3 – a survey of current conditions in the town

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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.
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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:
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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;
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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
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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
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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.
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● 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).
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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
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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.
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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.
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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.
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● 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.
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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.
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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.
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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).
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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
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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.
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- 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.
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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.
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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
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•
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
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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.
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