**4. Identification of issues and opportunities for sustainable socioeconomic development**

In this chapter, we analyze the issues and circumstances that have impeded to date socioeconomic development based on Amazon biodiversity assets to occur in large scale. We point out the major failures in dimensions such as concepts (imagination challenges), knowledge (research and information challenges) and implementation (governance and policy challenges & entrepreneurial capacity failures), and the lack of imagination of the potential of an innovative green economy based on nature that goes beyond the Amazon regional institutions. In the opportunity side, we present a summary of a major review in the scientific and technical literature, which identified more than 200 species of Amazonian plants with known potential to provide raw for an initial low-end bio-economy in the Amazon. Many biodiversity products of the Amazonian flora follow have established value chains. We did qualitative analysis on a sample of it to identify its main characteristics, problems, virtues and bottlenecks. This analysis included selected cases of innovative entrepreneurship leveraging relatively low-end technologies and evaluation of 25 enterprises that markets non-timber products of Amazonian biodiversity. The sample encompasses a range of segments, types, sizes and bio-assets processed.

## **4.1. Conceptual failures for sustainable tropical development**

Future land use change in the Amazon has been modeled [12, 13] for two rather opposed scenarios which lead to very different land cover changes (**Figure 4**). In one of them (the so-called 'Fragmentation' scenario), there is a continuous weakening of strict deforestation control policies successfully implemented from 2005 to 2012 in Brazilian Amazon and expansion of resource-intensive activities leading to agricultural and livestock expansion, resulting in over 50% of the Brazilian Amazon deforested by 2050. That is a scenario quite consistent with a progression in time of the Second Way. The other scenario in **Figure 4** (the so-called 'Sustainability' scenario) calls for continuation and strengthening of the environmental policies to bring deforestation rates close to zero in the near future. It is the land cover change

change for 2010 (left panel) based on PRODES data [14] and projections of two possible scenarios for the Amazon in the future up to 2030 [13]: one of large deforestation (called 'Fragmentation') and one of declining deforestation (called

The economic rationale to protect the tropical forests (The First Way or the 'Sustainability' scenario of **Figure 4**) rests to some degree upon the assumed low costs of maintaining intact forests as carbon storage and carbon sinks as a non-costly way to mitigate climate change in comparison to more expensive alternatives such as switching energy systems to renewable energy. Calculations for Brazil [15] estimate savings up to USD 100 billion/year to 2030 for Brazil to fulfill its NDC commitments to the Paris Accord if deforestation of the Amazon and

reduce national emissions 43% relative to 2005 emissions by 2030 come from land use policy and not from rapidly switching the energy matrix to renewable energy. However, it is clearly short-sighted to view only the carbon pathways as justification to preserve tropical forests. In fact, the Third Way Initiative raises various limitations of such approach (see [2]) and proposes that, in addition to ecosystems services, the economic potential of tropical forests rests

/year and the bulk of its commitment to

) from 2004 to 2017 and map of fraction of land cover

scenario compatible with the Third Way.

**Figure 4.** Annual deforestation rates in Brazilian Amazon (km2

188 Land Use - Assessing the Past, Envisioning the Future

'Sustainability').

Cerrado biomes can become smaller than 4000 km2

on their biological and biomimetic assets to a larger extent.

The challenges to achieving sustainable development in the Amazon can be broadly categorized in three categories, similarly to a conceptual framework laid out for planetary health [16]:


The lack of imagination of the potential of an innovative green economy based on nature is not restricted to the Amazon regional institutions. Economic viability studies for the Amazon of serious institutions such as the World Bank almost completely ignore such potential. For example, recent studies [17] continue to see the value of forest products in an exclusively extractive way and assume very low returns. For example, less than \$10 per year per hectare for non-timber products and just over \$20 for sustainable selective logging. They ignore the concrete case of market success of agroforestry systems such as çaí, with proven annual returns of between \$200 and \$1000 per hectare [18], adding more than \$1 billion annually to the regional economy [19].

combinations of those drivers could lead to a relatively rapid transition to new forest-climate equilibrium with loss 50–60% of the forest over eastern, southern and central Amazon, replaced by degraded savannas and dry forests. The sense of urgency to avert a systemic risk

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The knowledge of nature, accumulated over 3.5 billion years of evolutionary processes, that finds in the Amazonian biodiversity one of its greatest showrooms, is a potentially very large bio-economic asset. The number of molecular substances with specific and usable functions is practically incalculable, since each existing species is itself a biochemical design laboratory. And most species are yet unknown and every 3 days, on average, one new species is discovered [20]. Even though a single substance with a desired function discovered by the study of living things in the Amazon could be biologically synthesized and produced industrially by laboratories to reduce costs or to provide quantities demanded for world consumption, the intrinsic knowledge that generated its form and function was stored in the forest and ready to be copied.

A review carried out in the scientific and technical literature as part of this work identified more than 200 species of Amazonian plants with known potential to provide raw for an initial low-end bio-economy in the Amazon. A reduced listing of the 20 very promising species that have been widely used, integrate local productive chains or show strong potential use in food, cosmetics, perfumery, medicinal, advanced materials and biotechnology have their distribution modeled. The listing includes rosewood (*Aniba rosaeodora*), Brazil nut (*Bertholletia excelsa*), cumaru/tonka (*Dipteryx odorata*), açaí (*Euterpe oleracea*) and rubber tree (*Hevea brasiliensis*) among other. A sample distribution for rosewood in the territory is shown in **Figure 5**. Few of the biological assets of Amazonian biodiversity are known, others are being researched for their nutritional, structural, biochemical and market properties, to become products of

A good example of this transition in the area of food is the açaí fruit of the *Euterpe oleracea* palm, widely and historically consumed only by local populations until the 1990s. From then on, it gained the world for its nutritional and functional qualities and its flavor, even with the operational difficulties of being a fresh, minimally processed fruit transported frozen from the vicinity of the forest to consumer markets elsewhere in Brazil and abroad (e.g., to the US and Japan) [18]. Its botanical genus (*Euterpe*) bears the name of one of the nine muses of Greek mythology, daughter of Zeus, who represents pleasure and happiness, as many consumers of

Like açaí, many of the Amazonian biodiversity foods are traditionally consumed by the local population, with marked flavors and excellent nutritional properties, as well as functional foods and nutraceuticals in many cases. Camu-camu (*Myrciaria dubia* (HBK) McVaugh), for example, has 4 times more vitamin C than acerola [22]; murici (*Byrsonima crassifolia* (L.) Rich.), has excellent antioxidant properties [23], as well as açaí, that reached global markets. In addition to antioxidant activity and being a source of five types of carotenes, taperebá (*Spondias mombin* L.) is a rich source of vitamin A, at the rate of 100 g of fruit corresponding to more

to the Amazon forests must be kept in mind in the search for solutions.

