Pasture instead of rubber - SEDAC



Pasture instead of rubber? The ranching tendencies of family-based agriculture in extractive reserves and colonization projects in Acre, Brazil, Southwestern Amazonia

F. Kennedy Souza,

Federal University of Acre. Economics Departament. Sector of Land use and Global Change Studies. Campus Universitário, BR 364 Km 04, Distrito Industrial, Rio Branco-Acre-Brazil, CEP: 69.909-670, sakf@.br

Abstract

Family-based agriculture is a reality that must be incorporated into regional development proposals for Amazonia. Impacts on regional ecosystems are dependent on the land use practices of this population and the economic viability of these practices. Southwestern Amazonia combines ecological diversity and complex social structures with changing land and forest use that includes extractivism and cattle ranching. In this region, family-based agriculture is concentrated in multiple-use areas, such as extractive reserves, and in colonization projects. A fundamental step in reducing the current deforestation trends is identifying the role of economic drivers and proposing alternative sources of income. Analytical studies of rural family-based economies of the eastern region of the State of Acre were conducted using a sample of 330 families in the Chico Mendes Extractive Reserve, extractive settlements, and agricultural colonization projects. Results show that the available work force for an extractivist family is 3.5 persons/day with a median age of 30 years. Rubber extraction is practiced by 85% of the families, harvesting Brazil nuts is practiced by 63%, and animal husbandry by 23%. The relative gross income produced from Brazil nut and rubber extraction is 41%. The result of benefit/cost analysis of this system is 0.81, less than the break-even value. The families must use all of their gross income to purchase market products. Extractive activities are economically inefficient due to the low prices of rubber and Brazil nuts and also due to the low productivity of families whose principal cost is manual labor at 51% of gross income. Of the families sampled in the Chico Mendes Reserve, 62% have cattle. The observed tendency of more well-to-do families is to intensify the number of livestock on their properties. In the agricultural system, common in colonization projects, manual labor declines to 2.7 persons/day and the median age rises to 35 years. Animal husbandry accounted for 62% of income with cattle producing a third of total income. The cost/benefit relationship of this system is superior to that of systems with less intensive numbers of livestock at 0.98, with only 60% of the gross production destined for purchasing market goods. The principal cost of the families is fixed capital, illustrating the investment power of the family unit. These results suggest that the economic improvement of extractive families is occurring simultaneously with the increase of deforestation for pasture. To improve the economic situation of extractivist families, alternative technologies to improve the economic return of current non-timber forest products should be combined with the incorporation of new extractive products. Without such changes, the scenario for extractive families will be intensification of livestock production. During the next decade, livestock will be the principle alternative for family units involved in colonization projects and extractive reserves, unless global and national societies pay these families for the ecological services associated with maintenance of these forests.

Keywords: Land-use economic analysis, Agricultural in Amazon, extractivism and cattle in Amazon.

Introduction

Southwestern Amazonia is a region with relatively low deforestation rates, a large presence of indigenous communities, rubber tappers and river dwellers, a predominantly primary economy, and a great wealth of biodiversity. Acre State lies at the center of this Amazonian region and has served as a site for several social experiments, including extractive reserves -- multiple use areas where traditional communities have usufruct rights to the forest and land. The current state government has elected as its slogan " Government of the Forest" and has instituted major programs for developing non-timber forest products which are to serve as a lever for sustainable development in the region. In this context, it is urgent to have studies that indicate how small family producers function in these rural regions.

The goal of this paper is to help indicate the limits and opportunities facing small family producers in eastern Acre State, and how they are responding to current economic incentives. The basis of this work is a microeconomic study of extractivists and agriculturists in this region in the period of 1997 to 1998, before the current state government began its incentive programs.

Study Region

This research was done in the Acre River Basin, that included, in 2000, 70% of the population of the State. Of this total, only 25% was in a rural zone (IBGE, 2000). The study sample was composed of 330 families distributed in accord with the forms of land use present in this region, grouped in designated units: the Chico Mendes Extractive Reserve with approximately 970,000 hectares; 8 projects of established agro-extractivists, with an area of 193,000 hectares; and 33 colonization projects, that totaled approximately 1,000,000 hectares in all (Fig. 1)

Metodology

The economic analysis process quantifies the inputs (production factors) and the outputs (products or results) of each form of production. The indicators used - gross income, profit, and benefit-cost ratio -- have the following definitions.

