The following are the main concepts used by ISAE /FGV as the major working tools applied in order to identify, select and rank Regional Potentialities for the State of Acre.

2.1. Area of Study   >>Back to the top

The area of study has been defined as the geographic space comprising the limits of the State.

The first stage of the study (collecting information and the area characterization) was accomplished within the existing counties, generating information for the second stage (identification and potentialities ranking) where the data and the conclusions were gathered for each of the regions comprising the State of Acre.

2.2. Regional Potentialities   >>Back to the top

Potentiality is defined as the natural resources, products, sectors, and/or field of economic activities (available but totally and/or partially untapped) that have sufficient appeal to stimulate the start up or the extension of a chosen economic activity, with consideration being given to the limits and social and economics characteristics and environmental guidelines relating to the Area of Study which are generally designated as Potential Factors.

As a broader definition of the concept, a Regional Potentiality can be transformed into a Business Opportunity if submitted to a set of requirement (like restrictions, incentives, basic economic evaluation, etc,) it has or can induce sufficient appeal capable of stimulating a decision to invest in a chosen productive activity adding value or utility to Potential Factors, that is, to those resources, goods, fields, sectors or local economic activities.

Note that as referred in the introduction, the idea of a Business Opportunity as per the formulation by FGV indicate the need of using an Information System like the one which has been suggested here in addition to a marketing strategy to be developed by SUFRAMA, so that the Regional Potentialities introduced herewith be known in Brazil and overseas.

2.3. Restrictions and Limitations  >>Back to the top

Restrictions are to be understood as the set of elements of natural order, cultural, doctrinal judicial order, or institutional law limiting, for a sufficient length of time, or restriction antropical actions of economic nature except by local ethnic groups, in regards to the use of Potential Factors existing at a given geographic area.

By limitations, one infers the set of elements that temporarily impede the whole use of local potential factors, demanding actions of various natures in order to have those restrictions removed.

Concerning the scope of the methodology being used, a few topics have been considered as restrictions and limitations such as: Indian reservations, areas under government protection, landing situations, judicial and institutional status, epidemiology, infestations, etc.

2.4. Variables or indicators  >>Back to the top

As per the methodological formulations, a variable or indicator is understood to be, a qualitative peculiarity outstanding within the limits of the area of the State, capable of increasing or reducing the appeal relating to resources, products, sector or the field of economic activity (potential factors) which are prone to influence on the decisions concerning specific investments.

So the methodology of choosing a variable (or indicator) as a selective component criterion, has taken into account.

Its potential to measure qualitatively and quantitatively the reductions of limitations or stimulus to the appeal on potential factors (resources, products, etc.)

Its potential to “translate” or welcome public policies as an strategic orientation towards regional integration via BR 174 highway and also environment preservation, for instance.

This way the set of chosen variables from the matrixes attached on each study for a single state has incorporated questions as: incentives, infrastructure, (routes of access, power, etc), market (local, regional, national and international), technology (leading and intensive high tech, etc.), raw materials and intermediary goods, social issues( employment), and environment.

2.5. Criteria of selection  >>Back to the top

The selection of potential factors (resources, product, sector, field or economic activity) was defined by measuring its appeal against the set of limitation and restrictions (which act as elements of diminishing the appealing utility) or from the variables and indicators (likewise acting as promoters of restrain elements).
Physically the relative importance of limitations, restrictions and chosen variables has been estimated through a matrix considering:

On line, the set of resources, products, sectors or existing or potential economic activities, within and into the geographic limits defined as the Area of Study; and

On columns, two segments that respectively gathered imitations; restrictions in the first, and variables (or indicators) of selection, in the second (orderly).

Acting as grading and reflection criteria, a system of distribution of values was used such as:

Attributing values within the scale of 0/3, the limits and restrictions influencing the resources, products, sectors, fields of activities identified within the Area of Study, and shown, on line, main the first Matrix segment.