**4.2. Potential of a biodiversity-based bio-economy**

future use.

açaí pulp may well attest.

The intense resource-based agribusiness, mining and hydropower in the Amazon generate wealth and little of that is reinvested to propel health and education improvements within the Amazon beyond what is called for in the licensing process. That is in part due to the regressive taxation system and in part due to historical inefficiencies in investments in public services. For instance, the highest average per capita income region in Pará—annual per capita income of close to R\$50,000—is the iron ore-rich Carajás area, with overall income higher than national average. However, social indicators such as health and education services are no different than other regions of the State of Pará and much lower than national averages. In summary, very little of the wealth remains in the region and improves the wellbeing of the population.

The discourse on sustainability has been allowed to proceed as a sign of the times and to be aligned with global trends starting with the 1992 Earth Summit in Rio and to transmit an international aura of adherence, but in fact the concrete development policies for the Amazon never in fact deviated from the one devised by the military government out of geopolitical concerns: livestock and agricultural occupation to ensure sovereignty and exploitation of minerals, hydropower and fossil fuels as drivers for economic development.

The intense and swift expansion of the Brazilian agriculture frontier in the Amazon resulted not only in the growth of the country's GDP since the 1960s, but also in the rates of tree felling and greenhouse gas emissions—a consequence of conversion of forest landscapes into pasture for cattle raising and agricultural fields for grain production. Some numbers illustrate this human-orchestrated metamorphosis. Since 1997, more than 20 billion trees have been cut in the world's largest rainforest. In 2016, more than half of the 8000 km2 of Amazon deforestation was transformed into new pastures. Currently, beef and dairy farming and production account for 45% of gross Brazilian GHG emissions.

The main public policies responsible for the sharp reduction in deforestation from 2005 to 2014 seem to have already reached their limit, so much so that deforestation has been growing in 2015 and 2016, even in a period of historic economic recession, demonstrating once again the decoupling of deforestation with economic growth, neither when GDP grows nor when GDP shrinks. The underlying reasons for continued land cover change are more complex than simply responding to global markets.

Unfortunately, we may not have a long window of time to change course with respect sustainable pathways for the Amazon. Tipping points not to be transgressed for forest-climate stability are in the horizon. The synergistic effects of land cover and climate changes, and with increased forest fires due to a combination of forest degradation, use of fire in agriculture and droughts, make the risks even greater. Earth system modeling [2] shows that the synergistic combinations of those drivers could lead to a relatively rapid transition to new forest-climate equilibrium with loss 50–60% of the forest over eastern, southern and central Amazon, replaced by degraded savannas and dry forests. The sense of urgency to avert a systemic risk to the Amazon forests must be kept in mind in the search for solutions.

#### **4.2. Potential of a biodiversity-based bio-economy**

The lack of imagination of the potential of an innovative green economy based on nature is not restricted to the Amazon regional institutions. Economic viability studies for the Amazon of serious institutions such as the World Bank almost completely ignore such potential. For example, recent studies [17] continue to see the value of forest products in an exclusively extractive way and assume very low returns. For example, less than \$10 per year per hectare for non-timber products and just over \$20 for sustainable selective logging. They ignore the concrete case of market success of agroforestry systems such as çaí, with proven annual returns of between \$200 and \$1000 per hectare [18], adding more than \$1 billion annually to the regional economy [19]. The intense resource-based agribusiness, mining and hydropower in the Amazon generate wealth and little of that is reinvested to propel health and education improvements within the Amazon beyond what is called for in the licensing process. That is in part due to the regressive taxation system and in part due to historical inefficiencies in investments in public services. For instance, the highest average per capita income region in Pará—annual per capita income of close to R\$50,000—is the iron ore-rich Carajás area, with overall income higher than national average. However, social indicators such as health and education services are no different than other regions of the State of Pará and much lower than national averages. In summary, very little of the wealth remains in the region and improves the wellbeing of the population.

The discourse on sustainability has been allowed to proceed as a sign of the times and to be aligned with global trends starting with the 1992 Earth Summit in Rio and to transmit an international aura of adherence, but in fact the concrete development policies for the Amazon never in fact deviated from the one devised by the military government out of geopolitical concerns: livestock and agricultural occupation to ensure sovereignty and exploitation of

The intense and swift expansion of the Brazilian agriculture frontier in the Amazon resulted not only in the growth of the country's GDP since the 1960s, but also in the rates of tree felling and greenhouse gas emissions—a consequence of conversion of forest landscapes into pasture for cattle raising and agricultural fields for grain production. Some numbers illustrate this human-orchestrated metamorphosis. Since 1997, more than 20 billion trees have been cut

tion was transformed into new pastures. Currently, beef and dairy farming and production

The main public policies responsible for the sharp reduction in deforestation from 2005 to 2014 seem to have already reached their limit, so much so that deforestation has been growing in 2015 and 2016, even in a period of historic economic recession, demonstrating once again the decoupling of deforestation with economic growth, neither when GDP grows nor when GDP shrinks. The underlying reasons for continued land cover change are more complex than

Unfortunately, we may not have a long window of time to change course with respect sustainable pathways for the Amazon. Tipping points not to be transgressed for forest-climate stability are in the horizon. The synergistic effects of land cover and climate changes, and with increased forest fires due to a combination of forest degradation, use of fire in agriculture and droughts, make the risks even greater. Earth system modeling [2] shows that the synergistic

of Amazon deforesta-

minerals, hydropower and fossil fuels as drivers for economic development.

in the world's largest rainforest. In 2016, more than half of the 8000 km2

account for 45% of gross Brazilian GHG emissions.

simply responding to global markets.

