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Natural Resources

Açaí: From the Ground to the Snack Bar

An increase in consumption is intensifying competition, causing a price crisis, and exposing the difficulties of moving from extractivism to agribusiness

The açaí wholesale market next to the retail market: informal

Eduardo CesarThe açaí wholesale market next to the retail market: informalEduardo Cesar

From Belém, Pará

In 15 seconds, using a hoop-shaped palm leaf to secure his feet, Antonio da Silva climbs up an açaí tree 15 meters tall, pulls out the machete strapped to his back, cuts off a bunch of ripe fruit, and climbs back down. With his hands, he pulls the small round berries off the bunches, lets them fall into a straw basket, and starts the process again. Silva, 28 years old, is a short, sturdily built man who sports a Mohawk haircut. From September to February, he repeats the process 20 to 30 times a day to harvest the berries from the 10,000 açaí trees. Silva says, “I don’t even really know how many there are” because they are scattered throughout the middle of the forest near the city of Belém.

Açaí production is the largest plant extractive industry in the state of Pará in Brazil, and the industry is predominately small-scale and informal. At a wholesale market that operates every day from 4 to 6 a.m. next to the public retail market, producers display their take from the previous day in thousands of baskets of berries harvested from nearby islands and brought in by small boats during trips that can take as much as 12 hours. Sellers, buyers and loaders mingle. The lighting from the lampposts is dim, and the brightest light comes from the bar across from the market. Each producer stands in front of the piles of baskets and whispers the price to the potential buyers. Quickly, the buyers pay in cash and place the baskets in sacks. There are always stevedores rushing by, pulling or pushing wheelbarrows piled high with cargo, screaming at the pedestrians to move out of the way. A quick count shows that R$2 million passes through the market in two hours. The taxman and tax receipts are nowhere in sight.

The facilities that produce and sell açaí in Belém reflect the challenge of improving the exploitation of the region’s natural resources. With guaraná, another fruit with economic value that is native to the Amazon region, the difficulty of moving from extractivism to agriculture is apparent as well (see report). Different crews from Embrapa, the Brazilian Agricultural Research Corporation, selected the most productive varieties of açaí and guaraná. At the same time, they struggle to convince producers to pay more attention to planting, fertilization and growing, always mindful of the possibility of enhancing productivity and quality.

Balance and speed: Antonio da Silva pulls off a branch with mature açaí seeds...

EDUARDO CESARBalance and speed: Antonio da Silva pulls off a branch with mature açaí seeds…EDUARDO CESAR

In November 2004, Belém-based Embrapa Amazônia Oriental began distributing a highly productive variety of the açaí tree known as the BRS-Pará. The tree begins to produce berries after three years, once the tree reaches an average height of 1.12 meters off the ground—two years sooner than the native açaí trees.

According to Maria do Socorro Padilha de Oliveira, a researcher and curator at the Embrapa Amazônia Oriental palm tree germplasm bank, “the BRS-Pará tree is already planted in over 70 of the 140 towns in Pará, and harvesting the berry is easy when production begins. Only a knife is needed at first, but ladders or aluminum rods will be required as time goes on. We offer quality seeds and planting methods for producers. Slowly but surely, they are beginning to understand that they must take better care of the trees and improve growing techniques in order to turn a profit.” Two new varieties should be launched in the next few years, and they will expand the area planted with açaí. Today, at 50,000 hectares, this area is still small compared to the estimated one million hectares of native açaí trees.

Parallel universes
In a recently completed study, a group of researchers from the Center for Higher Amazon Studies (NAEA) at the Federal University of Pará (UFPA) identified movements and tensions that are reshaping the economic balance of açaí. The planted area is expanding and is gradually taking over production from areas in which palm trees grow in the middle of the forest because these trees are more productive. Consumption is also on the rise, generating competition among the companies along with an increase in the cost of raw materials. Government policies that can foster innovation, curb losses and solve old problems are still few and far between. No one knows what to do with the huge quantities of stones, since only a thin surface layer of the berry is removed to make the thick liquid used for breakfasts or soft drinks. The possible use of the stones as fuel for furnaces or organic fertilizers cannot keep up with the pace at which the stones are being left in vacant lots or in sacks throughout the city.

Two parallel universes emerged from the UFPA research: The first is the universe of açaí crushing companies, a diffuse group estimated to number 4,000 small merchants identified by red signs – Açaí do Edil, do Jesus, do Gordinho – in front of houses. They obtain their supplies daily from the producer markets and sell freshly crushed açaí for R$5 or R$6 per liter for immediate use by consumers who live just a few blocks away from the point of sale. The other is the universe of companies that process açaí pulp. As a rule they are small, consume the crop, and supply the distributors in Rio de Janeiro and São Paulo. While the crushing companies forge ahead with no major problems, company representatives report difficulties in financing production, investing in new technologies, and staying afloat. According to this study, since 2002 there have been seven “legacy” companies, seven new companies, and 14 failed companies. Researchers believe that others may close in the next few years due to the rising cost of raw materials, since the competition among crushing companies has become fiercer.

... and separates them over a basket

Eduardo Cesar… and separates them over a basketEduardo Cesar

Just like Havaianas sandals, açaí used to be for the poor, but the middle class acquired a taste for it once it began to be exported, and athletes began to use it as part of their diet. The nutritional qualities of açaí came to be more appreciated because the pulp of this fruit is rich in monounsaturated fats that prevent heart disease and obesity, and in anthocyanin, the purple pigment that helps reduce residues known as free radicals.

