a long-term interest in the success of the business.
Although IFC and Curmi will eventually need to exit from the export company, before doing so they will ensure that the venture possesses strong enough business and technical capacities to be self-sustaining. The principal strategy for allowing IFC to sell its shares is to find an appropriate strategic partner. If a strategic partner can be found who possesses considerable business management capabilities, a strong commitment to the ecological and social principles of the company, and (hopefully) marketing advantages, then shares may be offered. This could be in the form of a minority ownership, joint venture, or other arrangement. However, it may be challenging to find an appropriate strategic partner who is able and willing to purchase shares due to the nature of this sector (e.g., there are few large-scale dealers, industry players are often reluctant to vertically integrate).
Implementation Schedule
The table below shows the project implementation schedule. In Year 1, project funds will be dedicated to the establishment and operation of the Tarapoto collection center. In Year 2, a second collection center will be built in Iquitos, local campesino communities will be trained, and a land management plan will be devised. Finally, in Year 3, the last collection center will be built, with similar training and outreach in its surrounding communities.
The budget has been designed in a modular way; funds for the each new collection center will only be disbursed if the preceding center is operational. The modular budget is on file at IFC.
Table 4: Implementation Schedule
| |Year 1 |Year 2 |Year 3 |
| |Month |Month |Month |Month |Month |Month |
| |1-6 |7-12 |13-18 |19-24 |25-30 |31-36 |
|Field breeding stations equipment, set-up and operation |X |X |X |X |X |X |
|Collection centers infrastructure, equipment and operation |X |X |X |X |X |X |
| Market development and international media promotion | | |X |X |X |X |
|Education and outreach | | | | | | |
|Educational outreach in Peru |X |X |X |X |X |X |
|Training for INRENA and customs officials |X |X |X |X |X |X |
|Complem. Strategies for Forest Preservation | | | | | | |
|Support to international partnerships for INIBICO's current ecotourism / | | |X |X |X |X |
|frog tourism offerings | | | | | | |
|Sustainable farming |X |X |X |X |X |X |
|Replication | | | | | | |
|Commercial or conservation-related replication in other countries | | | |X |X |X |
|Replication with other species of frogs | | | |X |X |X |
|Monitoring and evaluation | | | | | | |
|Inventory of frogs and related biodiversity resources |X |X |X |X |X |X |
|Project Management and Administration | | | | | | |
Sustainability Analysis
The project has been designed to be environmentally, socially, and financially sustainable.
Environmental Sustainability:
• The project is based on innovative production methods that have virtually no adverse environmental impacts; in fact, the methods can actually help to restore native frog populations in areas where they have been depleted. The project has been reviewed by an IFC Environmental & Social Specialist and will comply with all applicable IFC guidelines.
Social Sustainability:
• The project will train participating campesinos in order to help ensure their long-term ability to properly execute the project activities and to manage the resulting revenues.
• The project will involve Curmi, INIBICO and eventually campesinos as shareholders in the frog export venture in order to encourage and maintain their strong buy-in.
• The project sponsor has been establishing (and will continue to strengthen) links with important national institutions (such as INRENA) and international institutions (such as CITES) to help ensure the continuity of operations beyond the project life.
Financial Sustainability:
• The business plan projections are based on market studies in the United States, Japan, and Europe, conducted in 2002. There has been constant market growth in recent years, with unsatisfied demand for new frog species and varieties, and for other new types of animals/plants. The cash flow analysis indicates that the business is likely be profitable within a few years.[22]
• The frog export venture will have competitive advantages over new competitors, thanks to cheap and effective production methods, with almost no in-breeding, and a high variety of species to be offered to the market, some of them almost impossible to reproduce in captivity.
Risk Assessment
Despite of all the sustainability factors listed above, the project faces certain social, ecological, technical, managerial, and commercial risks.
Table 5: Project Risks and Corresponding Mitigation Strategies.