Weighted scores in a scale of 0/5 representing the relative importance of limitations and restrictions for its segment (columns) in the matrix;

Weighted scores in a scale 0/3, the influence of selecting variables (or indicators) on the resources, products, sectors, fields of activities identified under the limitations and restrictions criteria;

Weighted scores in a scale of 0/5 representing the relative importance of limitations and restrictions for its segment (columns) in the matrix;

Weighted scores in a scale of 0/5 representing the relative importance for a specific variable (or indicator) within the segment of all variables shown on the columns in the matrix; and

Scoring indicates the grade of influence for the variable of selection and/or limitations and restriction on resources, products, sectors, and fields of activities identified. The higher the score the variable of selection indicates the greater influence of that variable. The lower the score on the limitations and restrictions indicates the fewer limitations and restrictions in this area.

The basic model applied is of a geopolitical nature which consists of the identification and analysis, for a given geographic space well defined on the dynamics of the origin and destination of main flows of any type, inter regionally whose set of factors can be placed on hierarchical rank, in order to be evaluated on its grade of sensibility whenever interventions are be made preserving its whole balance.

The definition of sub-regions were based on the following works:

Plan of Spatial Policy for the Amazon Region Development PDA 1994/1997;

In case of areas not covered by the PDA, as it happens for the majority of the territory covering the Amazonas State, the decision was to use the sub-division proposed by the Strategic Plan for the Amazon Region Development, 1994; and

Checking the list of the counties that are named on the PDA report, and the map of the Legal Amazon Region issued by the Brazilian Institute of Geography and Statistics IBGEW, printed in 1995. When there was no equivalence between the two of them, the data taken were those of IBGE, given its more recent printing and updating.

Likewise, the scope area of this study is that which comprised the State of Acre and its 22 counties distributed along 03 sub-regions numbering 5,6,and

2.6. Database  >>Back to the top

The methodology follows the original proposal of FGV that suggested one should apply the set of available research information, studies, plans, programs, and existing projects in many federal government agencies (Ministry of Science, Technology and International Affairs, etc), acting regional agency (SUFRAMA ,etc.), and from the state ( Secretaries and Institutes, etc.) which were directly and indirectly involved with the issues. In addition primary and secondary data were acquired from the database owned by ISAE FGV, direct interviews with professional technicians as well as the management staff running those institutions and agencies.

2.7. Process of Application  >>Back to the top

In short, it is important to stress that the selection process of “Potentialities” has involved successive application, in different stages, of the selection criteria which were defined at join meetings, considering sets of uneven restrictions, limitations, variables and/or indicators previously selected. It tested the potential factors (resources, products, sectors, sub-sectors, fields of activity) spatially distributed having economic exploitation potential or, even, whose factors were already under ongoing productive process in the region.

The selection was made at the moment in which, through a matrix of double entrance, these potential factors were submitted to each one of those stages resulting from that process the segment approved and excluded from the process (see figure 2).

The criteria selection used, was basically of qualitative and quantitative nature and gathered representative variables and/or indicators from social and economic segments, environmental and political (the former seen as correcting variables), from the geographic area taken into account. That area is, the sub-region pertaining to the Amazonas State. The stages of selection, which are presented ahead, comprise four different sets of criteria:

Conditional or restrictive criteria used in the first stage of selection, gather variables and proper conditional indexes which are considered pre-conditions, so that a product, sector, sub sector, field of activity be included in the process. Factors shown herewith are for the purpose of strategical consideration by government in general terms, and for SUFRAMA in particular. On the other side are legal conditions of constrain and others (for example, limits of areas granted to Indian reservations, etc) which are only overcome through decisions of political strategy or technological speed. This first state considered over the selection process has been applied in order to impose restrictive conditions in the starting up of eventual projects of investments (transformed into “Business Opportunity”) which shall be adjusted to the guidelines approved in the general strategy for public policy for the regional development and / or sectorial;

Environment criteria used in the second stage of selection included variables and indexes pertaining to the formulations of sustainable development models;

Social-economic criteria used in the third stage gather variables and/or indexes relating to the region's social and economic activities. It is divided into sub-regions, and questions are addressed concerning scale, integration of productive activity (sectorial trees), technology, foreign trade, infrastructure, social tools and urban population projects, scenarios, development axis, etc;

Markets criteria applied during the forth stage of the process of selection have taken into consideration the variables and/or indexes attached to the area's reputation or image. For example, the rain forest entrance image that stimulates the economic activities in the area of ecological tourism.

