3 – a survey of current conditions in the town
Transcription
3 – a survey of current conditions in the town
3 – A SURVEY OF CURRENT CONDITIONS IN THE TOWN 3.1 – GENERAL DESCRIPTION 3.1.1 – Geography and Logistics The state of Mato Grosso is located in midwestern Brazil, at a latitude between 07°20’39’’S and 18°10’00’’S and a longitude between 50°13’48’’W and 61°31’00’’W. The town of São José do Rio Claro is located in central Mato Grosso, in the Arinos region, at 13º26'48"S 56º43'17"W (see Figure 3.01). The neighboring townships are Nova Mutum (to the east), Nova Maringá and Campo Novo dos Parecis (to the west), Tapurah (to the north), and Diamantino (to the south). The town center sits at an elevation of 350 m. Its highest point, in the Wipichi region, reaches 450 m. Figure 3.01 – Map Showing the Location of São José do Rio Claro, Brazil Source: STCP. 3 – General Description Access to the town is via the MT-010, MT-235, MT-249, and MT-160 highways. São José do Rio Claro is 290 km from Cuiabá on paved roads. The closest towns to São José do Rio Claro are: • Nova Maringá (70 km away), accessed by the MT-160 highway (in the process of being paved) or the MT- 492 and MT-249 highways; • Nova Mutum (100 km away), accessed by the paved MT- 010 and MT-249 highways; • Tapurah (100 km away), accessed by the MT-010 highway (in the process of being paved); • Lucas do Rio Verde (140 km away), accessed by the paved MT-010, MT-249, and BR 163 highways; • Diamantino (130 km away), accessed by the paved MT-010 and BR-364 highways; and • Campo Novo dos Parecis (150 km away), accessed by the paved MT-010 and MT235 highways. The primary highway in the region is BR-163, which runs 70 km from São José do Rio Claro. The BR-163 connects the city of Santarém in Pará state with southern Brazil, and is the route by which most local products are transported to the leading ports of Brazil. Table 3.01 shows the distances between São José do Rio Claro, the leading ports in Brazil (Santos and Paranaguá), and the cities of Brasília and São Paulo. Table 3.01 – Distances between São José do Rio Claro and Various Cities and Ports TOWN DISTANCE (km) SÃO PAULO PARANAGUÁ BRASÍLIA SANTOS São José do Rio Claro 1.924 2.106 1.348 1.976 Nova Mutum 1.896 2.078 1.320 1.948 Lucas do Rio Verde 1.988 2.170 1.412 2.040 Cuiabá 1.634 1.816 1.058 1.686 Source: DNIT. Mato Grosso state is working energetically to meet the logistical challenges in transporting its agricultural products and has so far made significant advances. Given that the primary roads have all been paved, the next step is improving the quality of logistics. An important initiative for paving new roads and improving the condition of paved roads are known as Public-Private Partnerships (PPP), known locally as “PPP Caipiras.” There are no official statistics quantifying the amount of roads paved each year, but progress has been significant. 3.1.2 – Physical Landscape ● Soils The region is underlain by a geomorphology of flat Phanerozoic structures belonging to the Chapada dos Parecis geological formation. The primary soil type in the township are red-yellow oxisols. These are deep or very deep, well-drained, clayey (sometimes very clayey), and acidic (sometimes very acidic) soils. The high-quality physical properties of these soils, together with the flat or gently rolling terrain in the region, make them suitable for cultivating several crops adapted to the regional climate. The soils are limited by high acidity and low chemical fertility, however, and thus require careful management through 2011 © STCP Engenharia de Projetos Ltda. 3.2 3 – General Description acidity correction, the application of fertilizers, and erosion control. As shown in Figure 3.02, red-yellow dystrophic oxisols account for 36.7% of soils in the township, while dark red dystrophic oxisols account for 33.6% and dystrophic quartzose sand accounts for 25.3%. Figure 3.02 – Distribution of Soil Types in São José do Rio Claro Source: STCP ● Climate The town of São José do Rio Claro sits at approximately 350 m above sea level. While high temperatures are typical year-round, temperature can vary greatly within a single day. Mean annual temperature is 24.9°C (76.8° F). Winter minima can reach 15°C (59° F) while summer maxima can hit 40°C (104° F). According to the Köppen classification system, the region has a ‘tropical savanna’ climate (i.e., similar to that of African savannas) characterized by a rainy summer and a dry winter. Between June and