| | | | |
| |Risk Description |Level |Risk Mitigation Strategies |
|Social |Frog production attracts new settlers. |Med |The project will make it widely known that it can only employ |
| | | |people who lived in or near the project sites when the project |
| | | |started (which will be established through baseline social |
| | | |surveys). |
| |Campesinos sell poison dart frogs to |Low |The project will be able to pay campesinos enough to diminish |
| |smugglers. | |(or eliminate) their incentives to sell to smugglers. As a |
| | | |further disincentive, campesinos who sell to smugglers will no |
| | | |longer be able to sell to the project. |
|Ecologic|Frog production doesn’t stop deforestation. |Med-High |Campesinos will agree to not cut down forests in order to |
|al |Campesinos use frog income to buy more | |participate. INRENA won’t issue permits to campesinos involved|
| |cattle or farm more land. | |in deforestation activities. Beyond that, the project will aim|
| | | |to foster greater ecological awareness and buy-in for |
| | | |conservation. |
| |Frog population decreases. |Low |INRENA’s and INIBICO’s monitoring would be able to detect this |
| | | |problem and determine preventive measures, such as stopping the|
| | | |harvest until the frog population recovers, reducing the |
| | | |harvest rate, studying external factors (pollution, diseases, |
| | | |etc.). |
|Technica|The project is unable to produce as many |Low |The project will retain Rainer Schulte full-time through |
|l |frogs as planned due to difficulties | |INIBICO and will utilize the consulting services of Mr. Don |
| |encountered in setting up the production, | |Nichols (Senior Veterinary Pathologist at the Washington Zoo) |
| |quarantine & transport systems. | |as needed. |
|Manageri|Curmi and INIBICO are not able to work |Med |A detailed agreement will be established between Curmi and |
|al |together effectively. As a result, the frog| |INIBICO which spells out the roles for each organization. |
| |export venture becomes poorly managed. | |There will be close communication and oversight in order to |
| | | |foster & maintain mutual understanding and support. |
|Commerci|Other non sustainable crops (i.e. coca) |Low |At this moment, there are no legal crops that can compete with |
|al |become economically more profitable than | |poison dart frogs production. Campesinos don’t want to get |
| |poison dart frogs. | |involved with illegal crops if they have an alternative. |
| |There is not enough revenue to sustain |Low-Med |Expenses at the collection centers will be kept low. |
| |collection centers, a key component of this | |Additional income will be obtained from tourists and visitors. |
| |enterprise. | | |
| |Market saturation via new sources of supply |Med |Fortunately, it will be difficult for hobbyists to breed many |
| |(either new exporters from other tropical | |of the Peruvian species in captivity. Nonetheless, the project|
| |countries or enterprises that breed the | |will gradually release new species so as to have new products |
| |Peruvian species in captivity) leads to a | |in the market each year. Quantities to be exported will be |
| |decrease in demand, and prices fall. | |carefully studied and managed. The project will also seek to |
| | | |ensure that any new exporters from other tropical countries |
| | | |coordinate production and do not compete on price. |
| |Importers and local distributors charge high|Low-Med |Prices will be transparent, and the project will work with |
| |commissions and make high profits; | |different international distributors. |
| |campesinos have a very low income in return.| | |
Stakeholder Identification
The project’s main stakeholders include INIBICO, Curmi, ASPRAVEP and other producers’ organizations, and INRENA.
Instituto de Investigación de la Biología de las Cordilleras Orientales (Institute for Research into the Biology of the Eastern Andes, or INIBICO) is an NGO devoted to the study and preservation of the flora and fauna in northern Peru’s high rainforest. INIBICO’s technical manager in the branch of herpetofauna, Dipl. Biol. Rainer Schulte is the world’s foremost expert in the biology and management of Peruvian and other poison dart frogs. He has been conducting amphibian research in Peru and other countries for over 20 years. Mr. Schulte developed the sustainable breeding methods used in this project, and has published several books and many articles on poison dart frogs. INIBICO's membership include three orchid specialists, an ethnobotanist (medicinal plants), an agroindustrial engineer (processing of new plant products), an agricultural engineer (natural pest control for rice, coffee and corn cultures), and a Swiss butterfly specialist.
INIBICO will be responsible for the technical aspects of the project, including the design of the collection centers, the initial training and set-up for the ZIRA methods, biodiversity monitoring, and research into new NTFPs.
The frog export venture will receive accounting, financial management and marketing support from Curmi, a Peruvian NGO with a track record as a successful incubator of local “green” businesses. In the areas where the frog project will take place, Curmi has promoted agricultural projects to replace slash-and-burn agriculture with permanent crops such as cocoa and pijuayo’ (hearts of palm). Curmi successfully managed the creation of local plants to process hearts of palm and cocoaing plants xxwhat product is processed? whose products are for sale sold in national and international markets. Curmi has also executed educational projects, such as the founding of an agricultural school in Sisa. with an agricultural institute in Sisa as the main example. Xx need just a bit more detail on this institute - what does it teach, and to whom?Oriented to poor rural students aged 12-18 who coemcome from an area that suffers severe deforestation and soil loss, the school teaches sustainable agriculture and basic agroindustrial processes.