2.8. Reevaluation  >>Back to the top

The mechanism suggested here, accepts the reapplication of the process for feedback, and periodic reevaluations of the model through total or partial use of the criteria of selection formulated herewith.

This way it is possible, therefore, to maintain the criteria and the imposed variations on the set of limitations, restrictions, variables and/or indicators chosen for each criterion in particular in function of eventual changes that may occur in the region within a given time length (see figure 2).

2.9. Validation >>Back to the top

In order to validate the Project of Regional Potentialities by the State research target, once the final report was closed up, it was forwarded to the Acre State Secretary of Planning (SEPLAN) for previous analysis and, later on, to organize technical meetings in the state for its introduction, discussion, validation and collection of ideas about the said report.

The above-mentioned SEPLAN invited public and private organizations on its own judgment, such as, all its Secretaries, Banks, Industries Federations, Agricultural Federations, EMBRAPA, EMATER, SEBRAE, and some municipal mayors. SUFRAMA and FGV/IESAE also attended the meeting, and their technicians presented the document.

2.10. Prerequisites  >>Back to the top

The application of this methodology required, necessarily, consideration of previous theoretical and practical processes, assumption of hypothesis, and definition of prerequisites, which were fundamental to establish a higher or lower degree of efficiency in the process of selection.

Therefore, the methodology described here has considered:

Discussion, definition, adjustment of each potential factor under different level of disaggregating. In this case, the parameters of official ranking available that open up the sectors on sub sectors and fields of economic activities in Brazil were used as a tool. A determinant factor during the exercising of this phase was the greater or less availability, breaking down and quality of data as well as the information about the segments selected for discussion;

Definition of each criterion for the set of limitations and restrictions, variables and/or indicators that should be used in the screening for the selection of sectors, sub sectors or selected field of activity.

Hierarchization of different stages by ordering the sequence of criteria application, and within each criterion, the sequence of application, and restrictions, variables and/or indicators that should be taken. This step should be done because, ordering different sequences of criteria, limitations, restrictions, variables and/or indicators, should generate different hierarchies listing of products, sectors, sub sectors, fields and/or economic activity..11. Reevaluation of Potentialities July 1999

Following the extolled methodology meeting were held, from the 28th to the 30th of June of 1999, to update the data within the preliminary document, as well as to update the inclusion and exclusion of the potentialities into the local/regional and wider markets. The technical meetings were attended by the following institutions: Secretaria de Estado de Planejamento SEPLAN ( State Secretary of Planning), Secretaria de Estado de Produção SEPRO (State Secretary of Production ), Secretaria Executiva de Habitação SEHAB/COHAB (State Secretary for Housing), Secretaria Executiva de Indústria e Comércio e Turismo SEICT (State Secretary of Industry, Commerce and Tourism), Secretaria Executiva de Cidadania (State Secretary of Citizenship, de Trabalho e Ação Social (SECTAS), Secretaria Executiva de Florestas e Extrativismo (SEFE), Secretaria Executiva de Abastecimento e Produção,(SEAP/DDPA), Fundação de Tecnologia do Estado do Acre( FUNTAC), EMBRAPA/Acre, Universidade Federal do Acre UFAC, Departamento de Estradas de Rodagem do Acre(DERACRE), Associação Comercial do Acre (ACA), Federação das Indústrias (FIEAC) e Serviço de Apoio às Micro e Pequenas Empresas do Acre.

The process of selection through the application of the methodology defined here, has made possible the identification of Regional Potentialities that are present ahead, in decreasing order in terms of importance by the hierarchization of the sets of potential factors, that is, resources, products, sectors, fields, and/or detected activities along the area of study.

Along the State of Acre territorial limits, 22 municipalities are found, comprising 03 sub regions: 05,06 and 07.

