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Document Date: August 2016 Project No. 2000001264 Latin America and the Caribbean Division Programme Management Department
Maranhão Rural Poverty Alleviation Project (MARPA)
Design Completion Report
Main report and appendices
Maranhão Rural Poverty Alleviation Project (MARPA)
Design Completion Report ii
- Appendix 1: O país e o contexto do desenvolvimento rural Appendices
- Appendix 2: Pobreza, Focalização, Género e Juventude
- Appendix 3: Desempenho do Programa País e Lições Aprendidas
- Appendix 4: Descrição detalhada do Projeto
- Appendix 5: Aspectos institucionais e arranjos para a implementação do projeto
- Appendix 6: Planejamento, Monitoramento e Avaliação, e Gestão do Conhecimento
- Appendix 7: Gestão Financeira, Desembolso e Fluxo de Fundos
- Appendix 8: Aquisições e Contratações
- Appendix 9: Project cost and financing
- Appendix 10: Economic and Financial Analysis (EFA)
- Appendix 11: Draft project implementation manual
- Appendix 12: Observância às políticas do FIDA
- Appendix 13: Procedimiento para la evaluación social, ambiental y climática (SECAP)
- Appendix 14: Contents of the Project Life File
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Currency equivalents
Currency Unit =
US$1.0 =
Weights and measures
1 kilogram = 1000 g
1 000 kg = 2.204 lb.
1 kilometre (km) = 0.62 mile
1 metre = 1.09 yards
1 square metre = 10.76 square feet
1 acre = 0.405 hectare
1 hectare = 2.47 acres
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PDHC Dom Helder Camara Project
PDP Production Development Plan
PLOA Annual Budget Law
PMU Project Management Unit
PNAE Programa Nacional de Alimentação Escolar (School Food Programme)
PNCF Programa Nacional de Crédito Fundiário (National Land Credit Programme) PPA Project Performance Evaluation
PROCAF Food Acquisition Programme
PRONAF Programme to Strengthen Family Farming
PRONATEC
Programa Nacional para o Acesso à Educação Técnica e Emprego (National Programme for Access to Technical Education and Employment) PRONERA Programa de Educação da Reforma Agrária (Land Reform Education Programme) RRA Rapid Rural Appraisal
SAF Secretariat of Family Farming
SEBRAE Serviço de Apoio às Micro e Pequenas Empresas (Micro and Small Enterprise Support Service SEDES Secretariat for Social Development
SEDIHPOP Secretariat of Human Rights and Popular Participation
SEFAZ Secretariat of the Treasury
SEGOV Secretariat of Government
SEMA Secretariat of the Environment and Natural Resources
SEPLAN Secretariat of Planning and Budget
SIAFEM State Financial Management System
STC Secretariat for Transparency and Control
TA Technical Assistance
TCE
UNDP
WFP
State Audit Office
United Nations Development Programme
World Food Programme
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Map of the project area
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- Project activities will be organized into three components:
Component 1. Organizational strengthening and capacity development. The objective of this component is to strengthen the beneficiaries’ capacity to participate more effectively in the local development process, better manage their organizations, reduce gender inequalities and create opportunities for youth. The activities will be organized into the following work areas:
a) Mobilization and community organization, focused on promoting broad participation and strengthening the capacity of beneficiaries and their organizations to identify problems and demands, participate effectively in local policy dialogue platforms and support to the formulation of productive investment plans. It will include teams of mobilizers work ing in the communities, along with training activities to disseminate information about relevant public policies and programmes and their operational procedures so that beneficiaries can take advantage of them;
b) Strengthening the capacities of economic organizations (cooperatives and associations) that work primarily in the processing and marketing of production, mainly through training and technical assistance focused on managerial issues (such as planning, accounting and financial management) andgood governance; and
c) Gender and youth, which will involve training beneficiaries and project personnel to promote the participation of women and youth in project and community activities and support for access by women and youth to government programmes. The project will also support the existing networks of rural technical schools that have been successful in providing technical education for rural youth ( Escolas Família Agrícola – EFAs and Casas Familiares Rurais – CFRs) but are grappling with serious infrastructure constraints such as lack of classrooms.
