Closer than you think: the challenges for food production in the metropolis of Zeina Latif Fernando Furriela Plínio Ribeiro (President) Audit Committee: Ricardo Abramovay Marcos Lisboa Marcelo Paixão Izabella Teixeira Fernanda Estevan Bernard Appy Ariaster Chimeli Rudi Rocha (Presidente) Scientific Council: Sergio Leitão Mariana Luz Marcos Lisboa Ricardo Sennes (President) Board of Directors: São Paulo, November, 2020 Instituto Escolhas ShigueoWatanabe(APTA/SSA), and Tauan Manieri. May Jay Van Amstel, Márcio Selva (UNEP), Osvaldo Aly,Peter Collaborators: CaioBifaroni(FEA Junior), de Souza Leão, Leandro Cizotto andCarolina Passos Researchers: Marcela Alonso Ferreira, Vitória Oliveira Pereira Fernando deMelloFranco (Instituto Urbem) Technical Coordination: Jaqueline daLuz Ferreira (Instituto Escolhas) General Coordination: Study designed by Instituto Escolhas metropolis of SãoPaulo food production inthe the challenges for Closer than you think: (UFRRJ), Roberta Curan, Sebastião Wilson Tivelli Fernado Gaiger, DEVELOPMENT. SUSTAINABLE AIM TOCONTRIBUTE TO ANALYSES THAT AND ENVIRONMENTAL DEVELOPS ECONOMIC THE INSTITUTO ESCOLHAS 2 Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo for family farming. are enterprises of agricultural 65% area of the RMSP, according to IBGE data. agricultural establishments (EA) occupy 15.5% of the total 5.083 in the metropolis. with legumes and vegetables and create 180,000 new jobs would have the potential to supply 20 million people ayear urban area of the Metropolitan Region of São Paulo (RMSP) 60,000 hectares cultivated on model properties in the peri- 20 million Keyfigures

R$ 433 million. 433 R$ 63,5% 86,4% derives from horticulture. derives dedicatedEA to these segments. 63.5% of the total GPV is specialized in horticulture and floriculture, with 3,039 The agricultural production of the country’s largest metropolis and produce 60.8% of the so-called Gross Production Value (GPV are small properties of up to 20 hectares, which employ 74.8% of the workforce (14,962 people) food is 1.5x those currently receiving the Bolsa Família government subsidy in that district. Sapopemba ( of São Paulo) and the 24,000 families that could consume the 1,000 workers. This is equivalent to the current area of vacant land in the district of the potential to supply 80,000 people ayear with legumes and vegetables and employ 200 hectares cultivated on model properties in urban areas of the metropolis would have 80,000 1 ) –equivalent to nearly farming in the RMSP. concentrates 35% of the GPV from The municipality of 35% 1 generated by agricultural production. Agricultural Census thatmeasures theincome Produção- VBP, anindex used inthe From thePortuguese Valor Bruto de 3 Instituto Escolhas Closer than you think: the challenges for food production in the metropolis of São Paulo

Key figures 4

14% Instituto Escolhas Food expenditure comprises 17.5% (Brazil) and 10% 40% 14% (RMSP) of the average household budget. Expenditure on fruits, legumes and Food expenditure on meals away from home is directly This percentage reaches 21% in metropolis vegetables accounts for 10% of the proportionate to family income. For the average RMSP households with a per capita monthly family total average household food budget. household, it accounts for nearly 40% of total food income of up to R$ 347.22. expenditure. Among the poorest 20% of the population, this figure drops to 15%. 1,500 Each year, 3 million tons of horticultural products – including fruits, legumes, vegetables, flowers, fish and others – are sold at the São Paulo Terminal Warehouse (ETSP)2, better known as CEAGESP. These products originate from 1,500 different Brazilian cities and 18 other countries. 96% 1.3 million 42% of fruits, 73% of legumes and 96% of vegetables sold at The RMSP food sector (including production, industry, commerce and services) directly CEAGESP come from within the state of São Paulo. employs 13% of the region’s workforce, or 1.3 million people. This is twice the amount of people working in civil construction in the RMSP.

