MB – We had to find some solution to the problem. We could not continue as before, we could not simply throw it away somewhere.

We started developing research in order to add value to that product. A friend suggested we should talk to a chemistry professor, Donato Aranda of UFRJ (the Rio de Janeiro Federal University).  I took 1kg of the product along to Rio de Janeiro. Our conversation was excellent. The professor is an exceptional person! If Brazil had more people like Donato, we would be in a much better situation... I left the product with him. He made an assessment, studied it and, after some months, sent a report to Agropalma suggesting some alternatives, and one of them was to produce bio-diesel. That would depend on how bold we wanted to be. He had the project for the research. An innovation that did not exist anywhere else in the world and that might work.  
After a lot of talk, we decided to take on the financing of that research. We signed a contract with the University and with the Chemistry College. It was a contract with the University, not with him personally. The result of that research was the development of a new catalyst.

As you know, in order to produce bio-diesel, you need the oil, the alcohol, and a catalyst to speed up the reaction. The catalyst developed is solid and can be regenerated. This means that in our bio-diesel production process, in which the raw material is fatty acid rather than oil – thus, there is no glycerin to separate out – esterification is used, so the only by-product we have is water. The catalyst is re-used because we regenerate it.

PO – What year was that?

PO – It is an fantastic story!... What was the next move?

After negotiations, Dedini accepted this and put together a fantastic engineering package. An efficient, compact, low-cost plant was created. There is no open market for bio-diesel yet; nobody in his right mind will invest 10 to 15 million euros (that is the price for a normal bio-diesel plant in Europe). In Brazil, it’s got to be a cheaper business.  Therefore, the whole project was drawn up so that it was a feasible investment for us. And Dedini presented a project that cost less than 2 million dollars; the project is fully computerized, with every safety item you can imagine.

From the screen of a PC you can control the whole plant, producing a bio-diesel fuel that meets 100% of the European and US specifications.

PO- That means you are able to export bio-diesel.

MB– The main problem for bio-diesel is the cost that still exists. As we are only just starting, we do not have scale production. All you have to do is to remember what it was like in the case of alcohol. At first, alcohol cost more than gasoline. The same is the case today with bio-diesel. When you do not have scale production, you have very high costs. At present, in a competitive market, it is very difficult to offer to a company like Petrobrás, Ipiranga, Texaco etc. a marvelous product, which is sustainable and ecological but which costs 70% more than ordinary diesel oil.

PO – How do you see the relation between bio-diesel and family farming?

MB – It is different in our case. As a private enterprise, our main focus is not to provide social benefits. It is the government that does that, with the taxes paid by the private sector and the taxpayer. If a private enterprise invests in partnerships involving family agriculture, it is because the program is good and is working, we make money and so does our partner. You manage to bring development to a certain region with reduced expenditure on the part of the participants involved in a project. 

At present, with these projects, a private enterprise can expand its production area without investing capital in land, without increasing personnel. (In our case, the total cost of charges and benefits is almost 102% of the salary we pay.) The farmer also gains because he can produce safely, knowing that what he produces will generate income, with guaranteed sale, technical assistance and improved income. The government will have to intervene less in the regions where these programs go ahead, reducing expenditure on minimum income programs, basic food packages etc.

In life, everything that becomes rare attracts interest. The only preserved forest in existence in our region is Agropalma’s, and if we are not careful it will soon become the target of illegal wood-cutters’ or squatters’ greed; so we decided to carry out a pilot plan with 50 family farmers in the region. Each family would receive 10 hectares and the project was divided that way. The State government supplied the land, Agropalma contributed with the production of seedlings - which take from 15 to 18 months to reach the planting stage – the initial infrastructure, assistance with technical training, first application of fertilizer, and guaranteed purchase of the produce. The price is calculated as a percentage of the value of the unprocessed oil in the European market. An exchange market that works without any interference on our part. The problem is that the palm takes from 3 to 4 years to start producing.

