» Posts tagged: ‘Brazil


This is the first blog of a CIRI roundtable on Complementary Currency Systems and South-North knowledge transfer. The event got together 25 academics and practitioners from several generations and European countries.

by Georgina M. Gómez

The meeting was an invitation to re-think the differences between the CCS in the developed and developing countries, and to explore learning from each other. While in Europe and North America the schemes with complementary currencies focus on promoting a sustainable economy and enhancing social cohesion, in Latin America they are mainly seen as tools for income generation and the improvement of welfare. The differences in terms of motivations are clear in the economic daily practices in the North and South, and have made the transfer of knowledge among practitioners quite slow. Attempts to reproduce in the North the methodologies of the South have been extremely rare, possibly because of the conception that the contexts are too different for those experiences to be useful or perhaps because they are not sufficiently well-known. In contrast with the geographical compartmentalization of CCS experiences, researchers in the academic field have studied CCS in the North and the South with the same theoretical tools and frameworks, which are almost invariably designed in the North, as if context need not affect the research tools and instruments. We started the meeting with two presentations of the largest scale CCS in the South.

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Voices from the South

The first speaker was William Ruddick, from the Kenyan organization GrassrootsEconomics.org. Ruddick presented the case of which he was one of the main organisers, Bangla-Pesa, the first community currency implemented in a slum in Mombasa in 2012. A legal battle occurred then between the organisers, who were accused of currency forgery, and the government, until the later understood that the notes were similar to business vouchers that circulated within a closed network. The Bangla-Pesa has been used without problems since the courts’ allowed it in 2013 and the scheme has been replicated in two informal settlements in Nairobi in 2014. This year the Bangla-Pesa model has been implemented and expanded upon by FlowAfrica.org in South Africa, in the area of Bergrivier.

The Bangla-Pesa, is based on building a closed currency circuit of approximately 100 users to lock in production, circulation and consumption in the territory. Potential members are introduced to the scheme by four existing members who vouch for the new one. The organisers then issue the equivalent in complementary currency of 400 Kenyan Shillings or 500 Rand in the South African programmes, of which roughly half are given to the new entrant. The rest is a contribution fee of the new member to a community fund and will be used to pay community service work, like garbage collection done by youth. The daily value traded is about 10,000 Kenyan Shillings (1000 Rand in South Africa) and engages daily about 100 businesses. That means that Bangla-Pesa enables an extra 100 Kenyan Shillings worth traded daily per businesses.

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The second speaker was Carlos de Freitas of the Brazilian Palmas Institute. Similarly to the Mombasa case, the financial activities of Palmas started in an undeveloped and poor informal settlement called Conjunto Palmeiras in the North of Fortaleza, Brazil. The aim was the same: to retain as much value as possible in the neighbourhood, so that local needs could be satisfied with local production, and to support local entrepreneurship. However, in the case of community Banco Palmas the physical currency was created in 2002 as a spin-off of a pre-existent micro-credit programme and not primarily as a means of payment. Banco Palmas bank provides small loans in palmas (not in the official currency) that allow the community enterprises and individual firms to start their production, which they would never be able to obtain from a regular bank. Much of their start-up capital is spent locally in wages, inputs, and space rent, so it generates local economic effects.

Banco Palmas is not a pure credit system as defined by Wicksell (1898) in ‘Interests and Prices’, because every palma in circulation has a back-up in official currency. Credits offered do not require collateral, because neighbors vouch for the person receiving it. Producers may obtain interest-free small loans in Palmas currency or regular money loans with a small interest rate. The approach of Banco Palmas articulates several projects to tackle social inequalities, participatory education, community organization and a general territorial development approach. In 2011 there were around 270 businesses using the Palmas currency and 46,000 Palmas in circulation (around 20,000 Euro at that time).  The scheme has created 1300 jobs but is presently in decline due to the availability of other welfare protection policies in Brazil.blog georgina foto 3

Conclusion

To wrap up, around 2000 experts on CCS were avidly looking at the case of the Argentine Redes de Trueque for an example of scaling-up, around 2007 they were looking at Brazil and the Community Banks, of which Palmas was the first and most prominent. The focus is now shifting to Africa with the examples of Kenya and South Africa, in which a number of the problems experienced in the other two are working to be corrected.

In this blog, we will explore to what extent small-scale farmers can exercise their agency in the face of structural constraints. As writers on agency have noted, agency can take the form of outright resistance, the subtle reshaping of current discourse, or silent resilience. The social, economic, and legal structures at various levels, i.e. the power context, delimits the extent of agency to a large extent.  There are two societally relevant issues that we aim to highlight in this contribution to the CIRI blog. First, to what the extent are supposedly representative local bodies providing small scale farmers with avenues to effectively counter prevailaing power structures and assert their agency? And second, what is the role of the state in doing so?