2 From the Portuguese Entreposto Terminal de São Paulo – ETSP, the Warehouse is located on the west side of the capital and administered by the Companhia de Entrepostos e Armazéns Gerais de São Paulo, otherwise known as the CEAGESP. Closer than you think: the challenges for food production in the metropolis São of Paulo Harvesting leafy vegetables inagreenhouse. Photo: Zanone Fraissat/Folhapres 5 Instituto Escolhas sustainable and resilient and sustainable analyze UPA’s capacity to make the food system in the São Paulo metropolis more urban and peri-urban agriculture (UPA) in the region. The study also aims to properly of further investigating the economic and financial viability and possible challenges for study explores the subsystems that compose the RMSP food system, with the objective São Paulo Closer than you think: the challenges for food production in the metropolis of With this in mind, the Instituto Escolhas, in partnership with Urbem, designed the study when they originate in centers of great socioeconomic relevance, such as the RMSP. impacting consumption upon Transformations habits. have can even broader consequences production, zoning and planning all have great capacity to effect change, beyond just policies pertaining to supply, distribution, public procurement, promotion of local distribution and marketing methods. But that is not all. For the food system as awhole, majorAs consumer hubs, urban centers play a key role in shaping food production, around 21.6 million inhabitants. And all these people need to eat. Closer than you think: the challenges for food production in the metropolis São of Paulo America, encompassing 39 municipalities 39 encompassing America, The Metropolitan Region of São Paulo (RMSP) is the largest urban agglomeration in Latin Presentation the potential to feed 20 million people –nearly the entire population –with legumes and The study shows apromising context, revealing that agriculture developed in the RMSP has government decisions and investments within the scope of UPA. bottlenecks, distinguish public and private policies, and simulate scenarios from potential RMSP. Compiling the information in this way made it possible to identify local production of secondary data with mapping and case studies of different of types agriculture in the In order to achieve this, the study reconciles the identification, systematization and analysis . Developed. by interdisciplinary an team of researchers collaborators, and the 4 . 3 and concentrating 17.7% of national GDP and heterogeneity of actors, objectives androles present inpractice, as well asthecomplexity inherent intherelationships between these elements. bases. SFS are founded onpromoting access to fair trade andstrengthening relationships between rural andurban andlocal production (FAO; RUAF, 2020). by generating income, social benefits andminimizingpositive ornegative impacts ontheenvironment without compromising theirenvironmental, social andeconomic (Resource Centre onUrban Agriculture andFood Security). According to FAO, SFS must beableto promote food andnutritional security for current andfuture generations da Serra, Salesópolis, Santa Isabel, Santana deParnaíba, Santo André, SãoBernardo doCampo, SãoCaetano doSul, SãoLourenço daSerra, , Taboão daSerra and . da Rocha, , , Itapecerica daSerra, , , , , Mairiporã, Mauá, MogidasCruzes, , Pirapora doBom Jesus, Poá, RibeirãoPires, RioGrande 5 4 3 urban fabric or near the metropolis. consider the opportunities brought by investment in agricultural production within the in order to keep up with the intensifying public debate to on access healthy food, and to buying food and cooking at home –an in-depth examination of such changes is important made.be In the context of the arrival of the pandemic –when many people went back to For this to become areality, however, the study points out that structural changes need to promoteand environmental other conservation, among benefits. create generate new and jobs income, expand organic sustainable and food management vegetables, It also shows that the prioritization and strengthening of local agriculture can This definition brings together elements from thebroad conceptual UPA framework thathasbeendeveloped over nearly two decades to encompass the The 39 municipalities include:SãoPaulo, Arujá, , Biritiba Mirim, , , Carapicuíba, , Diadema, , Embu-Guaçu, , , Franco Sustainable andresilient food systems (SFS) are aconcept andmethodological approach developed by theFAO (Food and Agriculture Organization), inpartnership with RUAF and the city environment. the city and violence and competition for land), UPA also influences food security, health, Just as it suffers the effects of public policies and urban dynamics (such as territories.systems of these inhabitants, acting in an integrated way with the economic and ecological as physical space and labor –and often targets its production at urban area and its surroundings. The practice urban harnesses resources –such The cultivation and distribution of food and other products within the urbanized Agriculture Peri-urban Urban and (UPA) 5 6 Instituto Escolhas of the area is available area practices. is of for the agricultural conservation areas.and Nearly of ¼ the total is urbanized landmass over just and 20% A significant portion of RMSP’s 7,945 km2 area is reserved for environmental protection Closer than you think: the challenges for food production in the metropolis São of Paulo Horticultural production underhightension wires within thecity of SãoPaulo. Photo: MarleneBergamo/Folhapress Location anddistribution of space for UPA in the RMSP Complexitiesof territorythe * and where household and population where and and household expansion is more perceptible. especially the case with peri-urban territories, where urban and rural landscapes coexist and norms that are specific to each conservation and preservation mechanism. This is Therefore, urban and peri-urban agriculture is developed in acomplex context, with zoning Rocky formations, rivers and lakes correspond to 3%, planted forests another 3%andother uses 1%. 18% 45% 26% Occupation of RMSP space the potential for cultivation other cultivated areas or thathave which reaches 22% when addedto mosaics of agriculture andpastures,

formations forest areas urbanized * 7 Instituto Escolhas Closer than you think: the challenges for food production in the metropolis of São Paulo

anexo cartografias_03.pdf 1 11/12/20 10:59 8 Instituto Escolhas

TítuloEvolutionEvolu�on e núme of of rtheo the do expansion expansionmapa of urban space RMSP,space fromRMSP, 1553 1553 to to 2002 2002 Legenda Key Administra�ve Limits Metropolitan region of São Paulo

Evolu�on of the urban spread – Emplasa 1553 to 1881 1882 to 1914 1915 to 1929 1930 to 1949 1950 to 1962 1963 to 1974 1975 to 1980 1981 to 1985 1986 to 1992 1993 to 1997 1998 to 2002

NN Data Source: Emplasa, São Paulo State Government. esscaleala Evolution of urban expansion - RMSP, from 1553 to 2002. Data source: Emplasa, São Paulo State Government. Map developed by Instituto Escolhas and Urbem. Map developed by Ins�tuto Escolhas and Urbem. 11 : :110.000 110.000 Closer than you think: the challenges for food production in the metropolis São of Paulo Environmental Areas -RMSP. anexo cartografias_05.pdf111/12/2010:59 Data source: Secretariat of Infrastructure andEnvironment, SãoPaulo State Government. Mapdeveloped by Instituto Escolhas andUrbem. F Map developedbyIns�tutoEscolhasand Urbem Environment, SãoPauloStateGovernment. Data source: SecretariatofInfrastructureand Environmental Areas Administra�ve Limits Key onte: Environmental Areas –RMSP