September the regional climate is typically dry, with relative humidity of approximately 70% and mean monthly rainfall of approximately 20 mm (see Appendix II). ● Vegetation According to the Brazilian Institute of Geography and Statistics (IBGE), São José do Rio Claro is located in a transitional zone between the Cerrado and Amazonian biomes. The Cerrado is a very diverse vegetation type on tropical savanna soils that are poor in nutrients and rich in iron. Typical Cerrado vegetation consists of small, thick-leaved trees with twisted trunks scattered among sparse understory vegetation, sometimes mixed with open grasslands or groves of medium-sized trees. The Amazonian biome is characterized by dense stands of large, large-leaved trees typical of a warm, wet climate. Three forest types are especially important: i) upland forests with very tall trees, ii) flooded forest in low-lying areas, and iii) floodplain forests with palms, rubber trees, and jatobás, among other large trees. Appendix IV describes the different vegetation types present in Mato Grosso state, with a special emphasis on the area surrounding São José do Rio Claro. 2006 © STCP Engenharia Engenhariade deProjetos ProjetosLtda. Ltda. 2011 3 3.3 3 – General Description ● Hydrography São José do Rio Claro is in the Amazon River watershed. Rivers born in the region include the Arinos, Claro, do Sangue, and Ponte de Pedra. The Arinos River is born in a tableland located in the Serra Azul at roughly 400 m elevation. Over its first 50 km the river descends steeply and is punctuated by waterfalls and rapids, which make navigation difficult. Roughly 710 km farther downstream, it meets the Juruena River, a tributary of the Tapajós River. For most of its approximately 760-km length, the Arinos River descends a gentle gradient of 18 cm/km. It is not considered a navigable river, however, due to various rapids and other obstacles. The Arinos River is the focus of the Matrinxã Festival, an annual event including concerts and other cultural highlights held during the fishing season of the matrinxã, a highly prized Amazonian fish that plays an important role in the regional cuisine. The region’s main smaller rivers are the Caju, Jacamim, Fonseca, Buriti, and Lagoa Rasa. Information on the primary rivers of Mato Grosso state, with a special focus on those in the São José do Rio Claro region, is presented in Appendix III. 3.2 – SOCIOECONOMIC DATA 3.2.1 – Demography The town of São José do Rio Claro has an estimated population of 17,128 according to the most recent IBGE data. Most residents are colonists (and their locally-born children) from southern Brazil, especially Paraná state, and northeastern Brazil. Other residents belong to traditional communities and government-promoted settlements. According to the IBGE, the most populous township in the region is Lucas do Rio Verde, with a population of 45,500, while the least populous is Nova Maringá, with roughly 6,600 residents. Figure 3.03 shows the population sizes of the primary towns in the region. Figure 3.03 – Population Sizes of the Primary Towns in the Region Source: IBGE The mean annual population growth rate in São José do Rio Claro in the period 19962009 was 3.5%. This is one of the lowest rates in the region for that period (Figure 3.04). 2011 © STCP Engenharia de Projetos Ltda. 3.4 3 – General Description Figure 3.04 – Mean Population Growth Rate (1996-2009) Source: IBGE. The population growth rate in São José do Rio Claro is less than half that of the fastestgrowing towns in the region. Figure 3.05 illustrates the population growth of towns in the region in absolute terms. The graph indicates, for example, that in the 1990s the town of Nova Mutum had a smaller population than São José do Rio Claro, but that it overtook its neighbor later in that same decade. Figure 3.05 – Population Growth in Absolute Numbers Source: IBGE. Data on the distribution of age classes in São José do Rio Claro indicate a young population, roughly 45% of which is in the economically active phase (Figure 3.06). Given current demographic trends, which include the birth of 50 children each month (according to the town’s Secretary of Education), the town requires new economic growth to absorb 2006 © STCP Engenharia Engenhariade deProjetos ProjetosLtda. Ltda. 2011 5 3.5 3 – General Description the growing population, a phenomenon known locally as the youth wave. Figure 3.06 – Primary Age Classes Source: IBGE. Figure 3.07 illustrates the scant