Gross Income (GI): This is the result of effectively selling a product in the market, acting as an indicator of the scale of production

GI = Qm . pp ,

where

GI = gross income

Qm = qv + qe

Qm=quantity of the product destined for the market

qv=quantity of the product sold

qe=quantity produced previous years and sold

qp=unit price of the product

Total Cost (Tc): corresponds to the total monetary value spent by the producer to obtain this product. This is derived by summing two components: the variable cost (Vc) and the fixed costs which can be divided into two components; the specific fixed cost (eFC) and the common fixed cost (CFC).

In the production process, the families use a determined quantity i of products, each of which is the result of a specific monetary value of variable capital that varies in accordance with the volume of production. The total fixed cost is distributed between values that correspond to the determined product i. One component is the specific fixed cost for a determined product and the other is the common cost of i products, called the fixed common cost.

Where:

TC = Total Production Cost; VC = Variable Production Cost of products i; eFc = Specific Fixed Cost; CFc = Common Fixed Cost

Gain(G): corresponds to the total generated gross income available for the producer after the total costs are paid. This includes the equivalent value of the opportunity cost of the utilized factors. However, the cost does not include the value of the family's work. This indicator of efficiency, which shows the potential of the continued economic viability of the family unit in the time, was obtained with the formula described below.

G = GI - TC ,

when:

G = gain; GI = gross income; TC = total cost

Cost/Benefit Relationship (R): is an indicator of the capacity of the family producer to generate value per unit of cost. This allows verification of the possibility of obtaining a gain and consequently accumulation. The calculated formula is given with the following formula:

R = GI/TC ,

In accordance with the obtained results, we observe three specific situations:

R > 1, a situation where there is a gain

R < 1, a situation where there is a loss

R = 1, a situation in equilibrium.

Based on the results of these indicators, the level of economic efficiency of the family production units are analyzed in accordance with deforestation. For this, there are observations on the evolution of an area with anthropological activity in extractivist economies, in the Chico Mendes Extractive Reserve, and in families focusing their economic activity in agriculture and livestock, located in the colonization project Pedro Peixoto, the oldest and largest in Acre.

Rubber: environmentally sustainable but economically unsustainable

The state of Acre, situated in the extreme west of Amazonia has been an important area in the production of rubber for Amazonia. During the period of 1969 to 1995, its contribution to the national product fell from 32% to 4%. (Anuário Estatístico do Mercada da Borracha, 1986-1995). The conventional process of economic extractivism is characterized by a low productivity and an elevated production cost in the system of family production. For example, to produce 600kg of raw rubber in a year, a rubber tapper needs to carry out the following process: once a year, he needs to clear a road, absorbing 20 days of the year. Every three years, he must construct a kiln (defumadeira), a process that requires 20 days of work. For the extraction of latex, he must delimit an area, cutting the local trees. Later, return to collect the latex, performing this until the final day when he defumes the colhido liquid, finishing his rubber tapping day, only to repeat this 195 days of the year (CNS, 1993, 1994).

To produce 600 kg of rubber per year, a rubber tapper must do the following activities: once a year he must clear the rubber trails, something that takes about 20 work days, every three years, he must build a kiln to smoke the rubber, a construction that takes about 20 work days. To extract the latex a rubber tapper walks kilometers along the rubber trails, cutting the trees, then repeating the same trail to collect the latex. At the end of the day he must then smoke the latex. This daily pattern is repeated for 195 days a year (CNS 1993, 1994).

Factors that affect the viability of the Amazonian rubber economy are: low spatial density of trees; low productivity, finite stock, elasticity and difficulty in extraction, that limit the possibility of mechanizing the collection and transport of the local extractivist; and poor living conditions for the extractivists (Homma, 1989).

These factors contribute to the propensity of extractivist families in Amazonia to decrease extractivist production and move towards agriculture or small animal production, and cattle ranching. During the period between 1995 and 1998, all extractive reserves in Amazonia had an increase in the number of dwellings dedicated to subsistence agriculture. The Chico Mendes Reserve, located in the state of Acre, showed a mean increase of 6% in the number of families growing annual crops and a decrease of 8% in families extracting seringa during these same years (Projecto Resex, 2000).