Agricultural Establishments Metropolitan region ofSãoPaulo Protec�on andRecoveryAreasforWaterSources Integral Protec�onConserva�onUnits Indigenous Lands Green Areas(parksetal) Environmental RecoveryAreas Sustainable Conserva�onUnits 1 :110.000 1 :110.000 esc sc ala ale

N N 9 Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo Green Belt Biosphere Reserve -RMSP. anexo cartografias_06.pdf111/12/2010:58 Map developed by Instituto Escolhas and Urbem. Data source: Secretariat of Infrastructure andEnvironment, Map developed byIns�tuto Escolhas andUrbem Environment, SãoPauloStateGovernment. Data source: Secretariat ofInfrastructure and Leg F Key RMSP Green BeltBiosphere Reserve Administra�ve Limits Título enúmer Green BeltBiosphere Reserve –RMSP onte: enda

Metropolitan region ofSãoPaulo Urban Area Areas forTransi�onandCoopera�on Protec�ve BoundaryandConnec�vityZone Core area o domapa 1 :110.000 1 :110.000 esc sc ale ala

N N 10

Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo Food System Food The São Paulo Metropolis production production transport distribution distribution center market retail 11

Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo classes, though to extent alesser for lower income classes. Eating out is becoming ahabit for Brazilians from all social Consumption (51% and 41%, respectively). mostly concentrated sectors in the services commerce and food services,which directly employ million 1.3 people, the home. In the RMSP, this maximizes the importanceof Even in rural areas, almost ¼of all eating happens outside predominate for lower income households. healthy food, while processed and easily prepared products higher the income, the greater the consumption of fresh Consumption habits differ between social classes: the of food expenditure for RMSP households. legumes, vegetables, roots and tubers represent only 11% also fresh puts less food in their shopping Fruits, cart. Besides eating at home, less the average RMSP resident 12

Instituto Escolhas Closer than you think: the challenges for food production in the metropolis of São Paulo

Distribution of consumption by expenditure group, according to family income per capita – RMSP, Evolution of the share of food expenditure in general household expenses - RMSP and Brazil, 1987/88, 13 2017/2018. 1995/96, 2002/03, 2008/09 and 2017/18.

Years São Paulo Metropolitan Region Brazil

% food expenditure % food expenditure % food expenditure % food expenditure 25% 23% 25% 26% 27% 27% 28% in total budget in total budget in total budget in total budget 29% 32% 30% Information Information Instituto Escolhas 18% 1987/88 24% 81% 17% 16% 15% N/A N/A 21% 18% 15% 11% 18% 15% 1995/96 22% 77% Information Information 10% 14% N/A N/A 15% 19% 11% 14% 17% 18% 15% 17% Information 2002/03 15% N/A 17% 76%

2008/09 15% 57% 16% 69% 44% 49% 46% 42% 40% 40% 40% 38% 37% 40% 2017/18 12% 61% 14% 67%

1º 2º 3º 4º 5º 6º 7º 8º 9º 10º Data source: Research on Household Budgets, IBGE. Graph developed by Instituto Escolhas and Urbem.

Other Food Transport Housing Distribution of the population working in the food industry, per year and activity sector. Data source: Research on Household Budgets, Brazilian Institute of Geography and Statistics (IBGE). Graph developed by Instituto Escolhas and Urbem. RMSP, 2012 to 2018.

29 28 30 113 26 27 99 27 91 105 27 99 78 98 663 658 Primary production 591 651 548 588 Industry 573 Food commerce Food services 613 499 488 540 544 382 455

Data Source: National Household Sample Survey, IBGE. Graph developed by 2012 2013 2014 2015 2016 2017 2018 Instituto Escolhas and Urbem. Closer than you think: the challenges for food production in the metropolis São of Paulo supermarkets hypermarkets. and Brazilians acquire 47% of their household products at 90,000 such stores in the country, are 40% supermarkets. large retail chains, coexist with the public network. the Of The private supply centers, which are connected to the consumers. and adopt more advantageous marketing policies for farmers first three provide alternatives to private channels and can centers, restaurants, food banks and schools. Ideally, the includes greengrocers, fresh food markets, other food The ETSP of is part the public supply network, which different1,500 municipalities and countries. 18 center in Latin America, which receives products from Warehouse (ETSP), known as CEAGESP, the largest supply to the table. This is the case for the São Paulo Terminal also organize the flow of food products from the field define the marketing logistics and, to acertain extent, and the consumer. The supply and distribution centers a large number of intermediaries between the producer markets with produce. This format is characterized by most greengrocers, restaurants and open-air fresh food In Brazil, long marketing circuits predominate, supplying DistributionMarketing and product at its sale value. intermediary adds 100% of the value of purchase of the commissions from the long circuit format. In general, each only possible thanks to the elimination of intermediaries’ and cost reduction for the latter, in an equation that is consumer tends to ensure higher income for the former they serve. Shortening the gap between producer and and restaurants focused on tracking the origin of the food agroecological markets, institutes that producers, support circuitThe short format is most common in organic or with final restaurants and consumers. delivering baskets at home and negotiating prices directly transport goods to the point of sale, assembling and by market variations, whereas in circuits, short producers in large quantities and the price of products is determined intermediary. Typically, in alonger circuit, producers deliver are made directly from the producer or through asingle On the other hand, in the circuit short format, purchases 14

Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo Data source: SãoPaulo Terminal Warehouse (CEAGESP). Map developed by Instituto Escolhas andUrbem. Fruits sold at the ETSP, according to the city of origin-Brazil, January-December 2019. Map developed byIns�tuto Escolhas andUrbem Data source: CEAGESP (2019). Origin ofCEAGESPproducts:Fruits Tons permunicipality Key Figur a 18-Frut Municipali�es State Borders Br 500 250 100 0 segundo municípiodeorig - 100 asil, Janeir - 1000 - 500 - 250 as c o-De omer z embr cializ 50000 -79949 10000 1000 adas noET o 1 :110.000 , 2019 1 :300.000

- 10000 em

- 50000 esc sc ala ale

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Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo Data source: CEAGESP (2019). Mapdeveloped by Instituto Escolhas andUrbem Legumes sold at the ETSP, according to the city of origin-Brazil, January-December 2019. Map developed byIns�tuto Escolhas andUrbem Data source: CEAGESP(2019). Origin ofCEAGESPproducts:Legumes Municipali�es Key Municipali�es State Borders 0 500 100 250 - 100 - 1000 - 250 - 500 10000 1000 50000 -132965 1 :110.000 1 : 300.000

- 10000

- 50000 esc sc ala ale

N N 16

Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo Data source: CEAGESP (2019). Mapdeveloped by Instituto Escolhas andUrbem Map developed byIns�tuto Escolhas andUrbem. Data source: CEAGESP (2019). Origin ofCEAGESPproducts:vegetables Tons permunicipality Key Vegetables sold at the ETSP, according to the city of origin -Brazil, January-December, 2019. Municipali�es State Borders 0 500 100 250 - 100 - 1000 - 250 - 500 1000 10000 50000 -78674 1 :110.000 1 :300.000

- 10000

- 50000 esc sc ala ale

N N Map developed byIns�tuto Escolhas andUrbem. Data source: CEAGESP (2019). Origin ofCEAGESPproducts:vegetables Tons permunicipality Key Municipali�es State Borders 0 500 100 250 - 100 - 1000 - 250 - 500 1000 10000 50000 -78674 1 :110.000 1 :300.000

- 10000

- 50000 esc sc ala ale

N N Map developed byIns�tuto Escolhas andUrbem. Data source: CEAGESP(2019). Origin ofCEAGESPproducts:Vegetables Administra�ve limits Tons permunicipality Key ETSP, accordingtothecityoforigin Brazil, January-December, 2019 Municipali�es Macrometropolis ofSãoPaulo 500 250 100 0 - 100 - 1000 - 500 - 250 Vegetables soldatthe 50000 -78674 10000 1000 1 :110.000 1 :110.000

- 10000

esc - 50000 sc ala ale

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Instituto Escolhas Closer than you think: the challenges for food production in the metropolis of São Paulo

18 The impact of the pandemic on the system Similar to the truckers’ strike that took place in Brazil in 2018, the pandemic once again proved the fragility of the long circuit model for the RMSP food marketing and distribution system, particularly with the many changes affecting the production chain. Food prices rose steeply Instituto Escolhas at the beginning of the quarantine and producers’ sales plummeted 70% in the first two weeks.

This is partly justified by the inherent complexity of this type of circuit. In the context of uncertainty established in March 2020, the closure of restaurants, the drop in demand for fresh and perishable products, the reduction in public procurement and the suspension of open-air fresh food markets generated significant losses for producers and distribution centers dealing with large volumes.

On the other hand, the short circuits and their transport of small crops suffered less impact. Quickly, producers all over the country discovered that the supply of ready- made baskets and home delivery were a safe way to retail their products. The demand grew, especially for organic food, which is associated with better nutrition and the “increased immunity”.

A tractor destroys a coriander plantation at Hagio Farm in Jundiapeba region. With restaurants closures, producers are hard pressed to find buyers - Zanone Fraissat/Folhapress/ Closer than you think: the challenges for food production in the metropolis São of Paulo (hired or family). or (hired have no income limit or specific of type labor employee metropolis are for non-family farming, that is, farms that The other 35% of agricultural establishments in the (upwards of R$ 360k). Pronaf V(between R$ 20k –360k) and Non-Pronaf according to family income: Pronaf*B (up to R$ 20k), Also, according to IBGE, family farming subdivided be can establishment’s activities. farming who obtain at least half of their income from the More than half of the workforce must family be members, ha),38 strict under family and management. four fiscal modules (in the RMSP, this equals up to 20 ha or farming establishments are all those with an area of up to farming. According to IBGE’s Agricultural Census, family 65% of the establishments in the RMSP are family-based production. In total, the two segments account for 5% of all national When added to floriculture, this percentage reaches 77%. in horticulture, which comprises 63.5% of all production. Statistics show that farming in the RMSP is specialized Production * Pronaf =National Program for Strengthening Family Farming. 19

Instituto Escolhas Closer than you think: the challenges for food production in the metropolis of São Paulo

20 Number of establishments per economic activity, according to the type of agriculture – RMSP, 2017. Main products composing the horticulture GPV - RMSP, 2017.