population density of towns in the region. Population density of São José do Rio Claro is 2.51 people/km², while Nova Maringá has just 0.52 people/km². The highest density is in Lucas do Rio Verde, with 9.17 people/km². Figure 3.07 – Population Density of Towns in the Region of São José do Rio Claro Source: IBGE. No data are available on the relative proportions of urban and rural populations. Official data indicate that the township has three government-sponsored (INCRA) settlements and an association of small-scale rural farmers: • PA-Campinas, with 253 lots; • PA-Santana da Água Limpa, with 370 lots; • PA-Pouso Alegre, with 47 lots, and, • The Jacamim Small Rural Farmers Association, with 29 lots. 2011 © STCP Engenharia de Projetos Ltda. 3.6 3 – General Description Overall it is estimated that approximately 825 families have been settled by the government in São José do Rio Claro. The township is also home to various traditional communities: • Nova Esperança, with 25 families; • Santa Maria, with 40 families; and • Gemada, with 20 families, and Sede, with 40 families. 3.2.2 – Economics The town of São José do Rio Claro has experienced two significant economic cycles, one involving rubber and the other involving timber. Following a regional trend, many farmers established rubber plantations in the early years of the town and for many years rubbertapping was the town’s primary economic activity. In fact, the town was once nicknamed ‘The Capital of Rubber.’ Productivity faltered, however, following the use of low-quality clones in the plantations. During the same period the rubber plantations were established, and for many years after they had declined, extraction of tropical timber was a leading economic activity in the development of São José do Rio Claro. However, increasingly restrictive environmental legislation and the increasing difficulty of obtaining permissions for forestry management led many producers to abandon logging and many sawmills to close. Companies that still work in the forestry sector today have invested in reforestation and in adding value to extracted timber. A more recent economic cycle has been driven by the expansion of agribusiness, especially the cultivation of soybeans, maize, and cotton. Agricultural activity has boomed throughout Mato Grosso due to the suitable soils and flat terrain, which allows a high degree of mechanized farming. While ranching was responsible for much of the initial conversion of forest to pasture, a great deal of that pasture was subsequently replaced by highly productive farmland. Among the array of different economic activities in São José do Rio Claro, agriculture dominates the Cerrado regions (southwestern, central, and southeastern portions of the township) while ranching and forest areas dominate the northern portion. Indeed, the geographic arrangement of the town’s economic activities is perhaps most easily visualized as a triangle. LANDSAT satellite images with a resolution of 30 m indicate that 51.1% of the São José do Rio Claro township retains native vegetation, while 48.7% is a mosaic of agriculture, pasture, and disturbed forest. The urban center accounts for 0.09% of the township. Appendix I provides a map of land use in the township; however, the low quality of the images did not allow for rigorous conclusions. A more detailed study based on higherresolution satellite images and field surveys in rural properties remains a priority. According to IPEA data, the gross domestic product (GDP) of Mato Grosso state in 2007 was approximately R$ 42.7 billion in current values. The GDP of São José do Rio Claro in 2007 was R$ 120.4 million, which represents approximately 0.28% of total state GDP. Neighboring Nova Mutum had a GDP of R$ 512 million, Lucas do Rio Verde R$ 598 million, and Campo Novo do Parecis R$ 578 million; all are higher than São José do Rio Claro. The São José do Rio Claro GDP is most comparable to that of Tapurah (R$ 130 million). Nova Maringá has the lowest GDP in the region: R$ 62 million. Figure 3.08 shows historical trends in the GDP of the region’s towns. 