World Bank supports sustainable development of family farming in Mato Grosso, Brazil

The US$100 million project aims to address key challenges that family farming faces in Mato Grosso: low integration into competitive value chains, vulnerability to climate change, impacts of forest degradation and deforestation, and limited knowledge, capacity, and access to finance for on-farm improvements that could help them address these challenges. The project will benefit family farmers and their respective producer organizations.

Located in west-central Brazil and mostly covered with Amazon rainforest, wetlands and savanna plains (i.e. Cerrado), Mato Grosso plays a significant role in the national economy. In addition to being the third largest state by area (903,357 km2) and home to about 3.6 million people (1.7 percent of the Brazilian population), it contributes about an eighth of Brazil’s national agriculture Gross Domestic Product (GDP). Within Mato Grosso, agriculture accounted for 21.4 percent of state GDP in 2022. The state’s GDP-per-capita is the third highest among all 27 Brazilian federation units, at about BRL 50,000 (or almost USD 10,000).

River area in the Amazon

Despite the state’s high GDP-per-capita, poverty and inequality within Mato Grosso persist. Rural areas in the state record poverty levels nearly four times those of urban areas (27 percent versus 7 percent, respectively). Income is concentrated in the municipalities that produce export commodities, notably in the Cerrado biome. Indigenous Peoples, Quilombolas (descendants of formerly enslaved people), and other traditional communities are highly represented in poorer rural areas of Mato Grosso, which contain 87 indigenous lands (belonging to more than 44,000 indigenous peoples of different ethnicities), and 71 Quilombola communities. The project, with its focus on boosting opportunities for such groups, as well as women and youth, aims to increase economic inclusion and development.

“In Mato Grosso, most family farmers are not linked to economic, productive, or commercial organizations such as cooperatives and associations. Only a minority participate in domestic markets, with many instead allocating a large portion of production for self-consumption and irregularly trading their surplus,” stated Johannes Zutt, World Bank Country Director for Brazil. “By supporting technological and climate adaptation, this project should help family farmers to achieve higher yields and to integrate their farming activities more fully into local value chains, permanently enhancing their future prosperity.”

The project will be implemented over six years. The total financing consists in an IBRD loan of US$80 million and US$20 million in counterpart funding from the State of Mato Grosso.

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