MB- You have private enterprise, the state, federal and municipal governments all involved. All of them with their respective responsibilities, rights and duties under a signed contract. The producers were brought together to form an association. This was a pilot plan for 50. In the following year, we settled over 50 families, and last year another 50. We already have 1,500 hectares. The first families to be settled took such care of the plantation that production started early, almost a year before we expected.

MB – They have already started receiving them this year. What they received in the first 3 months of the year amounted to an average of R$800.00 each. Don’t forget that the average income in this region does not go beyond R$65.00 a month. There is no family farming program in the Northern region of Brazil that pays even half of that amount.

Don’t forget either that it is a permanent job because it is a perennial plantation, that is, it will be producing there for the next 30 years. So, for the next 30 years that person will have a job. As it is a type of plantation that does not require daily cultivation; and you can divide this area, let’s say that not all the 10 hectares are planted with palm, but 6 hectares of palm and 4 hectares of any other plantation, or fruit growing compatible with the soil, so that the farmer may have, from his own direct labor, subsistence farming as a supplement and not as an end in itself.

We are negotiating this project with the MDA (Ministry for Agrarian Development) but the bureaucratic barriers are very high.  Around Agropalma alone we have over 1,000 families settled by the INCRA, most of them in very bad conditions. This is a break with the accepted model.

MB – Because it is said that extensive sustainable plantations are not viable in Brazil.
The proof that such a task is feasible is what we see at Agropalma. If we have corresponding support it is possible to carry out a big project involving family farmers. A big differential that producers in Europe, in the US and Canada have is knowing that they can produce because they will have assured income due to the subsidies offered.

If you make a settlement today, in Brazil, with producers planting rice, beans, corn or something else, if there is a crop failure they will have no-one to sell to nor anything to resort to. In our project, there is a strong company backing the farmers, and prepared to face the usual market tribulations.

In the State of Pará, they organized the planting of manioc for the production of starch. However, the industry was not built. The manioc is ready for the harvest. What now? What will they do with the manioc?

MB – It can be adapted to a series of other crops. The thing is to break with tradition. Those involved with family farming should put ideology aside and have a nationwide project. That is, let us suppose that someone produces, someone buys and someone sells. It is a mistake to say that family farming cannot be connected with a company. On the contrary, it should be connected with a small, medium or large company.
Malaysia’s agricultural project was self supporting and grew. A country the size of the State of São Paulo – and it has more than 10 farm products of which Malaysia is among the 3 largest producers in the world. Precisely because of that, the whole agricultural part was carried out in conjunction with the industrial part. The industrial part, which adds value and sells.

We had a meeting where we were asked: What are the financing plans for bio-diesel?
Banco do Brasil has a credit line for the rural production of oil-bearing plants, aiming at bio-diesel. The people at the BNDES have a credit line for the construction of factories. What we need to know now is who will buy this product. Because today you will produce at a much higher cost than what the market is paying. Who will buy? What is the other side to this process?

PO – How do you see the market for bio-diesel?

MB – If people are talking about that is because we gave them the opportunity for such talk. We are sufficiently incompetent to let all this happen. If we analyze the way in which investments were made in the Amazon, ever since the first development plan, the SPVEA, around the fifties, they all failed. One way or another, they were all radical.

If we take the SUDAM (Amazon Development Superintendency) plan, at the time of the seventies and eighties, we see that it was an absurd plan, because the government gave subsidies for people and companies to clear as much as possible of the forest. At that time, as there was no ecological thinking, they all went to the Amazon region, both national and international companies. The concept at that time was different. Until there came a time when people realized that model would not work. Those who invested in something that could be sustainable, remained there. Those who didn’t, left. All you have to do is to look at the investments that were made there and see how many remained. Even today there is no adequate control in the Amazon region because the main economic activities related to the forest are in the hands of politicians or people who are connected with them in some way.

PO – With all this international pressure, aren’t you afraid that it may come to a point where this negative image of deforestation affects products coming from the Amazon region?