In spite of the economic rational for searching for better extractive products to increase the family income, the results of diversification were not effective because the productivity of exploiting these products (with the exception of Brazil nuts) declined in this period. The açai fruit in 1995 had a mean production of 240 kg/family/year which declined to 110kg/family/year in 1998. The production of açai palm heart fell 50% from 1995 (13 heads/family/year) to 1998. Brazil nut production, on the other hand, increased in the same period with production going from 800kg/family/year to 1290 kg/family/year (Project Resex, 2000). Two aspects should be observed as part of these results. The first is that a better market for extractive products would directly induce the families to explore traditional forest products if there was already an established market.

The second aspect is that because insufficient income is generated with new product exploration up to 1998, families go in the direction of subsistence crops and the predatory use of forest resources, such as the cutting of açai palms, diminishing further the density of species available for increasing the family income.

The presence of cattle in family units of the Chico Mendes Extractive Reserve increased considerably during the period between 1995 and 1998. The percentage went from 43% of households including cattle to 60%. Of this total, less than 2% of the proprietors commercialized this product (Project Resex, 2000). Cattle became capital to be used in case of an emergency. To complement the above discussion are data derived from the ASPF project (Analysis of Basic Systems of Rural Family Production of the Acre River Basin) available at the Economics Department of the Federal University of Acre. The ASPF project has the objective to analyze the economic performance of family production in this part of the state of Acre.

In extractive areas of the region, the results show that rubber and Brazil nuts, continued to be the principal products in the family economy, and were commercialized for 85 and 63% of the production units, respectively. This indicated a low diversity of forest use and a great vulnerability of flooding the market demand for these products. However, the agriculture and livestock products also play an important part in the production units (Table 1).

Brazil nuts and rubber are also the products that contributed the most to the gross product of the extractivist family, comprising 40% of their gross income. Annual crops comprised 35% of the family's gross product, most of which was generally used for consumption by the families. Cattle were responsible for 13% of the generated income in the extractivist system (Table 2).

However, when compared with the results presented in Levantamento Sócio-econômico das Reservas do Vale do Acre/Purus (1992) cited by Murrieta and Rueda (1995), a diminished importance of extractivist products is observed. Currently, the income generated for rubber and Brazil nuts sums 68% of the total income of the extractivist system, and small animals, including cattle represents 8.5%. The diversity of the system, represented in fruits, oils, resins and palmito was less efficient reaching only 1.2% of the total income.

The median gross income (GI) of extractivist families was R$1,600.00/year. However, the total cost (Tc) in the same period was 1,980.00/year (Fig. 2). In spite of the fact that the value of GI constitutes a monthly income suprerior to 70% of the urban population in the Northern region, when compared to CT, it is approximately 20% less than the total cost.. This is readily apparent with the result of the cost-benefit relationship (R) of 0.82, signifying that for each 100 units of income generated, approximately 120 units of cost are generated.

Among the units of extractivist production analyzed, 63% of them have benefit to cost ratios less than one, that is they are running at a loss (Fig. 3). As this trend continues, these families have to destroy their patrimonial wealth to control their growing debt. Thistrend encourages families to search for economic activities with lower costs and greater income-generating capacity. This illustrates that typical extractivist activities up to 1998 such as the rubber tapping are inefficient due to the low prices and elevated costs.

For families that have R < 1, in 1997-1998, their gross income was composed of extractivist products (principally rubber and Brazil nuts) corresponding to 48% of G­I, agriculture contributing 32% and animal rearing 20% (Fig. 3). On average, the income generated by these families was sufficient to cover only 60% of their costs.

The other group of extractivist producers, are those that obtained a gain in the considered period, in this case mean R was 1.7. That is, 37% of the properties had R>1. On average, the gross income (G­I) was 70% higher than the total costs (TC). This new situation of extractive products still plays an important part in the gross income with 35%, however agriculture was the most relevant part, at almost the same level of the extractive products with 37%. Animal raising, including cattle, raises this level 28%.