190 Land Use - Assessing the Past, Envisioning the Future

The knowledge of nature, accumulated over 3.5 billion years of evolutionary processes, that finds in the Amazonian biodiversity one of its greatest showrooms, is a potentially very large bio-economic asset. The number of molecular substances with specific and usable functions is practically incalculable, since each existing species is itself a biochemical design laboratory. And most species are yet unknown and every 3 days, on average, one new species is discovered [20].

Even though a single substance with a desired function discovered by the study of living things in the Amazon could be biologically synthesized and produced industrially by laboratories to reduce costs or to provide quantities demanded for world consumption, the intrinsic knowledge that generated its form and function was stored in the forest and ready to be copied.

A review carried out in the scientific and technical literature as part of this work identified more than 200 species of Amazonian plants with known potential to provide raw for an initial low-end bio-economy in the Amazon. A reduced listing of the 20 very promising species that have been widely used, integrate local productive chains or show strong potential use in food, cosmetics, perfumery, medicinal, advanced materials and biotechnology have their distribution modeled. The listing includes rosewood (*Aniba rosaeodora*), Brazil nut (*Bertholletia excelsa*), cumaru/tonka (*Dipteryx odorata*), açaí (*Euterpe oleracea*) and rubber tree (*Hevea brasiliensis*) among other. A sample distribution for rosewood in the territory is shown in **Figure 5**.

Few of the biological assets of Amazonian biodiversity are known, others are being researched for their nutritional, structural, biochemical and market properties, to become products of future use.

A good example of this transition in the area of food is the açaí fruit of the *Euterpe oleracea* palm, widely and historically consumed only by local populations until the 1990s. From then on, it gained the world for its nutritional and functional qualities and its flavor, even with the operational difficulties of being a fresh, minimally processed fruit transported frozen from the vicinity of the forest to consumer markets elsewhere in Brazil and abroad (e.g., to the US and Japan) [18]. Its botanical genus (*Euterpe*) bears the name of one of the nine muses of Greek mythology, daughter of Zeus, who represents pleasure and happiness, as many consumers of açaí pulp may well attest.

Like açaí, many of the Amazonian biodiversity foods are traditionally consumed by the local population, with marked flavors and excellent nutritional properties, as well as functional foods and nutraceuticals in many cases. Camu-camu (*Myrciaria dubia* (HBK) McVaugh), for example, has 4 times more vitamin C than acerola [22]; murici (*Byrsonima crassifolia* (L.) Rich.), has excellent antioxidant properties [23], as well as açaí, that reached global markets. In addition to antioxidant activity and being a source of five types of carotenes, taperebá (*Spondias mombin* L.) is a rich source of vitamin A, at the rate of 100 g of fruit corresponding to more

with modern technological tools and cutting-edge research, a natural plastic was developed from açaí, with polyurethane produced from the seeds [33]. Discarding the abundant açaí berry seeds is a potential environmental problem in the pulp for food production cycle. The development of a plastic from the seeds also shows the possibilities of using by-products of a production chain in other associated chains for an even more efficient bio-economy with

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Other examples of uses of bio-composites are ucuuba (*Virola surinamensis*) from which a patented [34] butter is produced, which is capable of providing a matte effect in the skin. From the leaves and branches of the pau-rosa (*Aniba rosaeodora* Duckei), the linalool compound is extracted [35] which is one of the traditional components of the classic Channel No. 5 perfume. Currently, the following products of the Amazonian biodiversity for diversified products are on the market for cosmetics applications: Babaçu (*Orbignya oleifera*) oil, Buriti (*Mauritia flexuosa*) oil, Brazil nut (*Bertholletia excelsa*) oil, Copaíba (*Copaífera officinalis*) oil, Passionflower (*Passiflora edulis*) oil, Urucum (*Bixa orellana*) oil, Patauá (*Oenocarpus bataua*) oil, Pequi (*Caryocar brasiliense*) oil, Bacuri (*Platonia insignis*) oil, Cupuaçu (*Theobroma grandiflorum*) oil, Murumuru

Research in the medical field confirms the value of many indigenous traditional medicines and goes beyond, with its own and advanced research methods [36]. As an example, we can mention the chichuá (*Maytenus guiane*nsis Klotzsch ex Reissek) that presents anti-leishmaniosis [37] and anti-microbial [38] compounds; guaraná (*Paullinia cupana*) with its properties for the treatment of Alzheimer's disease [39], priprioca (*Cyperus articulatus* L.) with anticonvulsant properties [40], babaçu (*Orbignya phalerata*) with a cicatrizing compound [41], sacaca (*Croton cajucara* Benth.) with hypoglycemic properties [42] and as ulcer healing [43], pracaxi (*Pentaclethra macroloba* Willd.) with anti-hemorrhagic activity [44] and natural larvicide [45], in addition to estoraque (*Ocimum micranthum* Willd.) with its antifungal [46] and antioxidant [47] properties.

Quercetin is a flavonoid that has the ability to suppress free radicals and thereby help preserve the brain and heart, keep the immune system active, protect the body against cancer, and act to prevent diseases, especially neurodegenerative diseases such as Alzheimer's disease [48]. Quercetin, present in many foods but in low concentrations, is obtained from the natural purification process of the fava d'anta (*Dimorphandra mollis* Benth) [49]. And the uncera (cat's claw) (*Uncaria tomentosa* and *Uncaria guianensis*) and is largely used in the pharmaceutical industry [50]. Pilocarpine, an alkaloid with extensive use in ophthalmology [51], is extracted from jaborandi (*Pilocarpus microphyllus* Stapf ex Holm). These are many other examples of species already studied that integrate or can integrate local production chains in the produc-

But the biological assets also have application in industry, with emphasis on endophytic fungi (*Coniochaeta lignaria*, for example) with the capacity to degrade lignin in the cell walls of plant

Another study with phytosterols isolated from endophytic fungus (*Colletotrichum gloeosporioides*), an Amazon fungus, offers potential sources of novel natural products for exploitation in medicine, agriculture and the pharmaceutical industry [53]. Microorganisms are an attractive

(*Astrocaryum murumuru*) oil and Ucuúba (*Virola surinamensis*) butter.

minimized externalities.

tion of drugs and phytotherapeutics.

cells, with great potential for the bioenergy industry [52].