Mr. Schulte helped found ASPRAVEP[23], a Peruvian poison dart frog breeding NGO involved in the campesino training and frog breeding pilot that led to this proposal. ASPRAVEP members have already been trained by INIBICO; they have been participating in the pilot for three years now, at their own risk and expense. The organization has 22 members and is located in the Caynarachi Valley, close to Tarapoto. Figure 8 shows Sam Keller (IFC Projects Officer) meeting with with Mr. Adelino Pérez (ASPRAVEP’s President) during the preparation of this proposal.
ASPRAVEP members have also taken part in a participatory social assessment. Findings from the appraisal indicate that campesinos are interested in using project revenues for community projects, such as rural electrification. Similar social assessments and consultations will be undertaken in other areas where sustainable frog production is planned.
The Instituto Nacional de Recursos Naturales (INRENA, the National Natural Resources Institute), promotes the conservation and sustainable use of natural resources, as mandated by the Law of Forestry and Fauna. In April 2002, INRENA formally decided to support and be involved in the project. After INRENA issues the export permits, the project will provide training to officials of the Customs Agency.
Community Participation
The project has developed a promising approach to distribute the benefits from frog sales within each participating community. In designing the income distribution plan, the sponsors have tried to avoid having a few campesinos within a given community have a high income from frog sales while many other community members go without any income from the project. Although such an approach would have been easier from a technical and economic point of view (because it would allow the project to work with a smaller number of people), it would offer fewer social and ecological benefits. Instead, based on the total estimated income that could be generated from frog sales in each community, the sponsor will try to involve as many campesinos as possible, such that each campesino obtains at least a basic salary. The project’s goal is to employ at least 250 families by Year 3.[24]
For example, suppose that in Valley A there are two expensive frog species. The total monthly income would be 50 frogs x US$25 = US$1,250. A single campesino could produce those 50 frogs, but such a high income would distort community relationships and would mean almost no alleviation of poverty or forest protection. But if those 50 frogs were produced and sold by 10 families, that would allow for a US$125 cash income per family. The current average monthly cash income in the rural areas where the project will operate ranges from US$20 to US$50. But this is an average. Most of the income comes when the corn harvest is sold, and there is almost no income for most of the year. The project’s goal is to raise the average cash income from such low amounts to at least the basic salary in Peru, US$115. (This salary might look low, but in rural areas, where families are almost self-sufficient in food, own their home, and have low expenses, this amount can go a long way in paying for clothing, medicines, or school supplies.)
If the total income to be generated from the project increases considerably over the long term, more campesinos could be incorporated in the frog producer associations. A second option for dealing with increased income is to place the surplus into a Community Development Fund. This fund would come from a percentage of frog sales. Each association would decide upon the use of the funds and would regulate them according to their association’s statutes. Different communities have different needs. The funds would not be used for political or religious purposes.
The project will utilize appropriate methods for selecting participants. In the Alto Cainarache Valley, the participants have been identified for several years because of the pilot project. In other areas, an important criteria for selecting participants will be land ownership because the project will need to involve those who own/occupy the forested sections of land where the frogs live. After considering issues of land ownership, the project will consider utilizing a meritocracy/competition system or a lottery system, depending on the results of the baseline social assessments in each area.
Finally, the project will implement several measures to reduce tensions that may arise between individuals who are selected for participation and those who are not. First of all, tensions will be minimized by allowing each community to participate in determining how to select participants. Second, the project will ensure that it provides some benefits to the communities as a whole. For instance, some business profits will go towards conservation-compatible community development projects, to be determined in conjunction with the communities. As another example, the project will train and hire individuals who are not selected for participation in the frog production activities in order for them to work as conservation specialists. Beyond that, the project will seek to demonstrate to participating communities that frog production is merely a first step towards a broader range of sustainable NTFP production that will involve more community-members.
Incremental Cost Assessment
In the Baseline Scenario, INIBICO would continue implementing the pilot project with minimal funding (approx. $20,000 over the next few years, provided mainly via Rainer Shulte). INIBICO would not be able to begin exporting frogs due to a lack of financing and business support. In addition, there would be a serious risk that the pilot project would eventually collapse, because the participating campesinos would most likely lose interest after it became clear that they would not be able to earn income from frog breeding.