2006 © STCP Engenharia Engenhariade deProjetos ProjetosLtda. Ltda. 2011 7 3.7 3 – General Description Figure 3.08 – Year-to-year GDP of São José do Rio Claro and Neighboring Towns Source: IPEA. São José do Rio Claro has a 3.3% annual growth rate, compared to -14% for Tapurah, 5.8% for Lucas do Rio Verde, 4.4% for Nova Mutum, 4.7% for Nova Maringá, and 3.7% for Campo Novo dos Parecis. When GDP is standardized per capita, São José do Rio Claro shows a value of R$ 6,946, compared to Nova Maringá (R$ 11,214), Tapurah (R$ 12,467), and Lucas do Rio Verde (R$ 19,471). The highest per capita GDP’s are held by Campo Novo do Parecis and Nova Mutum, with R$ 25,900 and R$ 21,014, respectively. The Human Development Index (HDI) score of São José do Rio Claro is 0.75, which is very similar to the statewide score of 0.79. Regionally, the town outranks Nova Maringá (0.74). Information on the GDP and HDI of regional towns is provided in Table 3.02. Table 3.02 – Summary of Socioeconomic Indicators HDI GDP (Million R$) Per capita GDP (R$) São José do Rio Claro 0.75 120.5 6,946 Campo Novo do Parecis 0.81 578.1 25,900 Lucas do Rio Verde 0.82 598.6 19,471 Nova Maringá 0.74 62.6 11,214 Nova Mutum 0.80 512.09 21,014 Tapurah 0.78 130.6 12,467 TOWN Sources: IBGE, 2007; IPEA, 2007 Based on comparisons with other towns in the region, these numbers demonstrate that São José do Rio Claro has extensive room for growth, both in terms of economic development and quality of life. 2011 © STCP Engenharia de Projetos Ltda. 3.8 3 – General Description ● Agriculture Agriculture is the most important sector of São José do Rio Claro’s economy, accounting for approximately 44% of municipal GDP (R$ 53 million in 2007). Located in a transition zone between Cerrado and Amazonian forest, the region is underlain by soils that are suitable for various types of agriculture. The primary crops currently grown in the township are: (i) soybeans, (ii) corn, and (iii) sugarcane. Figure 3.09 – Agricultural Activities in São José do Rio Claro Source: STCP field work, August 2010 It is useful to classify the township’s current crops into two categories: permanent plantations and temporary crops. The most important permanent plantations are rubber plantations. There are currently an estimated 4,000 hectares of rubber plantations in the township, but not all of them are active (i.e., currently producing latex). According to the IBGE, these plantations’ annual production is worth roughly R$ 2.8 million, compared to just R$ 214,000 for other permanent plantations (coconuts, oranges, lemons, pepper, and tangerines; Figure 3.10). Figure 3.10 – Production of Permanent Plantations in 2009 in São José do Rio Claro Sources: IBGE Historical trends in the production of permanent crops in São José do Rio Claro confirm a higher production of rubber there compared to other crops. Figure 3.11 shows the variation in latex production over recent years and highlights the stability of the production volume. In other words, there are no clear growth trends for rubber and the value of its production has oscillated within a relatively narrow range for the last several years. 2006 © STCP Engenharia Engenhariade deProjetos ProjetosLtda. Ltda. 2011 9 3.9 3 – General Description Figure 3.11 – Historical Trends of Rubber Production in São José do Rio Claro Source: IBGE. Because of the town’s flat terrain and suitable soils, most of its agricultural income comes from temporary crops, mainly cotton, sugarcane, maize, and soybeans. These are typically planted in the Cerrado regions. Over the last ten years São José do Rio Claro has seen an explosive increase in soybean production in the region. Soybean production has outrun that of other crops since 2001, posting an annual growth rate of 21%. Other crops have also shown high rates of annual growth. Cotton production has grown by 29%, followed by manioc (24%), maize (21%), and sugarcane (16%). By contrast, rice has seen negative growth on the order of -5% (Figure 3.12). Figure 3.12 – Historical Trends of Crop Production in São José do Rio Claro Source: IBGE, 2007 (most recent available data) ● Forestry According to the land use survey, 303,000 of São José do Rio Claro’s 510,000 hectares are covered by forest, and this is mostly native forest. Most of the remainder (206,000 hectares) consists of pasture and croplands. IBGE data on the township’s forest areas indicate that roughly 146,000 hectares are managed for timber extraction. 