**Figure 5.** Geographic distribution for rosewood (*Aniba rosaeodora*) in the Brazilian Amazon [21].

than 37% of the daily needs of the vitamin [24]. Besides the well-known Brazil nut (*Bertholletia excelsa*), which is already a nut consumed worldwide for a long time, there are many other fruits and seeds of the Amazon with potential to gain new markets, such as cumaru-ferro (*Dipteryx odorata*); cupuaçu (*Theobroma grandiflorum*); uxi (*Endopleura uchi* (Huber) Cuatrecasas); graviola (*Annona muricata* L.); patauá (*Oenocarpus bataua* Mart.); guaraná (*Paullinia cupana*); priprioca (*Cyperus articulatus* L.); and bacuri (*Platonia insignis*), among many others.

The raw materials of Amazonian biodiversity are used in the industry of essences and oils to make cosmetic and perfumery products. As an example, the cumaru-ferro (*Dipteryx odorata)* fermented seeds produce an essential and industrial oil, while coumarin (*coumarinic anhydride*), which is an aromatic essence used as a narcotic and stimulant [25]. This oil is also used as a fixative in the perfumery industry [26]. Another example is andiroba (*Carapa guianensis*) available in the market in the form of essential oil, with anti-inflammatory, moisturizing, healing properties [27], being also sold for especially sensitive skin care cosmetics [28].

Açaí has also been studied and is used far beyond food: in the cosmetics sector its oil has properties for skin nutrition, revitalization and hydration, it contains omega 6, it is an antioxidant agent rich in polyphenols indicated for the formulation of anti-aging products [29, 30]. The anthocyanin present in large quantities in the açaí pulp was used in an application as a natural marker for teeth bacterial plaque [31] with large potential markets. In another development, nanoparticles of açaí oil are used to treat cancerous lesions [32]. Proving that applications of biodiversity raw materials tend to be innumerable, especially when combined with modern technological tools and cutting-edge research, a natural plastic was developed from açaí, with polyurethane produced from the seeds [33]. Discarding the abundant açaí berry seeds is a potential environmental problem in the pulp for food production cycle. The development of a plastic from the seeds also shows the possibilities of using by-products of a production chain in other associated chains for an even more efficient bio-economy with minimized externalities.

Other examples of uses of bio-composites are ucuuba (*Virola surinamensis*) from which a patented [34] butter is produced, which is capable of providing a matte effect in the skin. From the leaves and branches of the pau-rosa (*Aniba rosaeodora* Duckei), the linalool compound is extracted [35] which is one of the traditional components of the classic Channel No. 5 perfume. Currently, the following products of the Amazonian biodiversity for diversified products are on the market for cosmetics applications: Babaçu (*Orbignya oleifera*) oil, Buriti (*Mauritia flexuosa*) oil, Brazil nut (*Bertholletia excelsa*) oil, Copaíba (*Copaífera officinalis*) oil, Passionflower (*Passiflora edulis*) oil, Urucum (*Bixa orellana*) oil, Patauá (*Oenocarpus bataua*) oil, Pequi (*Caryocar brasiliense*) oil, Bacuri (*Platonia insignis*) oil, Cupuaçu (*Theobroma grandiflorum*) oil, Murumuru (*Astrocaryum murumuru*) oil and Ucuúba (*Virola surinamensis*) butter.

Research in the medical field confirms the value of many indigenous traditional medicines and goes beyond, with its own and advanced research methods [36]. As an example, we can mention the chichuá (*Maytenus guiane*nsis Klotzsch ex Reissek) that presents anti-leishmaniosis [37] and anti-microbial [38] compounds; guaraná (*Paullinia cupana*) with its properties for the treatment of Alzheimer's disease [39], priprioca (*Cyperus articulatus* L.) with anticonvulsant properties [40], babaçu (*Orbignya phalerata*) with a cicatrizing compound [41], sacaca (*Croton cajucara* Benth.) with hypoglycemic properties [42] and as ulcer healing [43], pracaxi (*Pentaclethra macroloba* Willd.) with anti-hemorrhagic activity [44] and natural larvicide [45], in addition to estoraque (*Ocimum micranthum* Willd.) with its antifungal [46] and antioxidant [47] properties.

than 37% of the daily needs of the vitamin [24]. Besides the well-known Brazil nut (*Bertholletia excelsa*), which is already a nut consumed worldwide for a long time, there are many other fruits and seeds of the Amazon with potential to gain new markets, such as cumaru-ferro (*Dipteryx odorata*); cupuaçu (*Theobroma grandiflorum*); uxi (*Endopleura uchi* (Huber) Cuatrecasas); graviola (*Annona muricata* L.); patauá (*Oenocarpus bataua* Mart.); guaraná (*Paullinia cupana*); prip-

The raw materials of Amazonian biodiversity are used in the industry of essences and oils to make cosmetic and perfumery products. As an example, the cumaru-ferro (*Dipteryx odorata)* fermented seeds produce an essential and industrial oil, while coumarin (*coumarinic anhydride*), which is an aromatic essence used as a narcotic and stimulant [25]. This oil is also used as a fixative in the perfumery industry [26]. Another example is andiroba (*Carapa guianensis*) available in the market in the form of essential oil, with anti-inflammatory, moisturizing, heal-

Açaí has also been studied and is used far beyond food: in the cosmetics sector its oil has properties for skin nutrition, revitalization and hydration, it contains omega 6, it is an antioxidant agent rich in polyphenols indicated for the formulation of anti-aging products [29, 30]. The anthocyanin present in large quantities in the açaí pulp was used in an application as a natural marker for teeth bacterial plaque [31] with large potential markets. In another development, nanoparticles of açaí oil are used to treat cancerous lesions [32]. Proving that applications of biodiversity raw materials tend to be innumerable, especially when combined

rioca (*Cyperus articulatus* L.); and bacuri (*Platonia insignis*), among many others.

**Figure 5.** Geographic distribution for rosewood (*Aniba rosaeodora*) in the Brazilian Amazon [21].

192 Land Use - Assessing the Past, Envisioning the Future

ing properties [27], being also sold for especially sensitive skin care cosmetics [28].