In contrast, the GEF Alternative would allow a viable frog export business to be established; GEF would help capitalize the business and fund Curmi to provide business incubation services. The GEF Alternative would also enable incremental activities around land protection, which would provide additional globally significant conservation benefits. The incremental cost to the GEF to achieve the globally-significant benefits inherent in this proposal is US$788,540[25]. However, some of these funds will be utilized in a non-grant modality (i.e., equity).[26] Although it may be difficult for IFC to sell its shares to a strategic partner, there is a possibility for GEF to receive a financial return from this project.
Furthermore, the GEF Alternative has catalyzed significant co-funding, and would continue to do so. During the project preparation process, Jan Post (a recently-retired World Bank biologist who initially spearheaded the development of this proposal) won $95,000 for the project from the World Bank’s “Innovation in the Marketplace” competition.[27] In Peru, Curmi has received a reasonable indication that the Caja Rural will provide a working capital loan for the frog export business once it is established. Campesinos have agreed to contribute in-kind labor. INRENA has agreed to allocate some staff time to monitoring the project’s sustainability. INIBICO’s scientists have agreed to contribute time on biodiversity monitoring and NTFP research. U.S. and European distributors, eager to increase their profits from frog sales, have agreed to contribute co-funding in the form of advertisements for our frogs.[28] Finally, in the GEF Alternative, there will be co-funding generated by the frog business itself: while revenues will be used to cover critical operating expenses, the shareholders have agreed to allocate all profits toward forest preservation and poverty alleviation.
The budget, in the section below, shows the level of co-funding expected from different parties. Although appropriate indications of commitment have been obtained from the various parties, most of the co-funding will be contributed over the course of the project as it is needed (except for the Marketplace funds, which are already available).
Budget
| |Mkt |Export |INIBICO |CURMI |Frog |Distribu- |INRENA |GEF |TOTAL |
| |Place |Business | | |Producers |tors | | | |
|start-up support |0 |0 |0 |0 |0 |0 |0 |4,088 |4,088 |
|review of quarterly reports |0 |0 |0 |0 |0 |0 |0 |8,175 |8,175 |
|ongoing support |0 |0 |0 |0 |0 |0 |0 |31,883 |31,883 |
| | | | | | | | | | |
|Field breeding stations equipment, set-up and operation |20,100 |0 |0 |0 |186,264 |0 |0 |85,237 |291,601 |
| | | | | | | | | | |
|Collection centers infrastructure, equipment and operation |0 |252,140 |0 |308,175 |0 |0 |0 |120,995 |681,310 |
|Collection centers infrastructure: Building and installations|0 |0 |0 |0 |0 |0 |0 |74,620 |74,620 |
|Collection centers equipment and vehicles |0 |0 |0 |0 |0 |0 |0 |39,000 |39,000 |
|Collection centers operation |0 |236,731 |0 |0 |0 |0 |0 |7,375 |244,106 |
|Working capital |0 |15,409 |0 |308,175 |0 |0 |0 |0 |323,584 |
| | | | | | | | | | |
| Market development and international media promotion |30,000 |0 |0 |0 |0 |45,000 |0 |62,405 |137,405 |
|Education and Outreach | | | | | | | | | |
|Organization of campesinos in producers' associations |3,900 |0 |0 |0 |0 |0 |0 |7,000 |10,900 |
|Training events and materials |0 |0 |0 |0 |0 |0 |0 |14,810 |14,810 |
|Ongoing technical assistance |2,000 |0 |0 |0 |0 |0 |0 |59,696 |61,696 |
|Producers capacity building and leadership education |0 |0 |0 |0 |0 |0 |0 |10,000 |10,000 |
| | | | | | | | | | |
|Educational outreach in Peru |0 |0 |0 |0 |0 |0 |5,000 |26,620 |31,620 |
| | | | | | | | | | |
|Training for INRENA and customs officials |0 |0 |0 |0 |0 |0 |10,880 |13,310 |24,190 |
|Complem. Strategies for Forest Preserv. | | | | | | | | | |
|Campesino organizing for deforestation prevention |0 |0 |0 |0 |0 |0 |0 |14,715 |14,715 |
|Rangers/cooperation with ongoing land preservation efforts |0 |20,592 |0 |0 |0 |0 |0 |0 |20,592 |
| | | | | | | | | | |
|Support to international partnerships for INIBICO's |0 |0 |0 |0 |0 |0 |0 |20,000 |20,000 |
|ecotourism / frog tourism offerings | | | | | | | | | |
| | | | | | | | | | |
|Sustainable farming |0 |0 |0 |0 |0 |0 |0 |8,829 |8,829 |
|Replication | | | | | | | | | |
|Commercial or conservation-related replication in other |5,000 |0 |0 |0 |0 |0 |0 |47,630 |52,630 |
|countries | | | | | | | | | |
|Replication with other species of frogs |18,000 |0 |0 |0 |0 |0 |0 |4,905 |22,905 |
|Monitoring and Evaluation | | | | | | | | | |
| | | | | | | | | | |
|Inventory of frogs and related biodiversity resources |16,000 |0 |20,000 |0 |0 |0 |0 |26,715 |62,715 |
|Project Management and Administration |0 |0 |0 |43,200 |0 |0 |0 |134,642 |177,842 |
|TOTAL |95,000 |272,732 |26,131 |351,375 |186,264 |45,000 |55,880 |788,540* |1,820,922 |
*This is above and beyond the US$25,000 in PDF-A funds.