Component 2. Food security, productive development and market access. The objective of this component is to increase and diversify beneficiaries’ agricultural production, enhancing food security, improving the access to markets in favourable conditions, and improve the sustainability of production and its adaptation to climate change. The main activities will include:
a) Technical assistance and training to improve productive activities, natural resource management and market access;
b) Co-financing of productive investments in production development plans which will be prepared according to the beneficiaries’ profile, aimed at transforming beneficiaries’ agricultural production, making them more resilient in the face of climate change (e.g. through small-scale irrigation and the improvement of agro-ecological production methods), diversifying agricultural activities and increasing the value added of traditional agricultural products and activities in Maranhão – e.g., by promoting small agro-processing activities and supporting organic product certification. The project will co-finance these investments by providing non-reimbursable funds and helping beneficiaries access credit lines from existing government programmes (e.g., National Programme to Strengthen Family Farming - PRONAF), when appropriate, through, for example, Northeast Bank (BNB) or Bank of Brazil (BB). The non-reimbursable resources from the Project will primarily finance collective production infrastructure and equipment. At the farm level, the Project will finance only indigenous communities and extremely poor or vulnerable families that have no access to credit; here, the Project will mainly support the improvement of food security and nutrition. Beneficiaries will contribute a 20% counterpart of the investment costs. This contribution may be in kind or in cash and can include credit that they access with project assistance, as appropriate. Also with respect to small infrastructure, the Project will build small secondary access roads to better connect the beneficiaries’ communities with markets, with the condition that they are linked to productive investments and necessary for the feasibility of a Productive Development Plan.
c) Co-financing of socio-environmental investments, including environmental initiatives, such asrestoration of degraded lands, selective harvesting, storage and distribution of native seeds, restoration and protection of the riparian forest, fire management for the prevention of forest fires and the proper use of fire in productive activities, the use of agroforestry systems, the construction of ecological stoves that reduce wood burning and the use of renewable energy, water supply systems for human consumption, support to quilombola and traditional
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communities for land titling and innovative demonstration units to promote experimentation and learning among beneficiaries.
- As mentioned, different strategies will be used with different beneficiaries. Extremely poor households with limited access to land, weak participation in organizations and food insecurity problems will receive support to increase food production and improve their nutrition. Households with higher potential and higher participation in organizations will receive support to boost their productivity and production for household consumption and sale to public procurement programmes and for sale in private (local or regional) markets to both improve their nutrition and increase their income. Households in economic organizations such as cooperatives will be strengthened in their capacity to store and process agricultural products, increase their products’ value added and improve the marketing of their production. Meanwhile, indigenous communities will be supported by a specific, tailored-made strategy, which was defined in the final design mission, based on an assessment conducted during the mission.
Component 3. Management and administration. The component will include all activities in administrative and financial management, planning, monitoring, evaluation, knowledge management and outcome communication.
C. Background and rationale
- Maranhão is the second largest state in northeast Brazil and one of the poorest in the country. The state has 32 of the 50 municipalities with the lowest HDI values in the country and has the worst ranking in the vast majority of the most relevant social indicators. The proportion of the population living in poverty (39.5%) and extreme poverty (25,7%) is the highest in Brazil. Maranhão is also the state with the highest infant mortality rate (28 per 1000), the second-shortest life expectancy (70. years) and the third-highest illiteracy rate (20.9%). These indicators are even worse in rural areas, where 42.6% of the population is extremely poor. Maranhão has the third largest black population in the country; with the second largest number of certified quilombola communities, it is the only state in which most of this population is mainly rural, living in traditional quilombola communities. Maranhão is also hometo 16 different indigenous groups.
- Maranhão’s GDP was R$ 67.5 billion in 2013, ranking 17th of Brazil’s 27 federative units and representing only 1.34% of the country’s GDP. Economic growth has been based mainly on investments in mining and the growth of soybean cultivation in the southern portion of the state. Soybeans and minerals are currently the state’s main exports.
- Family farming plays a key role in food and nutrition security and income generation among the vast poor population. In spite of their importance, the productivity of agricultural activities is low, and farmers have problems accessing markets and obtaining good prices for their products. A high proportion have no access to credit and technical assistance, and lack of legal title to the land is very widespread.