Along Sub Region 05, there are 12 municipalities: Rio Branco, Acrelândia, AssisBrasil, Brasiléia, Bujari, Capixaba, Epitaciolândia, Plácido de Castro, Porto Acre, Senador Guiomard, Sena Madureira e Xapuri;

Along Sub Region 06, there are 06 municipalities: Feijó, Jordão, Manuel Urbano, Marechal Athaumaturgo, Santa Rosa do Purus e Tarauacá; and

Along Sub Region 07, there are 04 municipalities: Cruzeiro do Sul, Mâncio Lima, Porto Walter e Rodrigues Alves.

The products sectors, resources, fields and/or potential activities detected along the Acre State, according to the market characteristics were grouped as follows:

Potential products for local and regional supply;
Potential products for a broader market (outreaching national and/or international markets).

3.1. Potential Products for Local and Regional Supply  >>Back to the top

The studies have included the group of activities for local consumption only, according to the existent state population that demand those types of products. However, the local demand limits the market, that is, it supports a limited business pressure, and it grows depending on the factors such as income and population, among others.

Specifically in the Acre State case, where producers organization is ahead in some aspects of the other States of the Occidental Amazon Region, concerning management and labor aspects. The potential products found to supply the local/regional to the State and its sub regions, are listed as following:

Table of Potentialities to supply Local/Regional market
( State and Sub Regions 05,06,07) 1999

 

(*) Sub Region 05: including 12 municipalities - Rio Branco, Acrelândia, Assis Brasil, Brasiléia, Bujari, Capixaba, Epitaciolândia, Plácido de Castro, Porto Acre, Senador Guiomard, Sena Madureira e Xapuri;

Sub Region 06: including 06 municipalities - Feijó, Jordão, Manuel Urbano, Marechal Thaumaturgo, Santa Rosa do Purus e Tarauacá;

Sub Region 07: including 04 municipalities - Cruzeiro do Sul, Mâncio Lima, Porto Walter e Rodrigues Alves.

 

3.1.1 Concise description of potential products for local/regional supply:  >>Back to the top

A - Coffee

Coffee constitutes one of most important exporting agriculture products in the country's exportation agenda. The commercialization of the Acre State production is limited to the local and regional markets, due to reasons of competitiveness.

According to FAO (1996) data, the per capita consumption was estimated in 1.6kg/year and the projected demand to the Acre State was estimated 774 ton per year.

The occupied area with coffee agriculture in the State, in 1996, was estimated en 305 hectare, with expected production of 347 ton of coffee.

The coffee, although an insignificant production compared to other agricultural projects, appearing as a potentiality on the local/regional discourtesy, considering also the weather conditions that favors the demand increase.

B. Guaraná

In the Acre State there is a natural occurrence of the guaraná tree, on the Low Rio Branco, with the plantations that were motivated since 1981, through the National Program of Incentives to the Guaraná Agriculture. In most of the region the culture finds natural conditions adequate to develop, especially in areas that are provided with good infrastructure and location towards the market.

The product presents great potential to the local and regional markets and has been commercialized under the shapes of stick, syrup e and concentrate syrup for soft drinks.

There have been installed a number of soft drinks concentrate syrup factories in the Amazon Region, which are suppliers of the concentrate syrup specially to the soft drink industry. The estimated consumption in 1998 was 1 ton of the product, fact that assure to the guaraná culture special relevance. This factories, in order to benefit from the tax incentives, necessarily acquire inputs from the Occidental Amazon Region, fact that bring as certain the production of this culture in Acre State, even knowing that guaraná is been cultivated in other States of the Country.
Listed below data concerning guaraná production
Production of Guaraná ( in t) 1994 1998

Production Income (thousand dollars) 1994 1998

C - Non Metal Mineral Products Industry

In Acre State this sector comprises the following activities:

Benefit of non metal minerals, basically washed sand and clay; and

Manufacturing of clay-ceramic items, such as brick stones, ceramic roofing tiles and ceramic floor tiles.

The production of this sector is centered in the Porto Acre and Rio Branco municipalities (22 enterprises) and Xapuri ( 01 enterprise ). This production concentration towards the capital of the State is primarily due to the roads axis towards the Center and South of the county, fact that facilitates the production distribution to supply bigger cities markets.