Monitoring and Evaluation Plan
The project sponsors and IFC have established a sophisticated monitoring and evaluation plan, which will be further refined during the first stage of implementation. A basic summary is provided below (and a more detailed overview can be found in Annex 5).
Monitoring:
A comprehensive set of indicators has been established to measure the project’s effectiveness in implementing each set of activities and achieving each expected outcome. These indicators can be found in the log frame at the front of this document and in the M&E Summary in Annex 5. For straightforward indicators (e.g., the number of people trained), Curmi will simply report progress in their quarterly reports to IFC. Participating campesinos will also help to monitor certain indicators, such as the occurrence of frog smuggling. For more complicate indicators, the project will engage an external organization (such as World Wildlife Fund, Conservation International, or some other group with appropriate skills and commitment). Specifically, the project will utilize an external environmental specialist (EES) and an external social specialist (ESS). The external parties will be selected and contracted at the start of project implementation in order to obtain rigorous baseline data. In addition, INIBICO will establish control plots to compare harvested vs. non-harvested sites. Doing so will ensure that the project does not adversely affect frog population dynamics or other aspects of forest ecology. At the start of project implementation, INIBICO will establish a detailed plan for carrying out this work, including specific indicators and monitoring protocols.
Evaluation:
Although monitoring will be done partly by project implementors, formal evaluations will be done by a third party in Peru. The formal evaluations will be done at Year 1, Year 3, and Year 5. The evaluation at Year 1 will emphasize process and will be designed to give feedback to the implementation team; it will also be a dry run of the impact evaluation. The evaluation at year 3 will emphasize impacts, and will also draw lessons on the most effective processes. Finally, the evaluation at Year 5 (two years after the end of the project) will examine the extent to which the project achieved sustained impacts.
Although the M&E plan has been designed to answer many specific questions about the project, in the broadest sense it will seek to address the following key issues: (i) the extent to which frog production is underway and operating well from a social, environmental, and economic/financial perspective; and (ii) the extent to which the project’s land preservation strategies are working effectively from a social and environmental perspective.
The project has crafted a cost-effective approach for achieving its M&E plan. It will control costs by allowing the implementation team to gather much of the monitoring data (as opposed to relying on an outside contractor). And it will contract a Peruvian NGO to conduct the external evaluations in an affordable manner. The project budget includes $40,000 in GEF funding for this external contract. There is also in-kind co-funding from INRENA. Finally, the project has allocated over $62,000 to monitor the biological effects of the frog ranching activities.
Annex 1: Globally-Significant Conservation Benefits
|Year |Collection Center |Production Lot Ranges |# of Production Lots |
| |Implementation | | |
|Dendrobates auratus** |20 |100 |60 |
|Dendrobates azureus |50 |120 |85 |
|Dendrobates tinctorius** |25 |125 |75 |
|Dendrobates imitator* |35 |55 |45 |
|Dendrobates intermedius* |85 |125 |105 |
|Dendrobates fantasticus* |100 |150 |125 |
|Dendrobates lamasi* |100 |150 |125 |
|Dendrobates ventrimaculatus* |30 |70 |50 |
|Dendrobates leucomelas |18 |60 |39 |
|Dendrobates variabilis* |60 |80 |70 |
|Epipedobates tricolor |20 |40 |30 |
|Epipedobates hahneli* |35 |55 |45 |
|Epipedobates silverstonei* |120 |200 |160 |
|Epipedobates trivittatus |35 |100 |67.50 |
|Phyllobates bicolor |15 |60 |37.50 |
|Phyllobates terribilis |30 |200 |115 |
|Phyllobates aurotaenia |15 |35 |25 |
|Phyllobates vittatus |30 |50 |40 |
*-Denotes native Peruvian species
** Includes a range of variants, sizes and ages as well as wild caught imports and captive born animals
Factors that affect prices are: Availability, Rarity, Aesthetics, Behavior and Production Costs. New varieties will demand the highest prices and to prevent market saturation and any resulting effects on price, the quantities of these will be carefully monitored and controlled. Decisions on which species to offer at very low prices (for Pet Store Chain or other venture) should be made on a case by case basis at a later date.
