http://www.fao.org/ecosystem-services-biodiversity/incentives/en/ Presentation of the Incentives for Ecosystem Services case study for Brazil. © FAO: http://www.fao.org

1. • Deforestation and fragmentation of riparian
habitats impacting water quality and
quantity
• Intensive unsustainable agriculture and
over-grazing degrading land, causing loss of
productive capacity of soils and silted
streams
• Lack rural household sanitation causing
polluted water courses and health issues
• Degraded ecosystems increase reliance on intensive
agricultural practices and deforestation
• Lack of capital to implement forest restoration and transition to
sustainable agricultural production
• Lack of access to:
• Information and technology to improve agricultural
practices, processing practices and marketing of agricultural
products.
• Sanitation, health care, education and alternative livelihood
opportunities
• Public policies and basic infrastructure
• Capital to:
• Compensate for forest conservation
• Support improved agricultural production
• Technical assistance to:
• Develop sustainable agricultural systems
• Build storage infrastructure, install processing equipment
and increase the market value of agricultural products
• Improved access to markets and value-added
agricultural products
• Improved municipal infrastructure support
• Forest conservation through:
• Rehabilitation and protection of riparian habitat to
create a water recharge buffer
• Fenced springs to protect water supply
• Agroforestry systems to recover degraded forest areas
• Sustainable agricultural practices such as:
• Erosion control through soil conservation and gully
plugging along water courses
• Silvopasture systems – rotational grazing, improved
fodder (sugar cane silage) and improved breeds
(to reduce herd size
• Improved sanitation management
Threats to the Ecosystem Desirable Practices
Barriers to their adoption
Incentives Required
RIO RURAL
PROGRAM
CASE STUDY: Rio Rural, BRAZIL
1
Incentives for Ecosystem Services in Agriculture (IES)

2. BRAZIL: Financial Investment for
Best Practices
Combined, these efforts result in improved farm productivity and resilience, and food security
Rotational grazing
$ EMATER (increased productivity reduce pressure on remaining
forest)
$ BMBF/ University of Cologne
with soil conservation and gully plugging along the water line
$ Programa Productor de Agua
Improved fodder: sugar cane
silage to reduce herd size and
GHG emissions
$ EMATER (technical
assistance)
$ INTECRAL
Fenced water spring
$ Programa Productor de Agua,
from water users
Water recharge buffer
$ Programa Productor de Agua
$ CEPF
Improved sanitation and road infrastructure
$ FECAM
$ Estradas da Producao
2
Nature reserve s within
properties and
monitoring of ecosystem
services
$ CEPF
$ Conservation
International
$ Mata Atlantica
Incentives for Ecosystem Services in Agriculture (IES)

3. 3
BRAZIL: Incentives for Ecosystem
Services
Land and forest restoration
• Rehabilitation and protection of riparian habitats
• Fenced springs
$ Programma
Productor de Agua
• Finance to:
• Restore, reforest and protect forest to create a
water recharge buffer
• Fence spring areas
$ CONAB
$ PAA
$ LLX
$ Fecam
$ Prosperar
$ Estradas da
Producao
Livelihood diversification and strengthened
local capacity
• Improved access to markets
• Value-added agricultural products
• Improved sanitation management, water use
efficiency and access to rural health care
• Rural road rehabilitation
• Access to higher value markets
• Capital and training to improve eco-technology
production
• Improved sanitation, water management and access
to health care and markets
Sustainable agricultural practices
• Soil conservation and erosion control
• Silvopasture systems – rotational grazing,
improved fodder and breeds
• Agroforestry system development
• Creation of natural reserves within rural properties
$ EMATER
$ INTECRAL
$ BMBF/
University of
Cologne
$ CEPF
• Finance and training to:
• Implement rotational grazing, improve fodder –
sugar cane silage, and improve breeds for
sustainable agricultural production
• Set establish nature reserves within farms and
monitor ecosystem services outcomes
Incentives from the programmes/ investors:Financed by:Best practices:
PES
Incentive Type Key:
Incentives for Ecosystem Services in Agriculture (IES)
IES