The cases we are studying involve small-scale farming communities that specialise in (niche) products such as the açaí berry in the Brazilian Amazon, and local ‘terroir’ products in Morocco such as Argan oil. In such cases, as the production process becomes mechanized in small factories,  cooperatives set up to represent the interests of the farming communities involved in the harvesting of the natural resources may come to be dominated by other interests. In the case of the cooperative supposed to represent the açaí berry family farming community, most members are not actually producers but rather traders offloading (often excess) produce at the cooperative. In addition, as sales are largely controlled by local traders and regional buyers, processors and retailers, the commercial ‘bottom line’ of large scale operatives increasingly displace the goals of promoting small scale suppliers, inclusion and sustainability.

As for the role of the state, it is keen to promote this fledgling açaí berry production chain as it appears to offer a win-win win situation: It is a healthy product that can provide good income to the poor forest dwelling peasants while being produced in accordance with ecological sustainability – without cutting trees. State representatives have many ideas and schemes that help poor farmers consolidade açaí income, diversify production further, get help and information. However, they are also behind efforts to promote monoculture production. This will remove peasants completely from the picture (as is occuring in Para state) and thus also the other benefits for them and the environment. Yet, such a production mode helps capital overcome logistics and quality control problems for the local and international markets.

Similarly, from his study on the Argan oil industry in Morcco (http://www.tandfonline.com/eprint/pPK2cTeJPHZJErXHZAG7/full#.VH4cE8k-ckQ), Bertram Turner concludes that Argan oil ‘cooperatives have been established in a top-down approach and thus cannot be regarded as an example of a self-organized, counter-hegemonic alternative development. They allow the technological upgrading of resource processing in line with the demands of the industry.’ Moreoever, industry operatives catering to a global market, aided by government policies, have managed to increasingly separate local suppliers from access rights and resource control.

More generally in Morocco, a key problem for so-called ‘produits de terroir’ is that the value-adding processes currently mostly takes place outside the country rather than inside, with little economic gains for the small-scale producers. Today, one liter of Argan oil is exported for one dollar but fetching 15-20 dollars when sold abroad. The same is true for many of the medicinal plants which are harvested locally but then further transformed into high-end products by French multinationals in France and elsewhere (see the remarks made by the well-known Moroccan economist Najib Akesbi in a radio broadcast on youtube: https://www.youtube.com/watch?v=bsL2wgRz-o0) .

If we look at the broader policy context in which this is happening, Morocco’s latest agricultural policy, the Morocco Green Plan (‘Plan Maroc Vert’ – PMV), is dedicating its second pillar to  so-called ‘solidarity agriculture’. However, there seems to be no agreement among the key stakeholders on what exactly this means. Currently, the main modus operandi is for the Ministry of Agriculture to pay consultants to set up a business on behalf of the local farmers, run it for three to four years, and then hand it over to the farmers. However, as the farmers do not participate much in the initial process, the businesses may not be sustainable.  Another potentially problematic aspect of the Plan is that it rests to a large extent on the success of contractually ‘associating’ (agrégation) small and medium farmers (and their lands!) to a large land-owning investor (‘l’agrégateur’, who in turn has a contract with the state) to achieve viable outputs destined for export. However, by incorporating small farmers into modern integrated value chains managed by the private sector and disregarding traditional systems of rights to land and water, the PMV may herald a new wave of rural dispossession through the manipulation and commodification of water and land resources in irrigated agriculture in Morocco.

A third case that is relevant here is the irrigation project in the Sao Francisco river in the interior of Pernambuco state, where grapes and mangoes are grown. The original idea of this irrigation project was to produce energy but also provide small famers with plots for self sufficiency and sale. It also included water provision, farming advice, schools and infrastructure . Now these small plots are informally aggregated by large agro-industrial interests and sold via certification to global markets, especially (50%) to The Netherlands.  As a result, small scale farmers cannot afford the better plots, are often cheated of good land and cannot afford to acquire certification. The state plays an ambiguous role in terms of labour rights and social security. Representative unions have been crushed by local entrepreneurs with the help of the state. Yet the state also mitigates some negative effects such as seasonality by setting up government schemes which give the farmers training and income subsidies out of season. On the other hand, federal moves to introduce a harvest contract removes their ability to ask for unemployment benefits out of season or overtime within season.

The larger issue in all these cases is that agricultural workers and their families are directly impacted by market intrusion (either demand for their products or import competition) and indirectly by neoliberalism and openness of markets in general. The impacts of state intervention are sometimes helpful to them, sometimes ambiguous, and often harmful. This is because the state is drawn into contradictory policies as it tries to both ameliorate social conditions and support the process of capital accumulation and efficiency.

From these brief description of the case studies, several more empirically grounded and societally relevant questions emerge. For example, when we read the label of a fairtrade product, it is suggested we are helping poor farmers. Should we believe this? More generally, what do states do to help poor farmers, whether they supply their products to local, regional or international markets?  It appears the state helps  with one hand and harms them with the other. Is this an inevitable contradiction?


International Institute of Social Studies

CIRI aims to scale up and identify synergies between existing research at ISS on civic agency and change agents, as drivers of societal change and development. This blog is a forum on which to share and discuss themes and issues which fall within the broad framework of the programme.

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