2011 © STCP Engenharia de Projetos Ltda. 3.10 3 – General Description The IBGE data also show that 16.868 m³ of firewood were produced in the township in 2007, with an estimated value of R$ 337,000. In addition, 420 m³ of roundwood were produced, valued at R$ 57,000. Observations made during the field survey carried out by STCP, however, suggest that these figures are serious underestimates. Most locally produced firewood is used to satisfy existing demand in the region (e.g., to dry soybeans). Roundwood is sold for various uses, both to regional sawmills and to companies that transform the timber into value-added products. While the most important forestry plantations are teak and eucalyptus, it is not yet possible to specify the precise area currently under plantations in the township. There are concerns regarding the increasing difficulty of obtaining approval for sustainable forestry management plans and the declining availability of commercially valuable species. ● Animal Production There are approximately 231,241 head of cattle and poultry in the township, according to 2010 INDEA data, including 115,244 head of poultry and 109,290 head of cattle. There are also 1,707 pigs and 1,752 dairy cows. Apart from the cattle, pigs, and chickens, the remaining domesticated animals are primarily raised for local demand (Figure 3.13). Figure 3.13 – Animal Production in São José do Rio Claro Source: INDEA (Mato Grosso Institute of Agriculture and Animal Production, 2010) Historic trends in animal production in São José do Rio Claro (Figure 3.14) indicate the clear dominance of cattle and chickens in the region. Even more striking is the significant growth in poultry production in the township, which shows annual growth rates of approximately 11%. Cattle ranching had traditionally dominated animal production in the township, but the opening of the SADIA factory in Lucas do Rio Verde in 2003 has pushed poultry production ahead of cattle in absolute animal numbers. 2006 © STCP Engenharia Engenhariade deProjetos ProjetosLtda. Ltda. 2011 11 3.11 3 – General Description Figure 3.14 – Historical Trends in Animal Production in São José do Rio Claro Source: IBGE According to IBGE and IPEA data, the growth rates analyzed from 2000 to the present are especially promising for three sectors: i) cattle ranching, with an annual growth rate of 5.0%, ii) aviculture, with annual growth of 43.3%, and iii) sheep ranching, with annual growth of 10%. Between 2008 (Figure 3.14 with IBGE data) and 2010 (Figure 3.13 with INDEA data), the poultry flock suffered a significant reduction in the number of animals, which interrupted the growth trend that started in 2003. According to the APROVALE association, rural farmers anticipate that swine production will grow in coming years because it offers high returns for added-value products. Swine gain weight faster than poultry, which guarantees higher cash flow throughout the production chain. Investments in swine production in São José do Rio Claro will diversify the township’s economy. ● Industry According to the IBGE, using the added value method, industrial activity in São José do Rio Claro accounted for approximately R$ 23.6 million in 2007. As shown in Figure 3.15, the number of industrial operations established in the town remains small (15), according to a survey carried out together with the municipal government of São José do Rio Claro. However, the industrial sector is responsible for most employment in the town. The LIBRA alcohol distillery is especially important, and at its peak activity during harvest season employs about 1,500 workers, according to the Mato Grosso Syndicate of Sugar-Alcohol Industries (SINDALCOOL). 2011 © STCP Engenharia de Projetos Ltda. 3.12 3 – General Description Figure 3.15 – Number of Industrial Operations Established in São José do Rio Claro Source: Municipal government of São José do Rio Claro, 2010. ● Service Providers and Commerce Of the 735 companies registered in São José do Rio Claro, 407 are service providers and 311 are dedicated to commerce. Together, service providers and commerce account for 97% of locally registered companies and contributed approximately R$ 46.2 million to municipal GDP in 2007, according to the IPEA. Figure 3.16 shows the leading types of services offered in the township. Figure 3.16 – Leading Types of Service Providers in São José do Rio Claro Source: Municipal government of São José do Rio Claro, 2010 Banking infrastructure in the township consists of two banks and a credit cooperative. The banks are Bradesco (agency 0691-2) and Banco do Brasil (agency 3628-5), and the cooperative is Sicredi Ouro Verde (agency 0820). It is not possible to determine at present whether additional banks will be established in the town in the near future. A commonly heard complaint during the field surveys was that procedures for applying for financing from the town’s banks are excessively