Commercial Financing for Eucalyptus, Brazil, 2007

    Votorantim Celulose e Papel (VCP), a major pulp and paper company in Brazil, was undergoing a significant forestry expansion in the state of Rio Grande do Sul. VCP devised a business model that included the local community as eucalyptus production partners.

    Through VCP's Poupan├ža Florestal (Forest Savings Account) program, the bank ABN AMRO Real provided farmers with financial resources. VCP provided seedlings and technical assistance to plant eucalyptus while committing to buy the timber, after seven years, at a fair price. The Forest Savings Account program is supported by local partnerships with governmental agencies and universities. This case looks at VCP's business model and how it contributed to the socio-economic inclusion of the impoverished rural population.

    Details of farmers' income as well as the number and socioeconomic nature of farmers reached are given. The report outlines the both the programme's successes and its challenges.