- Although part of the Northeast region, which is characterized by the predominance of its semiarid areas, Maranhão has a variety of ecological zones, in particular the cerrado (savannah) and Amazon areas. Hence, over the past several decades, it has received limited attention from public policies and programmes, designed mainly to improve access to water and promote rural development in semiarid areas.
- Despite these problems, conditions are favourable for promoting rural poverty reduction by improving production among family farmers. Environmental conditions are more favourable than in the semiarid area, and some extractive products typical of Maranhão and performed by women, notably oil extracted from babaçu palms ( Attalea speciosa ), are on high demand. In addition, there is a favourable social, policy and institutional context for promoting initiatives to reduce rural poverty based on the transformation of agricultural production. In fact, Maranhão has strong civil society organizations interested in cooperating and participating in the implementation of rural development programmes.
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- The Project is also expected to achieve the following outcomes:
10,500 households increase their income by at least 30%; 5,000 households increase their productivity per hectare or animal by 20% above the average for the zone or municipality in which they are located; 4,000 households diversify their production through the introduction of at least one new product; 5,000 households adopt new practices for natural resource management and improve their resilience to climate change; 7,000 households receive higher prices for their products.
F. Implementation arrangements
- The Project will be implemented by the Government of Maranhão’s Secretariat of Family Farming (SAF), which will create a project management unit (PMU) for its execution. PMU headquarters will be located in the state capital of São Luís, and five local territorial units (LTUs) will be established as part of the PMU in the territories in the project area (including one LTU in the indigenous area of the Project). Due to its objectives, components and approach, the PMU will engage intensively with territorial collegiate organizations, state governments and a wide range of local stakeholders.
- For delivering technical assistance to beneficiaries, the Project will sign implementation agreements with the state rural extension agency (AGERPA) and with private providers. For strengthening organizational capacities, it will contract the services of civil society organizations already working with the beneficiary communities. For off-farm and on-farm investments among beneficiaries, the Project will transfer funds directly to beneficiary organizations, which will manage the resources and implement production development plans. The productive and small-infrastructure investments will comply with health and environmental regulations, and the Project will cooperate with the Secretariat of Environment (SEMA) and the State's Agricultural Defense Agency (AGED).
G. Costs and financing
- The total project cost (investment cost and incremental recurrent cost, including physical and price contingencies) is estimated at US$ 40 million, of which US$ 20 million (50% of the total cost) will be financed by an IFAD loan, around US$ 4 million (10%) will be contributions from the beneficiaries (both in-kind and in-cash), and US$ 16 million (40% of project costs) will be government counterpart funds that will finance all project components and the related duties and taxes. Similarly, the government will co-finance the salaries and allowances of staff involved in project implementation and provide office accommodations for the PMU. As part of the government counterpart funds, it was agreed during the final design mission that the National Economic and Social Development Bank (BNDES) will contribute w i t h up to US$ 7 million (BRL 24 million) from its non-reimbursable financing for investments in production projects, in partnership with the State of Maranhão. Staff from BNDES participated from the outset in the project design missions. In addition, the beneficiaries’ contribution will include credit lines that they may access from the financial sector, such as PRONAF, provided, for example, through BNB and BB. The funds allocated for project management represent about 14% of the total project costs.
H. Risks
- The risks of the Project are considered moderate. The main risks that need to be considered are: 1) political and policy risks: changes in the political context could delay congressional approval and the start of implementation and could affect the budgets and approaches of the federal policies and programmes, with which the Project is expected to coordinate; 2) weakness of the implementing agency in areas such as financial management and M&E; 3) lack of experience and capacity in the Maranhão state government to implement complex projects with international financial organizations;
- risks of operating in indigenous communities; and 5) climate change risks, which could affect production volumes and the achievement of production, nutrition and income goals. To mitigate all
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these risks, mitigation measures have been agreed with the Maranhão State Government, aimed at ensuring a rapid start-up of Project activities and that the process of approval and signature of Loan and Guarantee agreements run smoothly. IFAD's country team is monitoring progress of project approval closely and continuously, in coordination with federal authorities in Brasilia, to minimize the risk of slippages in project and loan approvals schedule.