The market for clay-ceramic products in Acre State comprises the public and the private sectors. The fact that the Acre State possess abundance of clay, sands and mud, basic raw material to produce the brick stones, ceramic roof tiles and ceramic varied floor tiles, allow the State to assist de demand of clay to be use with the asphalt in streets and roads.

Considering that the government as well as the private sectors has risen up the State civil construction activities, and due to the national stabilized economy, one may conclude that there will be an increase of the demand of the product manufactured in this specific sector. It is fundamental to assist the needs of the demand, not only in quantity but also in quality.

The market is not completely supplied, mainly due to the seasonality of the extraction of the raw materials and technical problems with transportation means and production, although there is a potential for production of other simple goods (like ceramic and tiles), that have a large use in civil constructions and are imported from other States in our days.

D. Furniture

The industrialization of wood/logs in Acre State has been presenting a significant development with new enterprises, because the enormous wood/log potential. The production methods, although, are reduced in technological level, because the wood is not properly dried, the finishing is deficient, there is a lack of a modern design, among other challenges. As an outcome of these factors the productivity is the sector is low, with its reflections on profitability, qualitative and productive level.

The increment of an efficient production depends of different factors, such as: equipment and machinery substitution, introduction of new technologies in the production process, qualification of the working force, use of dry wood and readiness of financial resources for this activity.

The furniture sector is spatially distributed in the entire State, being the sector that has 15,57% of the enterprises of the industrial universe of the State. It is a sector that caries on enormous potential to the market, in its adherence degree and in its capability of fomenting new enterprises talent.

Currently, there are 54 enterprises that supply the local market, basically the capital of the State. Considering the effective production conditions, the increase of participation will occur as soon as the quality is better, the prices are more competitive and there will be and increment to the State income.

The furniture sector is capable of great potentialities, when the common sector problems, as quality, training, finishing, financial incentives to the activity are overcame.

E. Maniocu flour

Acre State has in the manioc production its main agriculture product. In 1996, its production was 162,418 ton distributed among all the State municipalities.

Each manioc producer municipality has at least one “ casa de farinha”, which is the place where manioc flour is produced, although the municipality called “ Cruzeiro do Sul” industrializes and commercialize the

F - Meat and Dairy Products

Acre State has varied herds standing out, in order of importance the bovines, swine and sheep herd.

Within Acre State the beef cut sector, the “nelore” race" prevails. Properly adapted to the Amazonian atmosphere in located properties along BR-364 and BR 317. The average rate of abate is 18%, and it is considered that there have been abated 105.000 heads annually. To the price of R$ 330,00 each animal abated, the income in the livestock gyrates in it turns from R$ 31,5 million a year.

In 1996, the effective production of the main herds were as follow:

Considering that the meat demand is limited by the population low purchasing power, this activity has been producing surpluses that can be commercialised in numbers such as 2.451 tons in the harvest 1993/94, destined to the markets of Manaus-AM and Porto Velho-RO, generating income of R$ 3,3 millions to the State.

The State milk production concentrates on the municipalities of Senator Guiomard, Xapuri, Plácido de Castro, Bujari and Porto Acre, and also the state capital Rio Branco. The offer of milk, different from other regions in the country, is seasonal either to the industry as well as to the producers. During the harvest period, on the months of October, November and December the crop has its main production, although that is the time of the year that the local highways function more precariousness, because of the rain season.

Other factors that also determine the offer of the State production are the land productivity, the labour force and the herds, as well as the price politics for the products.

Regarding the demand, the black topping of BR-364 highway brought increase of the population, and along with this, the increment of the consumption of foods, including milk, representing an increment of the “in natura” and industrialized product consumption. When the Milk Distribution Program was on, 65% of the pasteurised product was consumed by low-income population of which is a good indicator of the size of the market for the product in the area.