Quercetin is a flavonoid that has the ability to suppress free radicals and thereby help preserve the brain and heart, keep the immune system active, protect the body against cancer, and act to prevent diseases, especially neurodegenerative diseases such as Alzheimer's disease [48]. Quercetin, present in many foods but in low concentrations, is obtained from the natural purification process of the fava d'anta (*Dimorphandra mollis* Benth) [49]. And the uncera (cat's claw) (*Uncaria tomentosa* and *Uncaria guianensis*) and is largely used in the pharmaceutical industry [50]. Pilocarpine, an alkaloid with extensive use in ophthalmology [51], is extracted from jaborandi (*Pilocarpus microphyllus* Stapf ex Holm). These are many other examples of species already studied that integrate or can integrate local production chains in the production of drugs and phytotherapeutics.

But the biological assets also have application in industry, with emphasis on endophytic fungi (*Coniochaeta lignaria*, for example) with the capacity to degrade lignin in the cell walls of plant cells, with great potential for the bioenergy industry [52].

Another study with phytosterols isolated from endophytic fungus (*Colletotrichum gloeosporioides*), an Amazon fungus, offers potential sources of novel natural products for exploitation in medicine, agriculture and the pharmaceutical industry [53]. Microorganisms are an attractive source of new therapeutic compounds, they serve the ultimate readily renewable, and inexhaustible source of novel structures bearing pharmaceutical potential [54].

approximately 500%. The price of the nut ranged from R\$3.00 per kg for the collectors to R\$18.00 per kg for the wholesale companies. It was observed that the exporting companies, which generated unequal gains within the chain, imposed the major additions to the product price. There were approximately 2700 families involved in cumaru nuts collection, exported

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Another evidence of such imbalance in the value sharing was revealed by our study of five value chains. While Brazil nut (*Bertholletia excelsa*) seeds, mostly from manual forest extraction, come from dozens of places along the Amazon basin, the value aggregation of such yields takes place only on just a few locations furnished with processing plants, as shown in **Figure 7**. Recent corporate social responsibility efforts focused on purchasing biodiversity products from communities or cooperatives have generated more balanced and fair-trade relations, as

**Figure 6.** Conceptual diagram of the location of the basic stages of value chains of Amazonian biodiversity products.

**Figure 7.** Differences between the many places where Brazil nut (*Bertholletia excelsa*) is collect in the forest (left map) and the few places where there is value aggregation of it (right map), in the Brazilian Amazon, found in a sample survey [21].

mainly to Japan, France, Germany and China.

Solid lines mean the last stage of a product in the value chain [21].

State-of-the-art research can unveil new and surprising uses even for forest assets that have been exploited for a long time. For instance, that is the case for natural rubber (*Hevea brasiliensis*). When combined with nanoclay composites using biomechanical technology, it results in an advanced material to be utilized as artificial skin (Biocure)—a patented active material that induces the formation of new blood vessels (angiogenesis) and new tissues (neoformation) on the surface on which it is applied [55]. Latex and clay compounds have also been developed to manufacture high-tech tire (run cooler, thus increasing tire durability and fuel economy), anti-rust coatings, tennis balls, gloves and masks [55].

### **4.3. Summary of Amazon value chains**

The biodiversity products of the Amazonian flora follow well-defined paths between the origins of the raw material, to its processed form for final consumption or to be reprocessed into components for very high specialty products. The value-added paths of biodiversity products involve multiple steps and social and business actors, varying according to the nature of the raw material, the products to be processed and the location of the harvesting and processing regions. As a general rule, the production of the raw material, which may be fruit, seed, sap, or other part or component of the plants occurs in the rural environment. They may come from primitive areas of natural forest or managed agroforestry systems (SAF), such as natural forests with extensive extractive species and intercropped planted forests.

The rural area is home to communities where the first basic stages of preparation of the material collected or harvested for subsequent supply occur, such as cleaning, threshing, drying and other low-tech processes. Logistic processes such as the transport of the material from the collection and production sites to the pre-processing sites, storage and shipment to the processing centers also occur in the rural domain. In every aspect of this beginning of the value chain, there are opportunities for individual, family, cooperative or business based on local entrepreneurship.

After pre-processing, the materials are taken by boat or truck to companies or cooperative facilities in the Amazon or in another region in Brazil or in other Amazonian countries (e.g., Bolivia) where most or the entire product's actual processing takes place, in facilities with varying degrees of automation. From there it is ready for consumption, locally or in markets elsewhere in Brazil or abroad. Based on a comprehensive study we conducted with value chains of five plant species, we developed a conceptual diagram that represents the main places, environments and activities carried out throughout the whole transformation cycles, from inputs origin to final consumption, as shown in **Figure 6**.

Not all paths shown in **Figure 6** have fair remuneration in the value adding they represent. A 2005 study for cumaru (*Dipteryx odorata*) value chain in the State of Pará, Brazil, illustrates the problem [56]. The markup was 75.0% for the intermediary, 166.7% for wholesale companies in towns nearer production areas, and 233.3% for the wholesale companies from Belém, the State capital. The total markup from the beginning to the end of the market chain was approximately 500%. The price of the nut ranged from R\$3.00 per kg for the collectors to R\$18.00 per kg for the wholesale companies. It was observed that the exporting companies, which generated unequal gains within the chain, imposed the major additions to the product price. There were approximately 2700 families involved in cumaru nuts collection, exported mainly to Japan, France, Germany and China.

source of new therapeutic compounds, they serve the ultimate readily renewable, and inex-

State-of-the-art research can unveil new and surprising uses even for forest assets that have been exploited for a long time. For instance, that is the case for natural rubber (*Hevea brasiliensis*). When combined with nanoclay composites using biomechanical technology, it results in an advanced material to be utilized as artificial skin (Biocure)—a patented active material that induces the formation of new blood vessels (angiogenesis) and new tissues (neoformation) on the surface on which it is applied [55]. Latex and clay compounds have also been developed to manufacture high-tech tire (run cooler, thus increasing tire durability and fuel economy), anti-rust coatings,

