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Brazil suffers from high income inequality and widespread poverty, especially in rural areas. Despite recent policies to support rural settlements through land reform, a mismatch remains between the rural population’s social demands and the state’s capacity to respond.

Votorantim Celulose e Papel (VCP), a major pulp and paper company embarking on a large forestry expansion in Rio Grande do Sul, devised a business model that included the local community as partners in eucalyptus production. Through VCP’s Forest Savings Account programme, ABN AMRO Real provided farmers the financial resources (backed by a guarantee of purchase of timber by VCP) to plant eucalyptus.

VCP provided seedlings and technical assistance, committing to buy the timber after seven years, at a fair price. The case looks at VCP’s business model—to achieve aggressive growth targets to triple revenues while contributing to the socioeconomic inclusion of a poor rural community.

Partnerships include:

One of the academic partnerships is the Federal University of Santa Maria and the Albert–Ludwigs–Universität Freiburg (Germany), which created a joint study to monitor parameters such as soil, atmosphere, water (including rainfall quality and quantity inside and outside the forest), nutrients and light conditions for eucalyptus plantations and its interaction with sorghum, soy and forage crops (the agrosilvopastoril system) and with native forages in the south of Rio Grande do Sul.

Besides the working partnerships with academia, the partnership with the public agency Emater (Technical Assistance and Rural Extension Agency) has been fundamental to the Program’s implementation. Emater provides capacity building, training and monitoring for the Program.