The increase of the population purchasing, through programs of job generation and income, together with the activity verticalization that also generates job and income, stimulates the increase of production and the consumption. Today the State demand is at least three times the production. The activity verticalization turns into reachable markets today cannot be reached, and allows the productive structure invigoration in the field, improving internal action and generating exchange value for the State.

The predominant milk cattle in the State have double aptitude. Either for beef or milk, without defined race, but using a mixed breed of the Girolandia with Holsteins, imported from south of the country and with milk potential above local average.

Another important aspect of the activity is the profile of the State milk producer. The small producer, producing up to 100 lt per day, does almost the entire volume produced.
Milk Production Structure may 1994

3.2 Potential Products of Broad Market   >>Back to the top

In this group, there are products hierarchically characterized by a tendencial market profile which correspond to cultures or economic activities that already have production tradition in the area, and/or those that for the time being don't exist, but that have potential and they blunt as relevant in the market local, regional and international providing indicative of investments.
Table of Potentialities for provisioning of broad market
(State and Sub-areas 05, 06 and 07) - 1999

(*) Sub Region 05: including 12 municipalities - Rio Branco, Acrelândia, Assis Brasil, Brasiléia, Bujari, Capixaba, Epitaciolândia, Plácido de Castro, Porto Acre, Senador Guiomard, Sena Madureira e Xapuri;

Sub Region 06: including 06 municipalities - Feijó, Jordão, Manuel Urbano, Marechal Thaumaturgo, Santa Rosa do Purus e Tarauacá;

Sub Region 07 : including 04 municipalities - Cruzeiro do Sul, Mâncio Lima, Porto Walter e Rodrigues Alves.

 

A - Logging Potential

Logging activities in the Amazon Region are restricted by specific legislation, so that those activities can be developed on a sustainable way, preserving the environment.

The main legal/institutional aspects regulating logging activities are:

Norms that regulate forest reposition: Law 4,771/65 (Forest Code with changes in Law 7,803/89) articles 19, 20 and 21 and Legal Instruction # 01/96 MMA;
Norms that regulate forest management: Lei 4,771/65 (Forest Code - Articles 15 e 19 - Decree 1,282/94). Medida Provisória 1,511/95. Portaria Normativa #. 048/95 - IBAMA; and,
Decree 2,788/98, that changes several articles of Decree 1,284/94. One of the main changes, is the suspension of EIA/RIMA for all the Plans for Forest management and the determination of different management at small and medium properties.

Studies performed in the Acre State postulate that there are needs and also there are conditions to formulate a forest/logging sector model of development in a balanced way. That would take into consideration, the need of perpetuating the activity and a higher social contribution to the population living in the forest. Knowing that, the State has defined parameters for the development of the activity.

Area of forest production defined according to present production, and on projections growth in the sector for the next 10 years, a rate of annual growth of 5 percent;

Introduction of sustainable management, considering principles and guidelines accepted in national and international levels, and the characteristics of the forests in question. As an initial indicative, highly conservative, it has been assumed a growth of 0.7 m3/ha/year, and a deforestation volume of 20m3/ha;

Considering the market as a key element for the introduction of forest sustainability in the forest sector, being 50% of volume destined to the international market and 50% to the national market.

Transformation of potentialities into “in species” products, sawing woods and laminated/plywood. Products of higher aggregate value will be given stimulus, and at medium range would be the basis to the growth of revenues generated by the sector, offsetting volume increase of primary products; and

Implantation of small and medium sizes industrial facilities.

For this study purpose, there were two activities excluded:

Plywood and laminated industry;

Laminated and plywood industry;

A 1 - Sawed and beneficed wood  >>Back to the top

The lumbering resources potential the Amazon Region is unquestionable. In fact, there are approximately 3500 catalogued forest species on dry land and wetlands.

Acre State in almost its totality is covered by tropical rainforest, with the same characteristics of the others in the Amazon. Considering the soil use

 

The potential of the areas defined for forest production, with species that are industrially used are 44 species, from which only one third cover 78% of the total existent wood volume.

Forest Approach in Acre State. per species. 1994

 

The logging activity in the forest is incipient in the entire Acre State and most of its production, in logs, is destined to the industries installed in the Amazonas State. This commercialisation of logs that earlier was exclusively of noble species with predominance of the mahogany, comes in the last years to other species' used in the laminate production, s or instance the samauma.