Current Competition and Market Leaders
Currently there is little to no competition for Dendrobatid species from Peru because these are simply not in cultivation at this time. Smuggled animals turn in up Europe and the US but it often takes years before they are successfully bred and traded. Between 1995 and 2000, there were only 1,462 frogs reported to be exported from Peru and only 926 reported imported to the United States. 1,462 frogs represent only 2% of the total frogs traded worldwide, a comparatively small share of the market. 1999-2001 yielded a total of 15,517 frogs imported in the US from all countries, a significant increase. Peruvian species accounted for only 6.3% of the total and only 4.6% were actually exported from Peru. There were no imports directly from Peru in 2001.
Currently, about ten top breeders of Dendrobatid frogs in the United States breed and distribute more than 200 frogs each per year. These breeders are distributed across the United States and some could potentially be contacted as sub-distributors. Most of these breeders have been interviewed and expressed support for the Peru Project:
Table 7: Major U.S. Poison Dart Frog Breeders
|Sean Stewart |Patrick Nabors |Incredible Pets |
|Marcus Breece |Aaron Hanzlink |Under the Canopy Farms |
|Black Jungle |Araknaculture |Bill Schwinn |
|Reptile Specialties |Glades | |
Peruvian Poison Dart Frogs Market Advantages
•Species diversity
•Healthy, captive raised juvenile frogs
•Genetically equal to wild caught
•Produced without affecting original habitats
Market Demand
Currently, the hobby has evolved and the demand for “thumbnail” species is higher than ever before. Over 80% of the frogs fall into this category. In addition, the hobby is saturated with species from other South American countries, namely Suriname. The hobby is looking for “thumbnail” species as well as new any new species to work with. The interest and demand for legal species with locale data that are new to the hobby is at an all time high. Annually, it appears that the market will support the numbers in the table below.
Table 8: Annual Viable Sales Figures
| |USA |Europe |Japan |
|Class A |600 |1,200 |300 |
|Class B |600 |1,200 |300 |
|Class C |1,200 |2,400 |600 |
| |2,400 |4,800 |1,200 |
Class A: High difficulty and extremely rare species (such as D. sirensis)
Class B: Medium difficulty species (such as D. fantasticus)
Class C: Common or easy to produce species (such as D. imitator)
Marketing and Selling Strategy
Controlling the market of these animals from the distribution side will be accomplished by the slow and carefully managed introduction of new species annually and the rotation of many species through the market cycle at a specific time interval. There are two ways to prevent over saturation and keep interest high:
• Limit the number of frogs per species/variant imported
• Limit the number of species/variant made available
Since 1983, approximately 150 species and variants of Dendrobatid frogs have sustained the hobby. There are at least 70 morphs available from Peru over the next decade. For instance, introduction of 10 new species/variants per year would allow 7 years of production and marketing without repeating the cycle. At this stage it is important to identify ways to maintain high demand for our product rather than specifying a particular plan.