The biodiversity products of the Amazonian flora follow well-defined paths between the origins of the raw material, to its processed form for final consumption or to be reprocessed into components for very high specialty products. The value-added paths of biodiversity products involve multiple steps and social and business actors, varying according to the nature of the raw material, the products to be processed and the location of the harvesting and processing regions. As a general rule, the production of the raw material, which may be fruit, seed, sap, or other part or component of the plants occurs in the rural environment. They may come from primitive areas of natural forest or managed agroforestry systems (SAF), such as natural

The rural area is home to communities where the first basic stages of preparation of the material collected or harvested for subsequent supply occur, such as cleaning, threshing, drying and other low-tech processes. Logistic processes such as the transport of the material from the collection and production sites to the pre-processing sites, storage and shipment to the processing centers also occur in the rural domain. In every aspect of this beginning of the value chain, there are opportunities for individual, family, cooperative or business based on

After pre-processing, the materials are taken by boat or truck to companies or cooperative facilities in the Amazon or in another region in Brazil or in other Amazonian countries (e.g., Bolivia) where most or the entire product's actual processing takes place, in facilities with varying degrees of automation. From there it is ready for consumption, locally or in markets elsewhere in Brazil or abroad. Based on a comprehensive study we conducted with value chains of five plant species, we developed a conceptual diagram that represents the main places, environments and activities carried out throughout the whole transformation cycles,

Not all paths shown in **Figure 6** have fair remuneration in the value adding they represent. A 2005 study for cumaru (*Dipteryx odorata*) value chain in the State of Pará, Brazil, illustrates the problem [56]. The markup was 75.0% for the intermediary, 166.7% for wholesale companies in towns nearer production areas, and 233.3% for the wholesale companies from Belém, the State capital. The total markup from the beginning to the end of the market chain was

haustible source of novel structures bearing pharmaceutical potential [54].

forests with extensive extractive species and intercropped planted forests.

from inputs origin to final consumption, as shown in **Figure 6**.

tennis balls, gloves and masks [55].

194 Land Use - Assessing the Past, Envisioning the Future

local entrepreneurship.

**4.3. Summary of Amazon value chains**

Another evidence of such imbalance in the value sharing was revealed by our study of five value chains. While Brazil nut (*Bertholletia excelsa*) seeds, mostly from manual forest extraction, come from dozens of places along the Amazon basin, the value aggregation of such yields takes place only on just a few locations furnished with processing plants, as shown in **Figure 7**.

Recent corporate social responsibility efforts focused on purchasing biodiversity products from communities or cooperatives have generated more balanced and fair-trade relations, as

**Figure 6.** Conceptual diagram of the location of the basic stages of value chains of Amazonian biodiversity products. Solid lines mean the last stage of a product in the value chain [21].

**Figure 7.** Differences between the many places where Brazil nut (*Bertholletia excelsa*) is collect in the forest (left map) and the few places where there is value aggregation of it (right map), in the Brazilian Amazon, found in a sample survey [21].

with the operations of a range of forest products purchased by the Natura company and açaí purchased by the Sambazon company. However, the typical market distortions in the values paid to the extractivist-producer by intermediaries still has to be resolved.

which also process ucuuba butter. The net profit of those operations for those families is three times larger per year as compared to the only once income for felling the tree. Natura is also promoting the bio-industrialization in the Amazon itself. It opened the Ecopark, an industrial

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The third example is the FLORAUP digital platform that shows how information technology can be used to foster direct connection between local producers, from their remote locations in the forest, with potential buyers of their Amazon biodiversity products. After 1 year on air, the platform has only 57 registries, perhaps due to the relatively low digital connectivity of

Finally, the fourth example is ORIGENS BRASIL, a production chain tracking digital platform. The platform allows anybody to know instantly the origin of the product that contains assets of Amazonian biodiversity since its raw material harvesting, its history and actors involved in the production. This is done simply by pointing a smartphone to the product packaging, which is equipped with a QR Code that accesses a remote live database. If one assumes that responsible consumers are an accelerating trend, such traceability platforms are in dire need

Natural products developed on a sustainable basis have a long history in the Amazon since the rubber boom years. An increasing demand for these products for traditional and innovative uses in the food, cosmetics, perfumery and pharmaceutical industries has promoted new business opportunities in the Brazilian Amazon. As part of this trend, advances in biotechnology research have demonstrated a key role in expanding this potential, thus boosting the value chains that have as one of the main attributes the bio-industries focused on the process-

This research evaluated 25 enterprises that markets non-timber products of Amazonian biodiversity. The sample encompasses a range of segments, types, sizes and bio-assets processed. From international corporations with more than 100 years in the market of extracting the finest Amazonian essences, to innovative indigenous entrepreneurship of collecting and selling forest's native species seeds in large amounts to support much needed reforestation efforts elsewhere.

These industries deliver a vast array of products: It ranges from an exfoliating agent of açaí seed (Beraca company) to a powder form of the same fruit for energy drinks (Yerbalatina Phytoactives and 100% Amazônia companies). The Amazon-based bio-industry is also welldefined and consolidated in the supplying chains of oils and essences. As early as 1921, the essential oil extracted from the pau-rosa (*Aniba rosaeodora*) wood, a native tree from the Amazon, which is rich in the aromatic compound linalool, was the main ingredient of the famous French perfume Chanel n° 5 [35]. From them on, the supplying of the finest and unique ingredients from the Amazon biodiversity thrived, adopting, mostly, adequate standards for social and environmental sustainability, which was not always the case with Pau-Rosa. Today, extracts of cumaru are present in the most famous and popular fragrances (Givaudan company) and the ingredients market for the cosmetics industry is supplied with essential

complex in Benevides, near Belém, state of Pará.

remote communities across the Amazon.

for the Amazon.

**4.5. Traditional bio-industries**

ing of forest raw materials into biodiversity products.

Agroforestry systems (SAF—Sistema Agroflorestal) are agricultural crops intercropped with tree species, used to restore forests and recover degraded areas. The SAF technology overcomes terrain limitations, minimizes degradation risks inherent in agricultural activity and optimizes the achieved productivity. There is a reduction both in soil fertility losses and pest attacks. The use of trees is fundamental for the recovery of ecological functions, since it allows the reestablishment of much of the relationships between plants and animals. The tree components are inserted as a strategy to combat erosion and the contribution of organic matter, restoring soil fertility. Two successful tropical agroforestry projects illustrative of this system in the Amazon are the CAMTA cooperative [57] in Tomé Açu, in the state of Pará and the RECA cooperative [58] in Abunã, in the state of Rondônia.