60 138 146 164 172 178 103 Instituto Escolhas Lettuce 458 433 Mushrooms Collard greens 1306 Spinach 890 782 Cabbage Coriander Broccoli Non-Family Family Farming Family Farming Chives Farming Pronaf B Pronaf V Rocket Seedlings Cauliflower Other (native forests, seeds and seedlings, fishing) Parsley Aquaculture Other Temporary crops Permanent crops Planted Forests Livestock and other animals Horticulture and floriculture Almost ¼ of the production is lettuce, and another quarter corresponds to the production of collard greens and mushrooms. This specialization is reflected in the national market, for which RMSP provides 52% of mushrooms, 52% of spinach, 16% of collard greens, 10% of cabbage and 9% of the lettuce The establishments dedicated to horticulture and floriculture in RMSP are on produced in the whole of Brazil. average 9 hectares large (relatively small if compared to the national average and that of São Paulo state, which is around 25 hectares). Closer than you think: the challenges for food production in the metropolis São of Paulo Distributionestablishments,of andarea accordingofRMSP, to agriculture type – 2017. represented across all brackets. income bracket. At the same time, the latter are the only of types farmers income brackets, and that only non-family farming reaches the highest demonstrates how the Pronaf Bfarmer group is restricted to the first three About 75% of GPV is concentrated in 15% of establishments. The graph (5,083) establishments number of Family Farming–Non-Pronaf Family Farming–PronafB Family Farming–PronafV Non-Family Farming 35% 32% 32% 01% (123,459 ha) establishments area of 88% 05% 06% 00% Distribution of establishments by production value group, according to oftype agriculture –RMSP, 2017. Non-Family Farming From 25,000tolessthan50,000 From 100,000tolessthan500,000 500,000 andmore From 50,000tolessthan100,000 09% 08% 10% 10% 19% 21% 1 1% Family Farming Pronaf B 39% 28% 21% Greater than0andless5,000 From 5,000tolessthan10,000 From 10,000tolessthan25,000 Family Farming Pronaf V 30% 32% 23% 13% 21

Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo Location of EAs andparticipation of municipalities inRMSP’s GPV -2017. Map developed by Instituto Escolhas andUrbem. State of SãoPaulo, Secretariat of Agriculture andSupply. Data Source: Census Survey of the Agricultural Production Units of the GPV of theRMSP, 2017 and municipalities’participation inthe Location ofAgricultural Establishments Par�cipa�on ofmunicipali�es in RMSP'sGPV Administra�ve limits Key Map developed by Ins�tuto andUrbem. Escolhas andSupplyof Agriculture (2016/2017). Produc�on Paulo,Secretariat ofthe StateofSão Source: Census Surveyofthe UnitsofAgricultural 1 Agricultural Establishments 35% 10 5 2 Metropolitan Region ofSãoPaulo - 2% - 10% - 5% - 30% 1 :110.000 1 :110.000 esc sc ala ale

N N 22

Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo On the basis of combining pre-existing quantitative and qualitative data, as well as mapping the cases, study identified nine different of types agriculture in the RMSP. Different formats, different challenges Community Gardens Productive backyards Institutional vegetablegardening Typology Vertical urban farming Multifunctional urban agriculture Multifunctional agriculture Commercial family farming commercial agriculture Small-scale commercial agriculture Medium andlarge-scale outside theurban fabric On thefringes or urban fabric Within the Location educational andcommunity- Commercial andhousehold Commercial andhousehold Household consumption, based activities, Main function consumption consumption Commercial Commercial (primarily) activism Market insertion and Medium, circuits short Medium, circuits short marketing methods Mostly longcircuits High, circuits short in themarket Not present High, Employment of Extremely high technologies High Low Low Low Smallholdings andsmall- Smallholdings andsmall- large-scale properties scale properties scale properties establishment garden beds, Gardens and Medium and public areas Urban lots Urban lots Scale of Cattle breeding, Horticulture, Horticulture, Horticulture Horticulture Horticulture Horticulture production Small-scale Production husbandry Livestock animal forest, Main institutional, Community, labor force volunteers hired and Family > Family > Family > Hired > Hired > Family Family Hired Hired Hired Hired Main 23

Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo Four cases to understand UPA in the RMSP Case 3 Case 1 Case Multifunctional agriculture large-scale and Medium agriculture commercial Case 4 Case 2 Case Multifunctional urban agriculture familyCommercial farming 24

Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo 6 EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) isameasure of abusiness’ ability to generate cash. Case 1 Case Economic feasibility: critical channels: Marketing Workforce: Management: greens, chard and cabbage). watercress), with the addition of brassica (collard scale, mainly vegetables leafy (lettuce, rocket, and Production: Area: Productive Total Area: Location: large-scale and Medium agriculture commercial Embu-Guaçu peri-urban area 40 ha 40 56 hired employees hired 56 11 species 11 cultivated on acommercial conventional (field hydroponics) and 10.8 ha CEAGESP supermarkets and expenses correspond to 20% of net revenue. Overall, we conclude can that the operating profit (EBITDA selling price is defined by the market. Production costs consume 75% of net revenue and commercial and administrative demands high investment in personnel and equipment to ensure permanent demand in acompetitive scenario, in which the depreciation costs or growing expenses with inputs. Moreover, the focus on greens leafy -especially hydroponic lettuce - supermarkets every day of the year. Although the activity generate does positive operating profit, it not does exceed Located in aperi-urban area, this participates property in long marketing circuits, selling products to CEAGESP and The high cost of conventional production and marketing other interlocutors in the sector –is the difficulty of carrying out the generational succession of the business. vulnerable to urban expansion. An additional element –not identified in this particular Case though 1, it was reported by Producers in similar scenarios, in addition to being poorly resilient to weather events and demand shocks, are also any structural transformation difficult, such that as of converting to organic management. some change is necessary, however the volume of capital invested and the operational model already in place would make The farmer claims he has seen input costs increase over time, while his product prices have stagnated. He understands that Source: developed by Instituto Escolhas andUrbem does notdoes exceed the depreciation costs. Operational Profit (-) Commercial and Administrative Expenses Profit Gross (-) Production Costs Variable (-) Depreciation EBITDA Net Revenue Consolidated Result -Case 1 R$/ha/year 402,082 -300,678 101,404 -86,226 -18,076 -33,255 15,178 % Revenue 100.0% 25.2% -74.8% -21.4% -4.5% -8.3% 3.8% 6 ) is positive but, R$/unit -0.03 -0.06 -0.56 -0.16 0.03 0.74 0.19 25

Instituto Escolhas – derive from themanagement of organic elements, which are available innature. cases, theinputs –acquired from specialized companies orproduced directly ontheproperty Closer than you think: the challenges for food production in the metropolis São of Paulo 7 While in C1, industrialized inputs suchasfertilizers andchemical pesticides predominate, inother Case 2 Case Economic feasibility: criticism in the early years channels: Marketing care of the establishment by themselves Workforce: Management: (carrot, radish), and beet others. among greens, cauliflower, broccoli and cabbage), roots escarole, spinach, watercress), and (collard brassica scale, including vegetables leafy (lettuce, rocket, Production: Area: Productive Total Area: Location: familyCommercial farming Itapecerica da peri-urban Serra Itapecerica area 8.5 ha 8.5 family members, the two farmers take 17 species cultivated on acommercial organic (in conversion) 0.25 ha 0.25 produce market agricultural inputs agricultural This area will need 3to 5years of agroecological management until the soil fertile becomes again and requires less Analyzing organics Source: developed by Instituto Escolhas andUrbem managerial learning). financial viability (expected after the soil fertility gain and cost reduction with inputs, combined with technical and as the high volume of infrastructure investments made during the initial business phase, are critical points for achieving The low level management processes adopted, resulting from the farmers’ little experience in this specific sector, as well channel, the producer still has not obtained areturn on the capital invested. the trust relationships he established in his circuit. short Even with the high price premium of acommercially advantageous Operational Profit (-) Depreciation Variable EBITDA (-) Commercial and Administrative Expenses Profit Gross (-) Production Costs Net Revenue Consolidated Result -Case 2 7 . In the meantime, the owner already markets his products with the added value of organics thanks to R$/ha/year -250,220 354,348 -99,445 -178,421 175,927 -74,293 -25,152 % Revenue 100.0% -21.0% -28.1% -50.4% 49.6% -70.6% -7.1% R$/unit -1.48 -2.66 -0.37 -3.72 2.62 5.27 -1.11 26

Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo Case 3 Case land without financial contribution. Economic feasibility: price premiums to and access (PNAE). (PAA) and the National School Feeding Program programs, such as the Food Acquisition Program the settlement’s production to public procurement and sale to the local cooperative, which in turn targets channels: Marketing the establishment by themselves Labor: Management: (carrot and beet) are the main ones. rocket, among others), collard greens and roots commercialization. vegetables Leafy (such lettuce, as Production Area: Productive Total Area: Cruzes das Location: Multifunctional agriculture family members, the two farmers take care of settlement in settlement the peri-urban area of Mogi 0.75 ha 0.75 : 47 crops, of which 15 are for organic 0.4 ha 0.4 open-air fresh food markets Source: developed by Instituto Escolhas andUrbem Variable Net Revenue Operational Profit (-) Production Costs (-) Depreciation EBITDA (-) Commercial and Administrative Expenses Profit Gross Consolidated Result -Case 3 R$/ha/year 189,740 10,490 -97,483 92,257 -81,767 -3,530 6,960 % Revenue 100.0% 48.6% -43.1% -51.4% 5.5% -1.9% 3.7% R$/unit -0.06 3.46 -1.49 -1.78 0.19 0.13 1.68 27

Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo Case 4 Case and access toand access land without financial contribution. Economic feasibility: price premiums food institutes for resale. and asmall portion is sold directly to restaurants and channels: Marketing labor temporary Labor: Management: organic others.among (collard greens and broccoli), pumpkins, beet, banana, vegetables (lettuce, rocket, and escarole), brassica Production: Area: Productive Total Area: urban area of the São Paulo municipality Location: Multifunctional urban agriculture family members, two people, with the hiring of under power transmission lines in the 0.6 ha 0.6 50 different 50 crops, including leafy 0.4 ha 0.4 open-air fresh food markets procurement programs, such as the PNAE and PAA. to being of circuits, apart short participates C3 in public livelihood and there is no ambition to upscale. In addition deteriorated, however the main goal is maintaining family if the profit margin is low. The infrastructure is basic or the farmer’s income, which is considered satisfactory even commercial administrative and correspond expenses to In both and C4, alarge C3 of part production costs and Price premium to and access land Source: developed by Instituto Escolhas andUrbem Variable Net Revenue Gross Profit Gross (-) Production Costs Operational Profit (-) Depreciation EBITDA (-) Commercial and Administrative Expenses Consolidated Result -Case 4 Case 3 Case R$/ha/year 235,218 -85,950 -137,197 98,021 12,071 -2,850 9,221 does notdoes count as production costs. not have financial outlay for using the land, therefore it to organic support and family farming, and 2) farmers did organic markets, namely because their clientele are willing in C2, their products are sold above the price of larger scale The viability is of based and C4 on C3 two differentials: 1) as Case 4 Case % Revenue 100.0% -58.3% -36.5% 41.7% 3.9% -1.2% 5.1% R$/unit -0.04 3.09 0.16 -1.81 -1.13 0.12 1.29 28

Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo existent production loss. lies in minimal water consumption and almost non- specializedand labor. Environmentally, the advantage concentrated rental consumption, in energy property On the other hand, costs are also high and the final consumer. grams150 package costs between 9and 10 reais for consumption, the products have high added value: a Marketed in closed that bags are already ready for vegetables,leafy microgreens. mainly and lettuces processes and inputs. These farms are restricted to high for its size. This is aresult of total control of The productivity of avertical farm is relatively using this model in the RMSP. arranged trays. The study identified two enterprises they employ hydroponic management in vertically because are farms thus named areas, these urban low incidence of sunlight. Generally located in central countries where there is limited available land and a enclosed spaces. The model was imported from that not does use pesticides, and which occupies The vertical urban farm is aproduction model Vertical farms Vertical farm producing leafy vegetables. Photo: Aisyaqilumaranas. 29

Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo the mentioned cases above. These simulations are designed to further the investigation on the operational and economic viability of UPA in the RMSP. Below are two economic and financial simulations of “model properties” in the peri-urban and urban contexts, which are based on data collected during the mapping and analysis phases for Hypothetical models and their possibilities Investment Variable Management Expenses Variable Logistic Expenses Operational Cost: application of inputs year Total capacity of use of garden beds/ Efficiency -operational workforce Commercialization Allotted location Management Total area Production area Premise Modeling premises: model C5 vs. C6model (edited). Approx. R$220k (complete and with new equipment). (approx. R$90k /year). Complete expenses, considering proper business management distance. Added to thefixed cost (pro-labore entrepreneur). 12.5%: considers active retail distribution, with greater potential Reduction over time:evolution insoil fertility. and transitions between crops following arough schedule. Approx. 70%: considers highpotential use, with theoperations 80%: field team hired according to yearly peak activity period For organic products distributor Parelheiros District, rural area of themunicipality of SãoPaulo Organic 4.5 hectares (45,000m²) 2 hectares (20,000m²) Model C5-smallcommercial agriculture Approx. R$45k (moderate and with used equipment). and to ensure organization (approx. R$23k /year). Moderate expenses, with minimum remuneration for theproducer Added to thefixed cost (pro-labore entrepreneur). 2%: considers local distribution and/or sale onown property. of modification. Maintenance over time:starting pointisurban soil with ahighdegree need to perform commercial andadministrative tasks. Approx. 60%:considers thattheuse of thearea is reduced by the time between management and logistic activities 40%: operation carried outby producer himself, who also divides For final consumer District of SãoMateus, urban area of thecity of SãoPaulo Organic 0.45 hectares (4,500m²) 0.2 hectares (2,000m²) Model C6-multifunctionalurban agriculture 30

Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo than the value of the land in the region. The study’s investigation identifies the of models that: the retailer, who inturnsells itfor $R4to thefinalconsumer. Intheconventional chain, prices fall to R$0,5, R$1and2, respectively. 9 8 90% price90% premium on top of the current distributor table. To ensure financial viability, it to would add necessary a be intermediaries. chain production organic cash flow, and is not subject to the current amount paid by exceeds the initial period of high investments and negative on ascaled-up commercialization scheme, as long as it option, with the potential to offer asustainable return model C5 The model organic distributors’organic both at present value. That is, only by doubling the current obtain areturn on the current value of the land, considering This percentage would need to reach 100% in order to The pricingpolicy isthesame asthatpracticed intheorganic production anddistribution chain: the farmer sells theproduct for R$1to thedistributor, who sells itfor R$2to The modeling exercise uses apricingpolicy developed onthebasis of some of themainorganic distribution companies’ pricingtables within thestate of SãoPaulo. proves to an be attractive investment 9 price the can business worth be more 8

in the property. of the productive area and a narrow margin for investments administrative activities. The result is alimited exploitation energy, as they must take care of all commercial and must consider that this format demands all the producer’s institutional buyers, such as public venues). However, we at fresh food markets, by home delivery or to nearby work, as long as he sells directly to the consumer (either has abetter chance of being properly remunerated for his C6 The model shows that the multifunctional producer 31