Annex 4: Focal Point Endorsement
[pic]
Annex 5: Summary of Monitoring & Evaluation Plan
| | |Process Monitoring |Process Evaluation |Impact Monitoring & Evaluation |
|Business Development |Indicators |Who |Frequency |Instrument |Who |When |Who |Frequency |Post- |
| | | | | | | | | |Project** |
|Field breeding stations equipment, set-up and |# of breeding lots set up |INRENA |6 mos | |EES/ESS |Yr 1&3 |EES/ESS |6 months |yes |
|operation | | | | | | | | | |
|Collection centers infrastructure, equipment |# of collection centers operating in year 3 |EES/INIBICO |6 mos | |EES/ESS |Yr 1&3 |EES/ESS |6 months |yes |
|and operation | | | | | | | | | |
| Market development and international media |Increase in market sales as compared to market |Curmi & distr. |annual |quart. reports |IFC |Yr 1&3 |too costly |- |no |
|promotion |study | | | | | | | | |
|Education and Outreach | | | | | | | | | |
|Educational outreach in Peru | | | |quart. reports | | | | | |
|Education for schoolchildren |# of schoolchildren instructed |Curmi |quarterly |quart. reports |too costly |too costly |- |no |
|Community educational program |# of adults trained & their feedback |Curmi |quarterly |quart. reports |too costly |too costly |- |no |
|Cooperation with university researchers |# of academics participating in joint seminars |INIBICO |quarterly |quart. reports |too costly |too costly |- |no |
| |or research | | | | | | | |
|Training for local and national INRENA |# of INRENA staff trained & their feedback |Curmi |quarterly |quart. reports |INRENA |Yr 1&3 |INRENA |6 months |yes |
|officials on sust frog production methods | | | | | | | | | |
|Capacity building for customs officials |# of officials trained |Curmi |quarterly |quart. reports |INRENA |Yr 1&3 |INRENA |6 months |yes |
|Complem. Strategies for Conservat. | | | | | | | | | |
|Campesino organizing for deforestation |# of campesinos participating in community |ESS/EES |6 mos |internal data |EES/ESS |Yr 1&3 |EES/ESS |6 months |yes |
|prevention |forest vigilance efforts. | | | | | | | | |
|Rangers/cooperation with ongoing land |# of rangers employed via frog business revenues|EES |6 mos |internal data |EES/ESS |Yr 1&3 |EES/ESS |6 months |yes |
|preservation efforts | | | | | | | | | |
|Support to international partnerships for |# of annual foreign frog- or nature-tourists |Curmi |6 mos |internal data |IFC |Yr 1&3 |EES/ESS |6 months |yes |
|INIBICO's current ecotourism offerings |visiting project facilities & sites | | | | | | | | |
|Sustainable farming |# of campesinos who abandon slash and burn |ESS/EES |6 mos |interviews |EES/ESS |Yr 1&3 |EES/ESS |Yr 1&3 |yes |
| |practices | | | | | | | | |
|Poverty Alleviation | | | | | | | | | |
|Replication | | | | | | | | | |
|Commercial or conservation-related replication |# of new countries using ZIRA method for frog |Curmi |6 mos |Biannual reports |EES/ESS |Yr 1&3 |too costly |- |no |
|in other countries |businesses or conservation | | | | | | | | |
|Replication with other species of frogs |# of new species exported |Curmi |6 mos |Biannual reports |EES/ESS |Yr 1&3 |too costly |- |no |
|*EES = External Environmental Specialist *ESS = External Social Specialist |
|**The post-project impact evaluation will be conducted two years after the end of IFC's involvement to gauge the sustained impacts of the project |
-----------------------
[1] Epipedobates and dendrobates are listed on Appendix II of the Convention on International Trade in Endangered Species (CITES). This means that international trade in these species is permissible under CITES if it is sustainably managed. CITES officials are strongly supportive of this project because it will alleviate pressure on poison dart frog populations.
[2] In this proposal, “frog” will refer to Epipedobates and Dendrobates,unless otherwise specified.
[3] The project will only allow for the export of juveniles and will promote legislation to this effect to combat the illegal export of wild caught poison dart frogs, as wild caught poison dart frogs are invariably adults that are caught when the males are calling. Juveniles, which are silent, are normally almost impossible to find.
[4] Therefore, as species become more common in the market, their price drops. The project’s marketing strategy will take this into account as it decides which species to export in a given year.
[5] Even though pharmaceutical companies use the frogs in their research for medicinal compounds, they do not constitute a significant market for our frogs. This is because the companies can obtain enough samples for years of research from just one animal.
[6] TPP= Tarapoto; IQT= Iquitos; PUC=Pucallpa; LIM= Lima. Because of the threat from frog smugglers, the map does not provide the specific location of each production lot, but shows instead the general area in which the lots will be located.
[7] Issued by INRENA, Diversidad Biológica del Perú is an authoritative guide to Peruvian sites of high conservation priority as well as high deforestation risk. The areas are identified and selected based on Rapid Assessment Project (RAP) surveys and faunal listings.
[8] An area may be both a “hot spot” and a “white spot.” An area may be designated as a “hot spot” for a particular category of flora or fauna if there is sufficient data to indicate that the area possesses significant biological diversity for that particular category. At the same time, an area may be designated as a “white spot” for some other type of flora or fauna if data is severely lacking for it. For example, an area could be a “hot spot” for birds but a “white spot” for reptiles.
[9] This is a term used by zoologists to describe animals, such as tigers or elephants, that strongly draw people’s attention.
[10] INRENA will provide export permits for the frogs that this project produces sustainably.
[11] D.fantasticus, D. intermedius, D. reticulatus, D. amazonicus, D. duellmani, E.caynarachi, D. lamasi and D. imitator.