I. Environment
- The environment is an integral part of the Project and will be given special consideration under Component 2. The Project is expected to contribute to the financing of small-scale infrastructure and to employ better water storage technologies for livestock production and small-scale on-farm irrigation
- along with appropriate technical assistance - especially for organic vegetable farming, in order to increase production and reduce farmers’ vulnerability to the projected rise in average temperatures and more frequent droughts. The Project will also promote the use of agro-ecological practices that reduce the risks of the effects of climate change, including the use of seeds suited to local conditions, agro-forestry production systems, soil conservation practices, multiple cropping and organic (instead of synthetic) inputs. In addition, the Project will support traditional income-generating activities based on the extraction of products from native forests using sustainable methods.
J. Knowledge management, innovation and scaling up
- The Project will help strengthen the institutional capacities of the SAF by contributing to the scaling-up and policy-making process. In this regard, the Project will promote agro-ecological production technologies and institutional arrangements that are innovative in Maranhão; it will also promote learning and discussion through systematizations by the M&E and KM system aimed at analyzing the key factors and contextual conditions that explain the outcomes obtained. Project innovations and their outcomes will be discussed in policy dialogue bodies, such as the Forum of State Secretariats of Rural Development in Northeast and Minas Gerais to promote their scaling up. The Project will also link efforts with the new Knowledge Management Project (Semear international), which will be operational in 2017-19 included, and ensure knowledge sharing and scaling up of successful experiences both in-country and globally, through IFAD's partnerships with other development agencies, such as FAO, WFP, UNDP, World Bank, CAF, IICA and others.
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Component 1: Organizational Strengthening and capacity development
Product1: Community mobilization and organization. Mobilize families and strengthen community organizations to better participate in local decision platforms
01.01. 01 5) 600 community organizations benefit from mobilization actions (RIMS 1.6.4), of which: 40 women's organizations 10 indigenous organizations
0
0 0
600
40 10
Project M&E System; Technical Progress Report; AWPB; Systematizations by thematic area of intervention; Baseline Final evaluation assessment.
Per year PM&E Project Unit
Product 2: Strengthening organizations. Strengthen capacities of economic organizations (cooperatives and associations) that work with production, processing, product marketing and other services.
01.02.01 (^) 6)100 organizations (cooperatives and associations) strengthened, with functioning organizational structure and governance.
0 100
Project M&E System; Technical Progress Report; AWPB; Systematizations by thematic area of intervention; Baseline Final evaluation, assessment.
Per year PM&E Project Unit
Continuity of public policies and programs that support rural poverty reduction and commercialization of products of family farming;
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Product 3: Gender and youth. Ensure gender and youth mainstreaming, promote women's participation and opportunities for young people in the activities of the Project.
01.03.
01.03.
- 1,300 women leaders trained in community organization;
- 2,700 rural youth trained by schools of Pedagogy of Alternation.
0
0
1,
2,
Project M&E System; Technical Progress Report; AWPB; Systematizations by thematic area of intervention; Baseline; Final evaluation assessment.
Per year
PM&E Project Unit
Continuity of public policies and programs in the State of Maranhão
Component 2. Food security, productive development, and market access
Product 1: Technical Assistance - TA. Improve beneficiares’ productive activities, ensure the success of PDPs and improve marketing of their production.
02.01.01 9) 15,000 families are supported with direct TA (RIMS 1.2.5), of which: 700 are indigenous families.
0
0
15,
700
Project M&E System; Technical Progress Report; AWPB; Systematizations by thematic area of intervention; Baseline; Final evaluation assessment.