Comparing the two situations, the conclusions are that the economic options of extractive families to augment their income are to intensify activities that exert more pressure on the forest (agriculture and cattle/livestock) that have a capacity to cover the costs not covered by extractive activities. The situation is almost at equilibrium when the gross income is obtained through participation in all of the three product categories. Those family units in a R >1 situation of income more than costs, in long run, will represent an advance in the deforestation trends in extractive areas due to the major economic return of agriculture and cattle rearing compared to typical extractive activities.

As an example of the growing deforestation in extractive areas, we use the Chico Mendes Reserve, one of the primary reserves created in the state of Acre, with an area of approximately 976,000 hectares. Of this total, in 1986, 0.72% was deforested. Six years later, this area had grown to 1.54% , equivalent to 15,000 hectares. In 1998, the total deforested area was 2.9% (Fig. 4) (Sassagawa, 2000). Observations in this 12-year period showed that the linear rates of deforestation range from 0.14% yr-1 from 1986 to 1992 and 0.24% yr-1 . At the latest rate, the Chico Mendes Extractive Resource will reach its legal limit of 10% of deforested area within 30 years.

Considering the economic changes in the Chico Mendes Reserve, we see that in 1992, rubber corresponded to 45% of the gross income generated and Brazil nuts 25% (Murrieta & Rueda 1995). In 1998, the percent values of these products decreased to 21% and 26%, respectively. Animal raising started at 7.5% in 1992 and increased to 27%. The economical rational of extractivist producers is to move in the direction of activities that have less family labor, which are associated with 51% of the total costs in traditional extractivist production.

In this way, from the small return gained from extractive products, the families invest their manual labor and their meager available capital in activities with more immediate liquidity, principally cattle.

Cattle: economically sustainable but environmentally unsustainable

Cattle ranching in the state of Acre is practiced in the same way in the rest of the Amazon. Cattle ranching is the antithesis of extractivist activity, because it requires substitution of forests by grand expanses of pasture. In Acre, this economic activity is responsible for approximately 55% of the total deforested area due to human action (FUNTAC 1990). Therefore the settlements and subsistence crops of the many extractive communities represented, 11% of the total deforested area in 1990. In 1987, extractive activities corresponded to 87% of the total taxes generated in the primary sector of Acre state (FUNTAC, 1990).

In the 1970s and 1980s the implementation of major cattle ranching and colonization programs began the transformation of eastern Acre's land use. Many of the conflicts that arose in the region during this period were due to the confrontation between the two models of occupation: one, participating in colonization, agriculture and cattle-raising activities, and the other, typifying the history of the region, based on the exploitation of forest products.

The families in the colonization areas always had agriculture and cattle-ranching as their principal activities, using the large expanses of available land and the easily obtainable rural credit to help with production.

These characteristics appear in the results of the economic analysis of the rural families pertaining to the system of agricultural production. Agriculture and cattle ranching predominate as principal economic activities, and also include the use of fertilizers and insecticides. These activities also have the greatest impact on forest cover.

In the families researched, 62% of them had cattle raising as the property's economic activity, and poultry was an important product in almost 50% of the families (Table 1). Annual agricultural products were also important.

Analyzing the participation of products in the gross income (GI) of the families, we see that the raising of small animals and cattle was responsible for 64% of the GI generated between these units of production. Cattle and their by-products alone represented 56% of the gross income in this time period. Extractivist products (4%, half of which comes from timber harvesting) were a minor source of income (Table 2). .

The agricultural system relies on the importance of cattle as the principal product in the income of families. This reliance is partially explained through the lack of perspectives in agricultural production. From the 1980s, demand had increased for the principal annual crops (rice, beans, corn and manioc). This tendency continued until 1995, when agricultural production declined, following the same tendency as many other regions of the country. It is possible to explain this through the consequences of the Plano Real, instituted in the year 1994, that permitted the increase in low-priced agricultural imports, and thus discouraging national agricultural production.

The area occupied by agriculture in the state stabilized from 1985 to 1995, while the area occupied by pasture increased (IBGE, 1985, 1996;SEPLAN, 1996). The development of cattle ranching did not require large public and private investments for its economic viability.