4. Rio Rural is a program of integrated financing strategies for the development of ecosystem services in micro-
watershed of the State of Rio de Janeiro.
Rio Rural is a watershed management project that fosters change in rural production processes within a framework
of market-driven agricultural development. It focuses on the sustainable intensification of smallholder farms through
added-value and improved market linkages. Innovative mechanisms include co-funding from various government
programmes, water users, and the private sector, such as EIA and CSR investments.
The Rio Rural approach uses micro-watersheds as a planning, intervention, monitoring and evaluation unit for
watershed management. This has drawn on the lessons learned from micro-watershed approaches in the States of
Paran’a, Sao Paulo and Rio Grande do Sul over the last four decades.
Co-investments within the micro-watersheds have totaled US$10,133,158. This has allowed long-term financial
sustainability to rural development activities. PES from water users also contributes to the funding used to invest in
protecting water quality through soil, water and forest conservation. Payments are made on condition that farmers
develop a farm plan and invest existing technical assistance to improve farm productivity, mainly in coffee and dairy
systems in an integrated approach, as compensation for conservation.
The micro-watershed ecosystems are threatened by:
• Expanding intensive unsustainable agricultural practices, in particular over grazing causing land degradation,
silted streams and severe reduction of soil fertility. This reduces productive capacity and increases the need to
convert additional forest to rapidly increase productivity through slash and burn.
• Deforestation and fragmentation of riparian habitats affect native biodiversity and disrupt water flow levels in
watersheds. They have the potential to change water spring dynamics, increase flooding events and affect local
climate changes.
• Lack rural household sanitation causing water course pollution and health issues
• Lack of rural road maintenance resulting in inaccessible areas after heavy rainfall.
• Inability to access higher-value markets for agricultural products through lack of access to technology to improve
breeds, credit to establish processing operations, technological knowledge and products suitable for green
markets.
BRAZIL: Overview
4
Incentives for Ecosystem Services in Agriculture (IES)

5. • Soil conservation and gully plugging along water courses can assist to control soil erosion and the potential for sedimentation of water courses.
• Implementation of agroforestry systems can help to recover degraded forest areas to meet forest policy set aside requirements (legal reserve and
permanent protection areas). They can also help to increase productivity and environmental protection by reducing pressure on soil fertility from
intensive practices.
• Implementation of silvopasture systems, such as rotational grazing, improved fodder (sugar cane silage) and improved breeds to reduce herd size.
Keeping livestock in a confined pasture area with intensive food and water supply can enable cows to produce more milk in smaller pasture areas,
reducing the need to expand agricultural land and increase the long-term income potential for smallholder farmers. Rotational grazing respects the
growth time of grass, ensures recovery of soil fertility, greater uniformity of pasture and productive efficiency.
• Restoration and protection of riparian forest habitat can create a water recharge buffer and also help to stabilize soil structure, conserve habitat
for native biodiversity, improve forest connectivity and increase carbon storage.
• Fenced springs can also protect the water supply from cattle encroachment and further habitat degradation.
• Improved sanitation, road and agricultural processing infrastructure can reduce urban pollution of water courses, improve rural living conditions
and increase access to higher-value markets.
• Monitoring ecosystem services outcomes in natural reserves establishing within rural properties.
However, smallholder farmers face barriers to adopting these sustainable practices:
• Past agricultural policies that focused on monocultures of coffee and sugar, ranching and agricultural expansion have resulted in degraded
ecosystems and poor soil fertility. Farmers are unable to escape the cycle of relying on intensive agricultural practices and deforestation for
pasture expansion, further degrading ecosystems. They lack:
• Access to information and technical assistance in sustainable agricultural practices, processing and marketing of agricultural products
• Capital to invest in improved forest restoration and fencing
• Due to increasing urbanization in the State of Rio de Janeiro and Brazil, many initiatives focus on urban areas. This leads to an imbalance in access
of rural populations to public policies, basic infrastructure and alternative livelihoods, reducing their ability to move out of poverty. Investments in
the protection of ecosystem services to make their conservation profitable for farmers can contribute to rural economic development.
BRAZIL: Best Practices and
Barriers to AdoptionIncentives for Ecosystem Services in Agriculture (IES)
5

6. BRAZIL: IES Initiatives
Program Financed by: What it does
Programa Productor de Agua Water user fees Payments to farmers to repair riparian forest habitats, implement agroforestry
systems and reduce deforestation. Technical assistance
EMATER Instituto paranaense de
Assistencia Tecnica e Extensao
Rural - Extension Service
Institution
Min. of Agriculture,
Livestock & Supply
Cooperation agreements to assist producers and invest in agroforestry and forest
restoration.
INTECRAL Project Min. of Research
and Education &
University of
Cologne, Germany
Technology transfer to improve adoption of sustainable agricultural practices such
as silvopastrure, sugarcane harvesting mechanization, water monitoring and
management, recovery of degraded areas and payments for ecosystem services.
FECAM Fundo Estadual de Conservacao
Ambiental e Desenvolvimento
Urbano – State Fund for
Environmental Conservation
&Urban Development
State Government
of Rio de Janeiro
Financial support for environmental projects and urban development such as
reforestation, restoring degraded areas, channeling water courses, environmental
education, implementation of cleaner technologies and sanitation.
Estradas da Producao State Government
of Rio de Janeiro
Rehabilitation and maintenance of rural road infrastructure.
CEPF Critical Ecosystem Partnership
Fund
Mata Atlantica
Conservation
International
Finance the creation of natural reserves within rural properties. Implementation
and monitoring conducted by Mata Atlantica and Conservation International.
Acu Port Complex Private Sector LLX
CSR and EIA
Investment in agro-ecological production, through the construction of 5
greenhouses and 4 integrated production systems (mandalas).
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Incentives for Ecosystem Services in Agriculture (IES)