Per Year
PM&E Project Unit
Continuity of public policies and programs in the State of Maranhão
Maranhão Rural Poverty Alleviation Project (MARPA) Design Completion Report
I. Strategic context and rationale
A. Country and rural development context
- Brazil is the country with the largest territorial extension in South America, at 8.54 million km^2. Its population in 2015 was approximately 204.5 million, 16% of it living in rural areas.^2 In 2014, the country became the world’s seventh largest economy, with a GDP of US$ 2.346 trillion. According to World Bank data, its per capita gross national income (GNI) (World Bank Atlas method) that year was on the order of US$ 11,530, putting it in the upper-middle income category. Notwithstanding, Brazil is marked by profound regional inequalities. In 2012, its Northeast region generated only 13.6% of GDP, even though it had 28% of the country’s population. The average annual growth of the Brazilian economy from 2000 to 2008 was 3.9%. The global economic crisis of 2008 hit the country hard, reducing growth in 2009 to virtually zero. Following a brief recovery in 2010 (7.5%), GDP growth fell, and in 2014, the economy was again in crisis, with a 4% reduction in GDP in 2015.^3
- Agricultural sector. The agricultural sector has played a major role in the Brazilian economy. While its current share of GDP is modest (5.6% in 2014),^4 it is an important source of income generation, employment (16% of the workforce) and foreign exchange (36% of exports). Agriculture has exhibited significant growth in the past few years. Annual grain production increased 3.3 times in the period 1990/91 to 2014/15, soaring from 57 million tons to 193 million.^5 This dynamic growth however, occurred in the regions dominated by agribusiness, especially the vast cerrado (savannah) area, which accounted for 48% of grain production in 2010^6.
- According to the 2006 Agricultural Census (IBGE),^7 Brazil had 5.2 million production units, 4. million of which were family farms^8 and 808,000 classified as non-family production units.^9 Family farms accounted for 84.4% of the total but occupied just 24.3% of the area. Family farms generated 38% of agricultural revenues but employed 75% of all workers in the sector. These differences at the national level were mirrored in the regions and states and were even greater in the Northeast. It should be noted, however, that the family farming sector is heterogeneous and stratified, including both poor and extremely poor families. Some regions also have a significant contingent of seasonal wage workers, often migrants, who earn very low salaries and are employed mainly in the production of sugarcane, coffee, oranges and other crops.
- Despite the improvement in its economic and social situation over the past 20 years, Brazil is still a country of marked inequalities that are more accentuated in rural areas and the North and Northeast regions. For example, 25.7%^10 of Maranhão’s population lives in extreme poverty, while the proportion of extremely poor people in the Federal District is only 1.2% (PNUD, IPEA et al. 2013).
- The state of Maranhão. Maranhão has an area of 331,900 km^2 , representing 3.9 % of the nation’s territory and 21.4% of the Northeast region, ranking second in the region in terms of land area (Araújo, Bernado et al. 2015). In 2010, it had a population of 6.85 million, or 7.3% of the national population and 26.4% of the Northeast’s population.
- Two ecoregions take up the most area in the state. The Amazon rainforest covers a broad swath of the western region along the border with Pará. The cerrado, or savannah, ecoregion covers the most land in Maranhão, including the entire southern region and stretching toward the eastern coast of the state. The Mata dos Cocais ecoregion is typical of the transitional area between the ecoregions
(^2) Data: from IBGE http://www.ibge.gov.br/home/estatistica/populacao/estimativa2015/estimativa_dou.shtm (^3) Source: http://www.ibge.gov.br/home/presidencia/noticias/imprensa/ppts/00000019515011102014502214193696.pdf (^4) Source:http://databank.worldbank.org/ddp/home.do?Step=3&id= (^5) Source: http://www.economiabr.com.br/Eco/Eco_exportacao_agro.htm, based on data from CONAB. (^6) Source: http://www.pioneersementes.com.br/media-centre/artigos/160/a-evolucao-da-produtividade-no-cerrado. (^7) This is the most recent Agricultural Census. Source: http://www.ibge.gov.br/home/estatistica/economia/agropecuaria/censoagro/default.shtm. (^8) According to Law No. 11.326, family units are characterized by work in a limited area (no greater than four fiscal modules) and by the use of predominantly family labour. 9
10 Virtually all “non - family”’ production units are agribusiness establishments. Source: IBGE. Censo Demográfico de 2010, TA http://www.ibge.gov.br/home/presidencia/noticias/censo10052011.shtm ; http://www.creditoecobranca.com/blog/2011/05/13/nordeste-em-extrema-pobreza-oportunidade/
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of the Amazon, cerrado and caatinga (dryland) regions, the latter present in small areas along the border with Piauí. Two types of climate can be distinguished: the climate in the Amazon region is equatorial, with average annual rainfall of 1,600 to more than 2,000 mm, while in the other regions it is tropical, with average annual rainfall of 1,200 to 1,800 mm and a distinct dry season. The recent phenomenon of extraordinarily dry years, suggests that the region may be suffering the effects of global climate change. Although the state is located in the Northeast region, which is primarily semiarid, it also has several other ecoregions, especially savannah and Amazonian rainforest. Consequently, it has not received much attention in government policies and programmes, which for several decades have invested in semiarid zones to alleviate the problem of access to water and promote rural development. However, although much of the state has high rainfall indices, there is evidence of worsening conditions in the dry season, impacting farm production, vulnerability and resilience to climate change.