Instituto Escolhas the municipality. the total number of families benefiting from the program in Família government subsidy in the district, and about 5% of to 1.5x the families currently benefiting from the Bolsa (24,000) of this land occupation agricultural corresponds The number of families that could benefit from the in the district of Sapopemba (municipality of São Paulo). people. This is equivalent to the current area of vacant land people ayear with horticultural products and employ 1,000 200 hectares has the potential to supply around 80,000 The C6 model of multifunctional urban agriculture in Closer than you think: the challenges for food production in the metropolis São of Paulo 174,300 hectares agriculture and pastures mapped in the RMSP, which total This expansion is possible within the mosaic areas of which include forest vegetation and preservation areas. production units (C5) in atotal area of hectares, 136,500 The simulation considers 30,000 peri-urban model RMSP) and create approximately 180,000 jobs. nearly 20 million people (close to the total population of the the potential to annually supply legumes and vegetables to applied to 60,000 hectares of cultivated area, it would have If the C5 model of small-scale commercial agriculture were The potential of UrbanandPeri-urban Agriculture 10 . and peri-urban agriculture. peri-urban and of urban potential the understanding exercise an serve as they do in of territory, RMSP uses possible all not depict do scenarios these While peri-urban (30%) model (15%). model urban and Marketing chain were losses accounted for in both cases: the production of unit, each model converted into portions. meal Both calculations were made from the average annual 10 Source: Projeto MapBiomas–Coleção 5daSérie Annual deMapas deCobertura eUso deSolo doBrasil, 2019. 32

Instituto Escolhas Closer than you think: the challenges for food production in the metropolis São of Paulo How can we structure a sustainable andresilient food system in the metropolis? Recommendations indicated by the study demanded by theconversion process. financial contribution for thehighinitialinvestment access to specificlines of credit could enablethenecessary embrace thetransition to organic management. Increased for agreater numberof agricultural establishments to fundamental for creating thenecessary economic conditions as between municipalities andthestate government, are could also facilitate fairer remuneration for allinvolved. distribution of product value alongthemarketing chain– and transport procedures, as well asamore equitable measures –suchasreviewing andcorrecting logistics marketing chainby purchasing directly from farmers. Other contribute to reducing thenumber of intermediaries inthe profitability of local agriculture. the rate of losses pertaining to transport andincreasing the enabling themarketing chainto beshortened, thusreducing purchase channelsfor farmers andfarmers’ associations, Partnerships between municipalities, as well Private buyers, suchasretail chains, could The publicadministration could increase direct managerial skills. seeking to develop theirtechnical-agricultural and are two relevant government bodies for assisting farmers Agricultural Houses of themunicipalities of theRMSP Agriculture andSupply of theState of SãoPaulo andthe Assistance Coordination (CATI) of theSecretariat of can also facilitate product processing. together, which reduces production costs. These collectives scale collectively andacquire more inputs andequipment they joinforces thenthey can expand theircommercial transmission lines orareas without specificpublicusage. hand, could bestimulated by granting areas underpower to obtaining financing. Urban agriculture, ontheother facilitate access to land, eliminatingoneof thebarriers and Agrarian Reform (INCRA) property registry, could Registry (CAR) andtheNationalInstitute for Colonization properties, when based ontheupdated Rural Environmental Entities suchastheIntegral Technical Since most producers are small-scale, if The regularization of peri-urban agricultural food systems intheRMSP. contribution to implementingmore sustainable andresilient considerably expand urban andperi-urban agriculture’s could ensure economic andenvironmental advances, and master plansandurban zoning, thepublicadministration recommendations andtheproper integration of UPA in these recommendations, combined with previous By implementingandstrengthening 33

Instituto Escolhas Photo: Leandro Cizotto Follow Instituto Escolhas tion-Noncommercial 4.0 International License. This work islicensed underaCreative Commons Attribu- Creative Commons License www.escolhas.org Cover photo: Sevgi Karakas Graphic design: Brazz Design TextFerreira editing:CinthiaSento SéandJaqueline Editorial coordination:Ferreira CinthiaSento SéandJaqueline Lead organization: Instituto Escolhas production inthemetropolis of SãoPaulo Title: ISBN number:978-65-86405-05-7 http://escolhas.org/biblioteca/estudos-instituto-escolhas/ See thecomplete study at: Closer than you think:thechallenges for food @_Choices

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Instituto Escolhas Mais perto se do que imagina: os desafios da produçãode alimentos na metrópolede São Paulo biodiversidade por meio de leis específicas. leis de meio biodiversidade por empregabilidade,essa cada país busca proteger sua sobre transmissão de alguns tipos de doença. Por toda epidemiológico,campo contribuindo estudo o com Amostras da biodiversidade no usadas são também renováveis. cosméticos enovas tecnologias para fontes de energia produção de medicamentos, alimentos industrializados, (CTA). pesquisas Essas podem, por exemplo, resultar na genético (PG) conhecimento ao e tradicional associado tecnológico realizados apartir ao do acesso patrimônio importante papel nas pesquisas eno desenvolvimento coletivo,Considerada bem um biodiversidade a tem um mundo viável às gerações futuras. de garantir apreservação da biodiversidade para um mitigar os efeitos das mudanças climáticas com oobjetivo paísesvêmOs formas últimas nas de buscando décadas CENÁRIOO Principais números ABCdesign 2011 URBEM www.escolhas.org Realization: Partnership: Support: main version Logo U AkzidenzGroteskCY-Super logo isbasedonthefont 00_URBEM_Logo.eps R

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