#### **4.4. Innovative entrepreneurship leveraging relatively low-end technologies**

With the advancement of consumer markets, technologies and business models, new business development opportunities have emerged from the products of Amazon biodiversity. Four examples of this innovative entrepreneurship model were selected to demonstrate the combination of technology and corporate social responsibility for the generation and fair distribution of benefits to all links and actors of value chains. Two of the examples illustrate production companies and the other two examples show companies that developed digital platforms to increase efficiency in transactions and traceability of biodiversity products.

The first example is the Tahuamanu company, a Bolivian producer of Brazil nut products, which illustrates the case of an Amazonian company that innovated by applying relatively low-end technologies, to all links of the Brazil nut productive chain, reflected in tremendous increases in productivity and benefits also to collectors at the base of the value chain. The 2016 severe El Niño-related drought in many parts of the Amazon may have wreaked havoc to the Brazil nut production that supplies the company. It is reported a 70% drop in harvest in 2017, responsible for laying off over 300 employees from his Cobija processing plants [59]. This unprecedented fall in production raise the question of the potential impact of climate change on the new development paradigm for the Amazon.

The second example is the NATURA cosmetics company and its bio-industrial operations. It is probably the most successful case of exploration Amazon biodiversity assets within the most desirable parameters of socio-environmental excellence. Natura has developed a network of suppliers of raw materials from Amazon biodiversity that organizes production of almost 3000 families across the region. It supports training programs and community empowerment toward sustainability. The example of the ucuuba butter shows how the combination of innovative R&D and training communities in sustainable exploitation can deliver good results. Ucuuba trees were used as timber for broom sticks and that was accelerating risks of tree extinction. Butter was developed out of the ucuuba seeds and that new product found its way in cosmetics of high added-value. Floodplain communities of the Marajó Island were trained to collect and pre-process the seeds for sale to Natura and to other companies which also process ucuuba butter. The net profit of those operations for those families is three times larger per year as compared to the only once income for felling the tree. Natura is also promoting the bio-industrialization in the Amazon itself. It opened the Ecopark, an industrial complex in Benevides, near Belém, state of Pará.

The third example is the FLORAUP digital platform that shows how information technology can be used to foster direct connection between local producers, from their remote locations in the forest, with potential buyers of their Amazon biodiversity products. After 1 year on air, the platform has only 57 registries, perhaps due to the relatively low digital connectivity of remote communities across the Amazon.

Finally, the fourth example is ORIGENS BRASIL, a production chain tracking digital platform. The platform allows anybody to know instantly the origin of the product that contains assets of Amazonian biodiversity since its raw material harvesting, its history and actors involved in the production. This is done simply by pointing a smartphone to the product packaging, which is equipped with a QR Code that accesses a remote live database. If one assumes that responsible consumers are an accelerating trend, such traceability platforms are in dire need for the Amazon.

## **4.5. Traditional bio-industries**

with the operations of a range of forest products purchased by the Natura company and açaí purchased by the Sambazon company. However, the typical market distortions in the values

Agroforestry systems (SAF—Sistema Agroflorestal) are agricultural crops intercropped with tree species, used to restore forests and recover degraded areas. The SAF technology overcomes terrain limitations, minimizes degradation risks inherent in agricultural activity and optimizes the achieved productivity. There is a reduction both in soil fertility losses and pest attacks. The use of trees is fundamental for the recovery of ecological functions, since it allows the reestablishment of much of the relationships between plants and animals. The tree components are inserted as a strategy to combat erosion and the contribution of organic matter, restoring soil fertility. Two successful tropical agroforestry projects illustrative of this system in the Amazon are the CAMTA cooperative [57] in Tomé Açu, in the state of Pará and the

With the advancement of consumer markets, technologies and business models, new business development opportunities have emerged from the products of Amazon biodiversity. Four examples of this innovative entrepreneurship model were selected to demonstrate the combination of technology and corporate social responsibility for the generation and fair distribution of benefits to all links and actors of value chains. Two of the examples illustrate production companies and the other two examples show companies that developed digital platforms to increase efficiency in transactions and traceability of biodiversity products.

The first example is the Tahuamanu company, a Bolivian producer of Brazil nut products, which illustrates the case of an Amazonian company that innovated by applying relatively low-end technologies, to all links of the Brazil nut productive chain, reflected in tremendous increases in productivity and benefits also to collectors at the base of the value chain. The 2016 severe El Niño-related drought in many parts of the Amazon may have wreaked havoc to the Brazil nut production that supplies the company. It is reported a 70% drop in harvest in 2017, responsible for laying off over 300 employees from his Cobija processing plants [59]. This unprecedented fall in production raise the question of the potential impact of climate change

The second example is the NATURA cosmetics company and its bio-industrial operations. It is probably the most successful case of exploration Amazon biodiversity assets within the most desirable parameters of socio-environmental excellence. Natura has developed a network of suppliers of raw materials from Amazon biodiversity that organizes production of almost 3000 families across the region. It supports training programs and community empowerment toward sustainability. The example of the ucuuba butter shows how the combination of innovative R&D and training communities in sustainable exploitation can deliver good results. Ucuuba trees were used as timber for broom sticks and that was accelerating risks of tree extinction. Butter was developed out of the ucuuba seeds and that new product found its way in cosmetics of high added-value. Floodplain communities of the Marajó Island were trained to collect and pre-process the seeds for sale to Natura and to other companies

paid to the extractivist-producer by intermediaries still has to be resolved.

**4.4. Innovative entrepreneurship leveraging relatively low-end technologies**

RECA cooperative [58] in Abunã, in the state of Rondônia.

196 Land Use - Assessing the Past, Envisioning the Future

on the new development paradigm for the Amazon.