According to economist Francisco de Assis Costa, “açaí is now socially legitimate.” Costa coordinated the study that was submitted in January 2012 to business owners, government representatives, and research centers. Reflecting growing consumer interest, from 2002 to 2010, production soared from 300,000 to 800,000 metric tons. The number of employees climbed from 679 to 1,052, and production rose from R$23 million to R$83 million in value. Yet the profit margin fell from 50% to 12%. According to Costa, “the selling price tumbled due to competition and the price of raw materials climbed due to greater demand.” (See graphic below).

“We understand the structural reasons behind this situation. If not acknowledged, this crisis may lead to a concentration of companies in Pará, and the weakest may close, while companies in the neighboring states grow stronger. Costa says, “other açaí production centers are already springing up.” In his opinion, the lack of governmental authority will mean that large farms will flourish at the expense of agroforestry systems such as açaí and that income will become more concentrated instead of more evenly distributed. “These effects would be counterproductive for the policy that proclaims that forests are an input and for the sustainable and inclusive development of the region.”

Costa began to analyze the connections between the rural and urban economy in 1977. After a ground-breaking study on the production of natural rubber in Pará by the Ford Foundation, he showed that rural communities have an inherent capacity to innovate, renewing crops and labor techniques, and that they are not passive or doomed to vanish as is commonly believed. He helped dispel misconceptions about the region when he demonstrated that business cycles, such as for rubber, supplemented and did not replace—as was commonly said—already established agriculture-based economic structures. With support from the Ford Foundation, in October Costa launched the first six books in the Economia Política da Amazônia Collection, with the main studies, revised and updated, on the regional development of the Amazon region that were prepared in the last 35 years.

A paucity of governance
In Costa’s opinion, the gridlock in the so-called local açaí production arrangement (arranjo produtivo local – APL) exposes the difficulties of taking advantage of the natural resources of the Amazon region in an organized and sustainable fashion, as doing so requires a broader role for the government as an organizing force. “Governance and government policies, now nearly nonexistent, could prevent higher costs and boost productivity.”

064-071_Acai-Guarana_203-1In 2003, when they looked at the economics of açaí for the first time, Costa and his team observed that institutional links were weak. However, there was a growing mobilization between producers, representatives of research centers, and organizations of the state and federal government that appeared interested in improving collective organizations such as those for açaí. Costa observed, “It seemed that everyone believed that an effective policy of improving APLs was in the offing, but the mobilization gradually faded as decision-making authority became concentrated. Today, everyone is solving the problems on their own and there is no collective vision.” Costa was the general coordinator of planning at the Amazon Development Agency (ADA) from 2003 to 2005. Since 2011 he has been coordinating the management of studies and regional policies at the Institute for Applied Economic Research (IPEA) in Brasilia.

In 2011, the UFPA team looked at the açaí production chain in the Belém Metropolitan Region and discovered a scenario of devastation, highlighted by the gap between açaí producers and processors, a lack of support policies, difficulties obtaining bank loans, and a paucity of governance. Economist Danilo Araújo Fernandes, a professor at UFPA who took part in the study, says, “there are no government policies to foster innovation or determine the quality of açaí. Today, no one is able to tell you what makes good açaí. If quality control were stronger, there would be more protection from unfair competition. Stronger government regulation would help generate local brands and determine places of origin, as is the case for wine.”

Açaí in the box
Researchers confirmed that companies and producers became more interested in innovating between 2002 and 2007, reflecting the expansion of the market, but interest dropped off from 2007 to 2010 as a result of the higher cost of raw materials and the liquidity crisis (see graphic below). Companies prioritized the development of new products such as freeze-dried açaí, açaí mix (ice cream with the pulp of the berry, pasteurized and mixed with other fruits, and sometimes with granola), and energy drinks and juice in tetrapacks.

Bony Monteiro, an entrepreneur from Pará, said, “I began working in this business in 2002. I quickly realized that adding value and creating products was the solution.” Monteiro, a bold entrepreneur, is implementing new strategies to transform a century-old trade. He says that he bought a pulp processing company and hired engineers to develop machines to extract the pulp without human contact. Then he sold the company and in 2012 he bought another in Igarapé-Miri, an açaí production center 300 km from Belém.

064-071_Acai-Guarana_203-2During the harvest, every week three tanker trucks haul away the açaí that will be packaged in tetrapacks in two plants in Rio de Janeiro. “We had lots of problems at first,” Monteiro recalls. “The açaí clogged, soured and changed colors when it was bottled.” He was creative and critical of current forms of production and marketing, and so he launched his own brand, Bony Açaí, using athletes he sponsors to advertise his products, and he soon plans to launch combinations with other fruits or açaí-based foods to be consumed between meals.

At Estação das Docas, next to the municipal market, an ice cream shop sells ice cream made from açaí and other fruits from the region such as uxi, bacuri and cupuaçu. A kiosk displays biojewelry—bracelets, necklaces and rings—made from jarina, the seed from a palm tree hard enough to be called the ivory of the Amazon. The ice cream and jewelry show that the exploitation of the Amazon’s biodiversity continues to rely predominately on individual initiative, intuition, luck, and private capital.