- Maranhão had a GDP of R$ 67.5 billion in 2013, occupying the 17th place in the national ranking. This value represents only 1.34% of the country’s total GDP.^11 The past 20 years have seen major investments in industry (chiefly in the transformation of minerals, boosting this sector’s share of the state GDP to 15%). Nevertheless, the agricultural sector still has the greatest share (17%) of the state GDP^12 , with the services sector accounting for 68%.
- Maranhão is one of the poorest states in the country, with 32 of the 50 Brazilian municipalities with the lowest values of the Human Development Index (HDI). It ranks in the lowest position in the country in regard to nearly all the most important social indicators and it has the highest percentages of population living in poverty (39.5%) and extreme poverty (25.7%) in Brazil. Maranhão also has the country’s highest infant mortality rate (28 per 1000 live births), the second lowest life expectancy (70. years) and the third highest illiteracy rate (20.9%). The situation in the rural areas of the state is even more alarming: according to data from the 2010 Demographic Census, 42.6% of this population lives in extreme poverty.
- Some 37% of the Maranhão population is rural, and half the municipalities in the state are essentially rural. Maranhão is the state with the third largest black population in Brazil and the only state in the country where the highest percentage of this population lives in rural areas. The state also has a high proportion of afrodescendants (quilombola) communities and indigenous groups, ranking second in Brazil in the number of titled quilombola lands. The surviving quilombola areas include 527 quilombola communities (426 of which have been certified by the Palmares Cultural Foundation) spread across 134 municipalities, with a population of roughly 1.36 million (some 340,000 families). Maranhão also has 16 recognized Indigenous Territories, representing 2.7% of the titled lands in Brazil.
- Maranhão’s agricultural sector. Up to the late 20th century, Maranhão’s agricultural sector relied on four traditional food crops – rice, cassava, maize and beans – as well as large livestock holdings (primarily cattle) and agro-extraction (babaçu palm). In the last two decades of the 1990s, two new crops assumed growing economic importance: soybeans and eucalyptus. These crops, which were first introduced in the southern and southwestern regions of the state, spread to the central and eastern regions as well. In the opening years of the 21st century, the area planted with soybeans tripled, soaring from 178,000 hectares in 2000 to 556,000 in 2012. Thus, soybeans overtook rice, the state’s most traditional crop, and are now one of Maranhão’s main exports, along with mining products (iron and aluminium).
- There are approximately 287,000 agricultural production units in Maranhão, 91% of which are family farms and 9% non-family production units.^13 Family farms occupy just 34.8% of the land in the state, but account for 43.5% of agricultural revenues, with production concentrated in rice, maize, beans, cassava and small livestock. Maranhão’s rural poor include families living in land reform settlements, families engaged in agro-extraction (mainly women working as babaçu coconut breakers) and quilombola and indigenous populations.^14 To date, more than 130,000 families are living in 1,
(^11) Data: from IBGE: http://www.ibge.gov.br/home/estatistica/economia/contasregionais/2013/default.shtm. (^12) Data: on GDP, from the state government. Source: http://www.ma.gov.br/wp-content/uploads/2015/06/Plano-Agricola-e-
Pecuario.pdf. (^13) 2006 Agricultural Census (IBGE). (^14) According to FUNAI, Maranhão has 16 Indigenous Territories of diverse ethnicity. These Territories have a total population of 31,700.
