Agroecology and Sustainable Rural Development in Pernambuco

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Component 1 – Strengthening Agroecological Family Farming (total estimated cost: US$ 39.47 million; US$ 33.67 million IBRD financing, and US$ 5.8 million counterpart financing). This component will finance: (i) the integration of family farmers, their families and their organizations into value chains and improving their access to markets; and (ii) the dissemination and adoption of agroecological production by beneficiary family farmers, their families and organizations, including strengthening their environmental management and preservation. All financing under this component will support agroecological activities, aiming to strengthen the climate resilience of the beneficiaries through climate change mitigation and adaptation strategies, and towards low-carbon development. Component 1 is linked to Pillar 1 of the MPA as it finances direct support to family farmers to overcome market failures, helping them to adopt new technologies and farming practices. Subcomponent 1.1: Supporting the Implementation of PFSPAs (total estimated cost: US$ 29.81 million; US$ 25.43 million IBRD financing, and US$ 4.38 million counterpart financing). This subcomponent will finance activities included under the PFSPAs for Community Associations (CAs). The implementation of the PFSPAs will support the agroecological transition of family farmers in the region, thus enhancing the adaptation of productive systems to climate change and increasing availability of quality foods that could improve the nutrition status of the beneficiaries. The PMU will oversee the implementation support to the PFSPAs. CAs will submit their PFSPAs for approval, ensuring ownership. This subcomponent will use a demand-driven participatory approach to inform the CAs of the options available regarding agroecological technologies and practices that the CA can then include in their PFSPA. The options of agroecological technologies and practices will be outlined in the POM. This support will contribute to the Private Capital Enabling (PCE) strategy, with an estimated contribution of US$500 thousand. As the inclusion of agroecological practices and technologies in the PFSPAs proposals is an eligibility criterion , all financing under this subcomponent will contribute to climate-resilient and low carbon development outcomes . Every PFSPA under this subcomponent will also include a set of activities for the enhancement of sustainable use of natural resources (including water, soil and biodiversity) by the family farms served. The selection of PFSPAs will prioritize youth, quilombolas, Indigenous People, and traditional communities by offering them differentiated scores and specific calls for proposals for each group. Women will also be offered targeted calls.Subcomponent 1.2 – Supporting the Implementation of Business Plans (BPs) (total estimated cost US$ 1.28 million; US$ 1.09 million IBRD financing, and US$ 190 thousand counterpart financing). This subcomponent will finance the activities included under the BPs of Producer Organizations (POs). Under this subcomponent, the POs will prepare their BPs, which will outline their overall business objective, marketing and growth strategy, and required investments. The type of investments in the BPs to be financed under this subcomponent may include (among other aspects): (i) physical infrastructure (such as processing, storage, and warehouses) , , (ii) marketing and promotion efforts, (iii) purchasing of equipment, and (iv) technical support, advisory services, and training for the successful implementation of the BP . POs will submit their BPs for approval, ensuring ownership and committing to implement counterpart-financed activities. These BPs will be assessed and approved by the Evaluation Committee. This subcomponent will use a demand-driven participatory approach to inform the POs of the options available regarding agroecological technologies and practices that the PO can then include in their BP. This subcomponent will contribute to the Private Capital Enabling (PCE) strategy, with an estimated contribution of US$500 thousand. As indicated for subcomponent 1.1, the selection of BPs in subcomponent 1.2 will also prioritize quilombolas, Indigenous People, and traditional communities with differentiated scores and targeted calls for proposals for each group. Women will also be offered targeted calls .Subcomponent 1.3 – ATER for Agroecological Production (total estimated cost: US$ 8.38 million; US$ 7.15 million IBRD financing, and US$ 1.23 million counterpart financing). This subcomponent will finance: (i) the provision of Agricultural Technical Extension Services (ATER) to enable the design and implementation support of PFSPAs from subcomponent 1.1; (ii) the provision of ATER for the design and implementation support of BPs under subcomponent 1.2; and (iii) the training of ATER specialists of ATER entities. Under this subcomponent, ATER entities will organize the initial community diagnostic process and support CAs and POs in the development of their PFSPAs and BPs. This includes supporting CAs and POs in: (i) agreeing on their development goal for their Plan; (ii) identifying clear marketing goals and strategies, and (iii) identifying the material investments and knowledge needed to strengthen the production systems and implementing their Plans. Once the PFSPA or BP is approved, ATER entities will support CAs and POs in its implementation through any (or all) of the following activities according to the organizational capacity assessment of each CA and PO: (i) fiduciary aspects (including procurement and contracting); (ii) Technical Assistance for general management, governance and administration; (iii) technical assistance on technical , environmental and social risks and knowledge of Plan implementation; (iv) facilitate CAs and POs and their members to access additional sources of financing , services providers, as well as public food purchasing programs (PNAE, PAA) and to create opportunities for integration into value chains; (v) monitor the progress and quality of the Plan's implementation; and (vi) support to share experiences across CAs. ATER services provided under this subcomponent will be detailed in each PFSPA and BP and will be tailored to the organizational capacity of the supported CAs and POs (e.g less structured CAs may benefit from capacity-building in governance and management). The subcomponent will implement training events for ATER entities to enhance their skills and qualifications . Financing under this subcomponent is intended to support investments that improve climate change resilience and mitigation . Component 2 – Enhancing Environmental Practices (total estimated cost: US$ 13.86 million; US$ 11.11 million IBRD financing, and US$ 2.75 million from counterpart financing). This component will support environmental management, by promoting conservation and restoration initiatives, as well as sustainable practices . The activities implemented by the component should contribute to combating degradation and desertification that affects several regions of the state and to mitigating greenhouse gas (GHG) emissions. Component 2 will seek to serve family farmers, including Indigenous People and quilombola communities, land reform settlements and women's agroecological networks. The component is linked to Pillar 2 of the MPA as it will strengthen public goods and services on agricultural and environmental innovation that will lead to farmland under environmentally sustainable management practices.Subcomponent 2.1 – Environmental protection and restoration initiatives (total estimated cost US$ 11.15 million; US$ 8.94 million IBRD financing, and US$ 2.21 million counterpart financing). This subcomponent will finance the preparation and implementation of: (i) Community Environmental Management Plans (CEMPs) benefiting family farmers through Community Associations (CAs), designed to support initiatives for the protection and co