In 1970, there existed less than 100,000 head of cattle in Acre. In 1980, this number had grown to 200,000 head. In 1996, cattle ranching in the state had more than tripled the number for 1980. This process was accompanied with a concentration of land as proprietors with the greatest economic efficiency bought the properties of the small land-owners to guarantee space for the growth of the herd (IBGE, 1996, 1985).

These results of these economic activities are an increase in the rate of deforestation. This fate can be observed in the Colonization Project of Pedro Peixoto, created in the end of the 1970s, with an area of approximately 318,000 hectares. The changes in this area were analyzed by Fujisaka, Bell, Thomas, Hurtado and Crawford (1996). In the time between 1993/1994 and 1994/1995 the area of pasture went from 17 hectares per property to 22 hectares. This is a growth of 30%. Annual crops had, in the same period, increased 50%, from a mean area of 4 hectares/property to 6 hectares/property. An accelerated process of deforestation exists in this region as a part of the most intense forms of land use and economic activities. This is shown by the increase in the deforested area over time. In 1984, 9% of the settlement area was deforested, 12% in 1987 and 25% in 1992.

The economic results of agricultural families almost shows a break-even economy, with the gross raw income almost equal to the mean total generated cost of the properties (Fig. 2). This means that cattle ranching, the principal economic activity, has an economic return, but the limited capacity of the local market to absorb agricultural products, the competition with better-quality products, and the better package of the Central-Southern-Southeast region, diminishes prices of the annual crops of the farmers. They have the alternative to lose their productive unit or intensify their investments by increasing herds of cattle, with a lower cost, better price, and greater local demand.

The Dilemma: Are cattle and agriculture the only options for extractivists?

When the two production systems are compared, extractivist and agriculture, both present an economically inefficient situation, however, the latter is almost break-even (R=0.98). It follows that the families with the better economic performance were those that directed their economic activities toward agriculture and cattle-ranching.

The historical struggle to create extractive reserves in Amazonia as to guarantee the direction of land-use for extractive families and as a barrier to deforestation. The reserves complied with some of these objectives sincethey allowed a large number of families to benefit from this land and also did not allow the rapid advance of anthropogenic activity in part of the forest. However, the data shows that the consequence of the elevated costs of production and low price of extractivist products contributed to the trend of the families to search for better economic alternatives. Animals, and the addition of cattle, appear to be the principal alternative for these families due to the low production costs, the ease of commercialization and the better price up to 1998.

As an estimation of the increased intensity of deforestation in extractivist areas, the Chico Mendes Extractive Reserve had nearly doubled its deforestation rate between the periods of 1986-92 and 1992-98. This could accelerate still more with the completion of the highway to the Pacific, increasing illegal logging in the border regions of Peru and Bolivia,

An alternative scenario for extractive reserves has as a model better economic efficiency for extractivist families, with a greater presence of constant capital (, machines, equipment, etc.) in relation to variable capital (manual labor). Until recently, the extractivist system has had the inverse relationship, with a predominance of utilizing variable capital. This is justified due to the degree of access to credit that extractivist families have had. Only 8% of extractivists receive credit, while 53% of settlement families were approved for credit.

The actual economic forces in this part of the Amazon reflect the current demands of the national and international market. The construction of an alternative land-use proposals needs to be based in part on better economic efficiency in family production systems. From both the economic and environmental perspectives, technologies like agroforestry systems, islands of high productivity, management of non-timber products, need to be analyzed and integrated into regional public policies to promote sustainable land uses.

Aknoledgements:

We thank the Federal University of Acre for the financial support and Managed Research Project (PPD/PPG-7) and Large Scale Atmosphere Biosphere Experiment in Amazonia, namely Dr. Irving Foster Brown. We would also like to thank Christie Klimas, Cleber Salimon and Monica De Los Rios for the technical support.

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Sassagawa, H.S.Y. 1999. Técnicas de sensoriamento remoto e sistema de informação geográfica (SIG) para o estudo da ocupação do espaço físico e dos tipos florestais da Reserva Extrativista Chico Mendes, Estado do Acre. São José dos Campos: INPE.

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Fig. 4: Landscape Change in the Chico Mendes Resex. Acre State - Brazil

Fig. 4: Landscape Change in the Chico Mendes Resex. Acre State - Brazil

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