Natural products developed on a sustainable basis have a long history in the Amazon since the rubber boom years. An increasing demand for these products for traditional and innovative uses in the food, cosmetics, perfumery and pharmaceutical industries has promoted new business opportunities in the Brazilian Amazon. As part of this trend, advances in biotechnology research have demonstrated a key role in expanding this potential, thus boosting the value chains that have as one of the main attributes the bio-industries focused on the processing of forest raw materials into biodiversity products.

This research evaluated 25 enterprises that markets non-timber products of Amazonian biodiversity. The sample encompasses a range of segments, types, sizes and bio-assets processed. From international corporations with more than 100 years in the market of extracting the finest Amazonian essences, to innovative indigenous entrepreneurship of collecting and selling forest's native species seeds in large amounts to support much needed reforestation efforts elsewhere.

These industries deliver a vast array of products: It ranges from an exfoliating agent of açaí seed (Beraca company) to a powder form of the same fruit for energy drinks (Yerbalatina Phytoactives and 100% Amazônia companies). The Amazon-based bio-industry is also welldefined and consolidated in the supplying chains of oils and essences. As early as 1921, the essential oil extracted from the pau-rosa (*Aniba rosaeodora*) wood, a native tree from the Amazon, which is rich in the aromatic compound linalool, was the main ingredient of the famous French perfume Chanel n° 5 [35]. From them on, the supplying of the finest and unique ingredients from the Amazon biodiversity thrived, adopting, mostly, adequate standards for social and environmental sustainability, which was not always the case with Pau-Rosa. Today, extracts of cumaru are present in the most famous and popular fragrances (Givaudan company) and the ingredients market for the cosmetics industry is supplied with essential oils of priprioca (Laszlo Aromaterapia & Aromatologia companies), pracaxi (Amazon Forest Trading company); copaiba (IFF—International Flavors & Fragrances company) and andiroba (Amazonoil company), among many other.

for insertion into new economic development paradigm is an imperative challenge for a real

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The industrial sector transforming biodiversity assets into available consumables act in the interface between biodiversity, biotechnology and bio-industry, which involves a complex system of partnerships between companies, universities, research institutes, official financial agencies, organized communities and cooperatives inside and outside the Amazon region.

The *Amazonia Third Way* initiative is conceived as a disruptive social and technological transformation toward a sustainable Amazonian development path. It calls for '*an Amazon-specific Fourth Industrial Revolution innovation (4IR) "ecosystem". This system must be able to rapidly prototype and scale innovations that apply a combination of advanced digital, biological, and material technologies to the Amazon's renewable natural resources, biomimetic assets, environmental services,* 

In support of socioeconomic development, systemic innovations will also apply to enhancing biodiversity-based value chains. Ideally, these would shape a unique 'Amazon-brand' able to

The Amazonia Third Way Initiative promotes in-depth research on alternative pathways for sustainably developing the Amazon territory, in harmony with the twenty-first century's Zeitgeist. Forests in the Amazon are the result of evolution over millions of years. Nature has developed a wide variety of biological assets, which include metabolic pathways, and genes of life on land, in aquatic ecosystems, and in their natural products—both, chemical and material—in conjunction with biomimetic assets, that is, the functions and processes used

4IR technologies increasingly harness these assets across many industries from pharmaceutics to energy, food, cosmetics, materials and mobility. Indeed, they are making profits, but to date these profits have not been channeled back to conserve the Amazon and to support the custodians of nature—indigenous and traditional communities—and also urban population

Within a proper legal and ethical framework, the Amazonia Third Way Initiative offers unprecedented opportunities to local populations to develop a vibrant, socially inclusive 'standing-forest, flowing-river' green economy. By harnessing nature's value through physical, digital and biological technologies of the 4th Industrial Revolution, we can simultane-

The region is still largely disconnected from the main centers of technological innovation dealing with 4IR technologies and the advanced bio-economy. The Amazonia Third Way Initiative is conceived as a multi-level path toward a new inclusive bio-economy, combining a highly innovative, entrepreneurial and technological economy with the re-valuation of non-

ously protect the Amazon ecosystems and their traditional custodians.

timber forest products and industries with low-end technologies.

sustainable Amazon development strategy.

*and biodiverse molecules and materials'* [2].

conquer global markets [61–63].

by nature.

in the region.

**5. Amazonia Third Way as a disruptive alternative**

Another sector that has shown significant growth is the food, functional food and nutraceutical industries (e.g., Sambazon, Tahuamanu companies). Companies in this sector tap in the healthy food market and, by applying relatively low-end technologies, have put Amazon bioactives available worldwide at anyone's table. As a rule of thumb, most sectors have benefited from the adoption of newer and accessible technologies in their processing facilities. From Brazil nuts micro-factories for peeling seeds (COOPERACRE cooperative) to agrosilviculture producer's cooperatives focused on traditional bio-industries (CAMTA, RECA cooperatives).

In our study, we analyzed many products offered by the Amazon traditional bio-industries based on two defining axis: the amount of technology involved in the making of their products and the degree to which they are closer or further to their original state as furnished by Nature. It was a qualitative analysis and it shows status classes for these products. The diagram in **Figure 8** shows the result of this qualitative analysis.

As it might be expected, values such as environmental sustainability, social development and fair-trade are a matter of concern for virtually all operations, to a greater or lesser extent, from small chestnut cooperatives to the giants of the essences and cosmetics sector. Nevertheless, there are reports of large traditional bio-industry operations that required botanical resources at large scales that have driven transformation in the supplying of natural asset, once coming from extractivism or agroforestry systems, into an asset generated from monocultures in the agroindustry's usual patterns. It also disrupted traditional handmade extractive processes [60]. Accommodating increasing demands for bio-products with limitations inherent to Nature's carrying capacity and traditional and local people culture, needs and potentials

**Figure 8.** Diagram depicting status classes for Amazon bio-industry products based on the amount of technology involved in their making and the degree to which they are closer or further to their original raw material state as furnished by nature [21].

for insertion into new economic development paradigm is an imperative challenge for a real sustainable Amazon development strategy.

The industrial sector transforming biodiversity assets into available consumables act in the interface between biodiversity, biotechnology and bio-industry, which involves a complex system of partnerships between companies, universities, research institutes, official financial agencies, organized communities and cooperatives inside and outside the Amazon region.
