Regardless of the diversity of family farmer cooperatives in the three regions,11 the cooperatives as
a whole appreciate the PNPB because it offers concrete support and resources for family farmers such as obligatory technical assistance, the provision of seeds, infrastructure improvements and partial income security. The PNPB is preferred over other large government family farmer support
programs, such as the PNAE and the PAA, because it is the only program that offers financial resources through contracts with the biodiesel industry/PBio. To participate in both PNPB/SFS and other governmental family farmer support programs, either DAP individual (farmers) or DAP Juridica (cooperatives) is needed. Although the difficulty in obtaining DAP is sometimes mentioned as an important reason why family farmers do not want to participate in the PNPB (Kilham et al., 2010; e.g., Watanabe et al., 2012), none of the eight cooperatives and none of the interviewed family farmers recognized this as a problem. Obtaining DAP Juridica proved possible, but the need to review DAP Juridica every 1–3 years is perceived as a significant administrative burden by some cooperatives. Individual family farmers indicated that DAP individual can be easily obtained through local rural syndicate offices.
At the start of the PNPB, social movements related to agriculture—and many economics of solidarity cooperatives that originated from these movements—were quite critical of the biodiesel policy. In spite of the SFS, they considered the PNPB to be part of the agribusiness paradigm with major advantages for large-scale agriculture. In addition, they had principal objections against using arable land for fuel instead of food production (e.g., Fernandes et al., 2010). This view dominated the public debate in Bahia in the early years of the PNPB. Cooperatives proved unable and unwilling to convince and organize family farmers around biodiesel feedstock production, in part because the biodiesel policy did not specify the tasks and responsibilities of cooperatives and cooperatives could not function as legal entities in SFS contracts; they were only able to carry out extension services and coordinate the buying of seeds, fertilizers and agricultural equipment. The 2009 policy change enhanced the position and power of cooperatives in biodiesel policy
implementation, resulting in greater membership and improved organizational capacity and professionalization. The PNPB also motivated cooperatives to establish better organizational and collaborative structures to develop a common negotiation strategy with Petrobras. These interactions and joint operations have also increased mutual learning among cooperatives. They are becoming more than just providers of feedstock for the biodiesel industry and providers of technical assistance and services to members. They are professionalizing their buying and selling positions in the market, building storage facilities to have better negotiation positions on the market, constructing and running small factories/presses that help them (and their members) to add value to agricultural products and expanding their services to a broader variety of farm products by including more crops or livestock. This process of growth and institutionalization is paralleled by a stronger market orientation, larger organizations with their own interests, greater financial risks and vulnerability and a growing (financial) dependence of cooperatives on government programs, to the extent that this dependence may undermine long-term stability. Hence, the character of these economics of solidarity cooperatives is beginning to change. Some cooperatives felt that they had to ensure that farmers did not perceive them as extensions of a government agency but continued to see them as organizations that represented the interests of their members.
The challenges cooperatives face in relation to the PNPB are political and financial in nature. The uncertain future of the program and the significant dependence on the SFS pose major challenges. Cooperatives indicated that the sole reason that PBio or any other biodiesel company buys raw material from cooperatives is to obtain SFS. Several cooperatives mentioned concerns that PBio only uses soy for biodiesel production and re-sells the other vegetable oils (castor and palm) with a
and Herrera, 2010: 759). Family farmers are then hardly relevant as raw material producers for biodiesel production but rather are only an entry ticket into the biodiesel market auctions. As soon as the political system changes this SFS/auction entrance requirement, the preferential family farmer position in biofuel feedstock provisioning could be severely undermined.
In addition, most cooperatives are facing financial woes because their low membership fees barely cover organizational costs. By the same token, they are hesitant to increase fees because that could discourage family farmers from becoming members. Although cooperatives are hesitant to impede access for family farmers, recently at least two cooperatives substantially increased their fees, and others are considering doing so. This is necessary to cover increasing financial costs to run and professionalize their cooperatives and to cope with existing internal financial problems. In addition, cooperatives function as a financial buffer between family farmers and PBio. Because the 2009 PNPB reform cooperatives sign market contracts with PBio and receive financial
compensation from PBio for, e.g., extension services, in return, they guarantee a certain harvest output. When the harvest fails and cooperatives cannot satisfy contract requirements, they are placed in a difficult (financial) position, but then PBio also provides (or pays cooperatives or other institutions to provide) technical assistance because of the policy requirement to buy feedstock from (or, better, to have contracts with) family farmers. Nonetheless, cooperatives have argued that to maintain or even expand this system of family farmer social inclusion, more investments (beyond the scope of the PNPB) are needed to improve infrastructure, storage facilities, technical advice and value-adding steps. All cooperatives complained about the lack of support for these additional investments and their inability to obtain bank credit, which hampered them in becoming more professional and better in serving (and expanding) their member bases.