Supporting Farmers on the Frontline of Climate Change
During 2022-2023, farmers in the Brazilian Amazon suffered through a prolonged drought. Jailton de Oliveira, a 44-year-old farmer from Anapu, watched helplessly as his cocoa plantation perished and his income prospects dwindled. With guidance from Joaquim Júnior, a technical assistance professional from Solidaridad, Jailton applied for the Sustainable Agribusiness Receivables Certificate (CRA).
Once approved, Jailton was able to restore his three hectares of cocoa intercropped with banana, cassava and other native species, such as andiroba. He was also able to invest in sustainable practices, such as pruning and fertilization, and install an irrigation system to reduce the impact of future droughts.
“I hired 20 hours of backhoe work to increase the size of my pond and was able to irrigate the cocoa. Now I’m going to buy the pump and hope for the summer rains to fill the new tank,” Jailton said.
What is the Sustainable CRA?
Jailton is one of 77 cocoa farmers in Pará selected in the second round of the certificate process, an initiative aimed at strengthening family farming and promoting sustainable practices. This phase disbursed 462 loans worth R$10.4 million (nearly 1.7 million euros), supporting 385 families in Bahia and 77 in Pará.
The credit mechanism was designed by the Arapyaú Institute, Gaia Group and Tabôa Community Strengthening, with philanthropic support from the Humanize Institute and legal advice from TozziniFreire Advogados. Solidaridad provides technical assistance to farmers in the Amazon region.
The project envisages sustainable cocoa production on 2,000 hectares and the conservation and preservation of 3,000 hectares of forest, reinforcing the commitment to low-impact environmental practices.
Why Access to Credit is Key in the Amazon
According to a study by the Climate Policy Initiative (CPI) and the Pontifical Catholic University of Rio de Janeiro (PUC-RJ), only 15% of Brazilian family farmers have access to rural credit, despite representing 75% of the country’s farms. Access is limited and uneven depending on farm size, location and crops grown. Of the 15% who have access to credit, 20% are on properties between ten and 100 hectares, while smaller properties, with up to four hectares, represent only 10% of the total.
Geographical differences also play a major role. According to the survey, 29% of producers are from the South and only 9% from the North. Even when farmers do access credit, there are inequalities in how much they receive. Under Pronaf, the main credit line for family farming, contracts in the South have an average value per hectare 18 times higher than those in the North. Additionally, crops like corn, wheat and soybeans tend to attract much larger investments compared to products like cassava, bananas and cocoa.
To change this picture, the certificate initiative combines the financial resources with rural technical support. “These lines of credit offer more accessible financing for family farmers, in addition to offering simplified processes, in which the investment plan is developed jointly with the farmer,” explains Roberto Vilela, Executive Director of Tabôa.
“Credit through CRA meets a pent-up demand for resources among cocoa-producing families, due to the gap left by the difficulty in accessing credit from Pronaf (National Program for Strengthening Family Farming). We know that technical assistance is crucial to reducing risks and ensuring the proper use of funds.”
Paulo Lima, Program Manager at Solidaridad.
A Collaborative Financing Model
The certificate follows the concept of blended finance, a model that combines philanthropic and market-based financing to make credit more inclusive, especially for family farmers settled through agrarian reform who struggle to access this type of service. This approach was crucial for the project’s inclusion in the Brazilian Development Bank (BNDES) call for proposals, which promotes the use of hybrid financing structures in the country.
According to Tereza Campello, BNDES’s Socio-Environmental Director, the initiative supports both people and the planet. “The project helps disseminate traditional and sustainable cultivation practices that are economically viable, paving the way for currently vulnerable populations to establish themselves in profitable activities, with increased production and productivity,” explains Campello. “Furthermore, it can be replicated for other crops and regions of the country.”
To access Sustainable CRA resources, cocoa producers must meet requirements that ensure the social and environmental sustainability of their work. These commitments include prohibiting child labor and protecting permanent protection areas like riverbanks, hillsides and springs. Furthermore, all beneficiaries must use Agroforestry Systems (SAFs) for cultivation.
The certificate project has already proven its effectiveness during its pilot phase in southern Bahia, which ran from 2020 to 2023. During this period, the results were impressive: producer income increased by an average of 60%, while default rates remained at just 0.28%, a rate considered exceptionally low. Productivity was also significant, with cocoa growing 52%.
By supporting farmers in their transition toward more sustainable production, the initiative not only strengthens local economies but also helps protect one of the planet’s most vital ecosystems.