[12] Campesinos won’t be direct employees of the business, but will receive payment for frogs they will sell to the business. The business itself will employ 14 skilled (biologist) or semi-skilled (maintenance worker) staff.
[13] It should also be noted that the project’s international marketing efforts will aim to increase demand only for sustainably-produced frogs.
[14] Curmi will seek and evaluate candidates at the start of project implementation. All indications suggest that suitable candidates may be found within Tarapoto.
[15] No GEF funds will be used to fund distributors in developed countries; in fact, the opposite is true: distributors will provide funding for equipment purchases and market development activities.
[16] It will be important to expand the market for sustainably-produced Peruvian frogs in order to maintain high prices. These marketing activities will carefully avoid augmenting demand for other types of frogs, especially those that are smuggled.
[17] INIBICO has been on close contact with INRENA during the project preparation process in order to execute the necessary steps for INRENA to issue export permits. Specifically, INIBICO has prepared a Management Plan for the frog production lots that will be utilized during the first stage of implementation. INIBICO has also prepared an Annual Operational Plan for these frog production lots. In April 2003, several INRENA officials are going to visit the frog production lots near Tarapoto to assess the Management Plan and Annual Operational Plan. They have indicated that – as long as their inspection confirms that the Management Plan and Annual Operational Plan are appropriate – then INRENA will be able to issue initial export permits. These permits will allow the project to begin making pilot shipments of frogs. Detailed arrangements have already been established for INRENA to oversee these pilot shipments in conjunction with INIBICO and Curmi. For instance, INRENA will be notified when frogs are transported from the production lots to the Collection Center in Tarapoto, and when frogs are shipped from Tarapoto to Lima. INRENA officials will review a preagreed set of papers and then provide permits for the frogs to be sent abroad. INRENA will also work in conjunction with Customs officials to facilitate these pilot shipments. Although only a few INRENA and Customs officials will be able to carry out these functions initially, over time the project will train a substantial number of INRENA and Customs officials.
[18] Each conservation specialist is expected to cost approximately US$1,716 per year; thus, the frog venture will ultimately pay about US$10, 296 each year for six conservation specialists.
[19] This agricultural activity will be held in land that is already deforested or agricultural, never in primary forest.
[20] Phillomedusa bicolor are also known as monkey frogs: these frogs don’t jump; instead, they climb up branches - or people’s hands - in a monkey-like fashion.
[21] All profits will be dedicated towards forest conservation and conservation-compatible community development; no dividends will be paid to shareholders during the project.
[22] In 1998, the Peruvian government created a tax exemption to promote the development of the Amazon region (Ley de Promoción de Inversiones en la Amazonía). It is not certain that the present government will keep this law, but if so, the company will not have to pay income taxes.
[23] ASPRAVEP is a Spanish acronym for Association of Producers of Poison Dart Frogs in Peru.
[24] The frog export venture will seek to pay the campesinos as much as possible while maintaining its own financial sustainability. It is expected that the frog export venture will be able to pay campesinos between 30-60% of total revenues; however, the specific amount or percentage of revenues to be paid to the campesinos will evolve over time as market conditions change (i.e., retail prices, transportation costs, etc).
[25] This is above and beyond that US$25,000 in PDF-A funds.
[26] GEF resources have been used as equity in the IFC/GEF Photovoltaic Market Transformation Initiative (PVMTI) and the IFC/GEF Small and Medium Enterprise (SME) Program.
[27] Some of the Development Marketplace funds have been used during the PDF-A process, and some will be spent in coming months. In either case, these funds clearly qualify as co-financing.
[28] U.S. distribution will be handled by Mr. Sean Stewart and Mr. Ron Gagliardo, two of the most reputable breeders/traders in the country. They have agreed to invest over $20,000 as part of this project. In Europe, many organizations are eager to be selected as a distributor for this project and have agreed to invest substantially in market development if chosen. IFC and the project sponsor will select one of these organizations during the first stage of project implementation. This co-financing is not premised on revenue streams; rather, it is an upfront commitment on the part of the distributors to invest cash in market development.
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Figure 7: IFC & ASPRAVEP Meeting
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Figure 6: Deforestation in Alto Cainarache Valley
Figure 5: Recent Deforestation of Rare Frog Habitat
Figure 4: Geographic Scope of Frog Production Areas
Figure 8: Hobbyist with terrarium
Figure 2: Frog Breeding Vessel
Figure 1: Male frog with tadpoles
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