bureaucratic and time-consuming. Among the commercial companies (i.e., companies that sell products), 69 are small restaurants or bars, 37 are stores selling clothing and accessories, 29 are small 2006 © STCP Engenharia Engenhariade deProjetos ProjetosLtda. Ltda. 2011 13 3.13 3 – General Description supermarkets, 11 sell computers and computer equipment, 9 are variety stores, except for department stores (Figure 3.17). The lack of historical data makes it impossible to identify clear trends regarding commercial companies in São José do Rio Claro. However, there has been an obvious diversification of local commerce and an improvement in local shops over the last 5 years. Figure 3.17 – Leading Types of Commercial Businesses in São José do Rio Claro Source: Municipal government of São José do Rio Claro, 2010 ● Tourism Tourism as an economic activity is an important component of regional development because it has a ripple effect that creates jobs and income throughout the local economy, mobilizes capital, and encourages the growth of small and medium-sized businesses. Three features of São José do Rio Claro have especially notable potential for tourism. - The Cerrado-Amazon Transition This region occupies a transitional area between the Cerrado and Amazonian biomes, and the landscape includes extensive areas of both low, twisted Cerrado vegetation and dense, tall Amazonian forests. These ecosystems are just a few kilometers from each other, and it is easy to visit them both in a short visit. - Sport Fishing São José do Rio Claro hosts one stage of the Mato Grosso State Fishing Championship. While the championship is in town, the town also celebrates the Matrinxã Fishing Festival, which offers residents and visitors a range of foods, drink, and activities including fishing, concerts, and other cultural events. During the event the town offers camping facilities for visitors. 2011 © STCP Engenharia de Projetos Ltda. 3.14 3 – General Description - A Regional Tourism Circuit In addition to the tourist opportunities offered by the State Fishing Championship, São José do Rio Claro also has the potential to be part of a regional tourism circuit that includes various towns in Mato Grosso, such as Nobres. 3.2.3 – Education The town of São José do Rio Claro has 13 elementary schools, middle schools, and high schools: 10 in the urban center and three in rural areas. Of these, 11 are public schools (municipal or state), one is a private school, and one is run by a non-governmental organization. Figure 3.18 shows the municipal public school in São José do Rio Claro that was visited during the field survey. Figure 3.18 – A Municipal Public School in São José do Rio Claro Source: STCP field survey in August 2010 These schools currently have the capacity to teach 3,549 elementary school students: 1,559 in state schools, 1,889 in municipal schools, and 101 in private schools. High schools have a capacity of 945 students: 921 in state public schools and 24 in the private school. The town also has 572 pre-school slots—532 in municipal schools and 40 in private institutions—as well as 100 additional slots provided by a state-municipal partnership called MT-Vestibular. The town also has a school for special-need students (Associação de Pais e Amigos do Excepcional). This school currently teaches 54 students and has excellent infrastructure. Figure 3.19 shows the number of student slots at different educational levels (pre-school, elementary school, and middle school) in São José do Rio Claro, according to data provided by the municipal government. 2006 © STCP Engenharia Engenhariade deProjetos ProjetosLtda. Ltda. 2011 15 3.15 3 – General Description Figure 3.19 – Educational Infrastructure in São José do Rio Claro (% of student slots available) Source: Municipal government of São José do Rio Claro There are various options for university-level education in the town. One is a distancelearning program operated by the Federal University of Mato Gross (NEAD), which offers training courses for elementary school teachers. Other universities with a local presence are Varzea-grandense University, which offers an undergraduate major in Agrobusiness Management and a graduate program in Teacher Training; the University of Cuiabá, which offers undergraduate majors in Accounting, Biology, Administration, and Teacher Training; and EADCOM, which offers courses in Literature and Mathematics. All of the town’s schools currently have or are implementing access to the Internet, and Internet access is available for the general population in libraries and digital education centers. Brazil’s target for 2022 is to have achieved an average score of 6.0 in the Development Index of Primary Education (IDEB) – a value on par with the quality of education in developed countries. In 2009 São José do Rio Claro public schools achieved a score of 5.1, beating the target of 4.2. 3.2.4 – Healthcare In São José do Rio Claro there are currently 13 healthcare establishments: 10 public establishments run by the municipal government and three private establishments. These include just two hospitals, one public and one private, which have 31 hospital beds between them. Figure 3.20 shows the São José do Rio Claro Municipal Hospital, visited during the field survey. 2011 © STCP Engenharia de Projetos Ltda. 3.16 3 – General Description Figure 3.20 – São José do Rio Claro Municipal Hospital Source: STCP field survey, August 2010 Seven clinics attend to the healthcare needs of the general population in São José do Rio Claro. These include one PAM (a municipal-run clinic), four PSF’s (family health clinics), one rural PSF, and the Hospital Rio Médica Assistencial, which accepts Brazil’s national health insurance program (SUS) patients as well as patients of Unimed, Saúde Bradesco, SESI Vida, and other private insurance programs. Patients requiring more complicated medical procedures are either sent to Cuiabá or to the Intermunicipal Health Consortium in Diamantino, which employs a variety of specialists and helps decrease the need for patients to travel long distances for healthcare. 3.2.5 – Government Incentives and Development Programs ● Midwestern Constitutional Finance Fund (FCO) The FCO, established by Brazil’s 1988 constitution, receives 3% of federal government revenue derived from the tax on income and other earnings, and from the tax on industrialized products. The FCO was created with the aim of contributing to the economic and social development of Brazil’s midwestern region by financing fixed investments with or without associated working capital in very small, small, and medium-sized companies. The support provided by the program is intended to establish and modernize ventures in the mineral, industrial, agroindustrial, tourist, economic infrastructure, commercial, and service provider sectors in the midwestern region, or to relocate such ventures to the midwestern region from elsewhere. The FCO also supports large companies through the Worker Support Fund, which offers a special line of credit to finance investment projects with or without associated working capital. Financing covers 100% of the total value of eligible items with an associated working capital of 30% of the amount financed by the FCO, with a grace period of three years and payment horizons that vary depending on the type of investment: • For investments in industrial development and the development of the commercial and service provider sectors, the payment horizon is up to 12 years, including the grace period; • For investments in the development of regional tourism the horizon is up to 12 years, including the grace period. In the case of hotels it is up to 20 years, including a grace period of up to five years; and 2006 © STCP Engenharia Engenhariade deProjetos ProjetosLtda. Ltda. 2011 17 3.17 3 – General Description • For investments in economic infrastructure the horizon is up to 15 years, including a grace period of up to five years. The grace period can be raised to 20 years in the case of large-scale structural ventures that can demonstrate that they are vital for sectors of the economy considered to be of strategic importance to the economic and social development of the midwestern region. The financing fees for FCO resources are given in Table 3.03. Table 3.03 – FCO Financing Fees COMPANY SIZE ANNUAL EFFECTIVE RATE ANNUAL NOMINAL RATE Very small 6.75% 6.55% Small 8.25% 7.95% Medium 9.50% 9.11% 10.00% 9.57% Large Source: Banco do Brasil, 2010 ● Program for the Industrial and Commercial Development of Mato Grosso (PRODEIC) PRODEIC aims to help expand, modernize, and diversify economic activities by offering stimuli for investments, supporting technological innovations for productive areas of the economy, and encouraging increased competitiveness of the state. PRODEIC is funded by income from the ICMS tax. Before a company may send a request for PRODEIC benefits to the State Council of Business Development, it is necessary to confirm that the company satisfies the following conditions: • It must be established or in the process of establishing itself in Mato Grosso; • It must demonstrate that it has no outstanding obligations with the state tax service; • It must demonstrate that it has no outstanding obligations with environmental agencies; and • It must show that it participates in the Primeiro Emprego (First Job) Program. Once a company has received PRODEIC benefits, it must satisfy various other obligations, as follows: • Establish and maintain worker training programs and programs in research and technology development, either directly or in partnership with a third party; • Establish quality control of its products and services; • Increase the competitiveness of its products or services; • Demonstrate the creation of new jobs; • Contribute to improving Mato Grosso’s score on the Human Development Index; and • Establish profit-sharing programs, as established in Federal Law nº 10.101 of 19 December 2000. ● Fund for Industrial and Commercial Development (FUNDEIC) FUNDEIC aims to accelerate the economic development of Mato Grosso state, boost the productivity of established or new companies, and leverage the establishment, modernization, or relocation of business activity in the industrial, commercial, and tourism sectors of the economy. To meet these objectives, FUNDEIC offers financing to very small 2011 © STCP Engenharia de Projetos Ltda. 3.18 3 – General Description and small industrial, commercial, and tourism companies that generate ICMS taxes. Companies interested in applying for FUNDEIC funds must first fill out a preliminary form available on the SICME site and send it to the State Council for Business Development (CEDEM), which will assess the company’s merit for funding. The fund provides up to 80% of the investments as a benefit, charging 6.10% interest with a compliance bonus of on interest in the amortization period, with a grace period of 24 months from the release of funds and repayment of 60 equal and consecutive installments which start after the end of the grace period. ● Mato Grosso Development Plan (MT+20) The primary objective of the MT+20 plan is a decentralization of the state. The plan aims to construct a broad urban network that will promote development in an integrated fashion throughout the state, thereby reducing geographic variation in social and economic indicators. Using ZSEE planning mechanisms (see below) to facilitate management and organization of development initiatives and projects in the state, the MT+20 plan establishes regional plans that define the needs, weaknesses, and potential of each region. Once this has been done, regional plans are implemented in a way that supports the goal of decentralization and helps spur development in all the economic and social areas of each region. ● Socioeconomic and Ecological Zoning (ZSEE) Socioeconomic and Ecological Zoning is a planning and land management tool developed by the State Secretary for Planning and Coordination. It aims to optimize and coordinate public investments and state initiatives for sustainable development, as well as determining the optimal geographical distribution of human occupation and natural resource use in the state. The proposed zoning is based on methods developed by the Secretary of Strategic Programs, an agency overseen by Brazil’s president. Currently only Mato Grosso and Rondônia have proposed zoning schemes for their entire territories based on a complete Socioeconomic and Ecological Diagnosis at that scale. The logic underlying the ZSEE zoning scheme is based on the concept of sustainability, which seeks to maintain a balance between the economic exploitation of natural resources and the maintenance and renovation of those resources, thereby guaranteeing their existence for future generations. Based on this concept, state territory was classified into various zones defined based on physical landscape features (geology, geomorphology, and soils) that only change over very long time periods. Once these zones were defined and detailed studies carried out, ZSEE proposed recommendations for suitable economic uses and interventions for each zone based on its potential, fragility, and vulnerability. The process of determining these recommendations has been concluded and the project is currently undergoing a public discussion phase before its final approval. 2006 © STCP Engenharia Engenhariade deProjetos ProjetosLtda. Ltda. 2011 19 3.19