The annual production the follows:

 

The transformation industry represented by a few small and medium sizes sawmills and by a laminated factory. The great majority of the production is commercialised in the national market and/or exported .

O Acre exports sawed wood and beneficiaries traditionally the he/she eat to proceed:
Table of exportation of Wood of the State of Acre - 1996-97 (US$ Fob)
Product 1996 1997

A.2 Plywood/ Laminate

In South America, Brazil is the largest producer of laminated wood, elaborated with raw material originated from of existing plantations in the southeast and also from tropical wood of the Amazon Region. It is considered that the stock of the original tropical wood is of 60 million cubic meters. Due to environmentalists' pressures, the reduction was verified in the wood offer in the southeast of Asia and in the United States. That fact propitiated the Brazilian producers a space in the international market with our semi industrialized and plywood. This last one acts in it measured, 22% of the total exports of the sub-section

Studies accomplished by FAG esteem that there is a growth tendency in the laminated consumption, plywood and wood foils I a world level. These estimates suggest that by the year 2010, there will be the growth of 121%. It also implies that after 1991 the consumption of those products increased, whose volume can reach 313 million m3. Out of these, 37,3% will be demanded by Europe; 33,5% go to North and Central America; 20,5% go to Asia and 5,4% goes to South America. Brazil will have the participation of 4,7% in the global consumption and 86,2% of South
The annual consumption of wood, can be observed

Industrial Consumption of Wood (Logs) in Acre State o - 1995

The projection of the wood industry activity contribution, in term of income can be seen on the table bellow

Estimated Sustained Management area Estimate of Incomes,
Imposed and Jobs generated in the State.

Estimate of Incomes, Imposed and Jobs generated in the State.

In the following table are presented projections of the result of wood extractive traditional activity in a reserve forest:
Dicrimination

Plywood and Laminated

B - Fish farming   >>Back to the top

The fishing in the Amazon Region is basically an extractives activity, conditioned, therefore, by the rivers water level with its overproduction during the dry season and its shortage during rain season. This facts influence decisively on final price of the product. An alternative to minimizes the effect of the seasonal variation is the fish farming, which can to propitiate balances between the offer and demand in the regional market, stabilizing the prices along the year, it will also contribute to increase the commercialise not only to other parts of the country but also to the international market.

The fish farming is a productive activity that allows the balance among the economic interest and the rational exploitation of nature. It presents high productivity equal hectare (between 2.500 and 60.000 kg ha/year), using less earth surface, in comparison with other activities, as the livestock, that it varies from 70 to 300 kg ha/year.

The Brazilian Amazon Region has in its water reserves the major potential in earth for production of fresh water fish, either in existing lakes and rivers, or in developing rational fish farming through nurseries that meditate from the production of the little fish for procreation (alevinos), passing for the creation itself, until reaching the final product ready for consumption.

This activity, inhibited maybe by the natural production, there are only few years has been faced by the entrepreneurs as important, not only for environmental subjects, but for having demonstrated capacity to offer return to their investments.

This section has great possible branches that add high values to the final product, such as fish filet and fish smoking.

Currently the average Brazilian consumption of fish is esteemed in 4 kg per capita/year propitiating a potential Brazilian market of more than 600 thousand tons of fish per year. The average consumption of fish in the Amazon Region is 44 kg per capita/year. Today this area native fishing produces only 1/8 % of the demand, giving to this segment an unique attraction and a vast potential for entrepreneurs that invest in the activity of cultivation of fish (especially the tambaqui), not only to the national market as well as the international one.

According to FAG, the only commodity that will have its price risen in the year 2020 it will be the fish.

The main reasons to this tendency of growth of the fish farming in Acre can link:

The offer in the state market is deficient (fish is bought out of the State);
The prices in the state market, especially in Rio Branco, which allows high price in the market to the producer;
It is an activity ecologically correct, fact that propitiates easier access to financings, accreditations and authorization of the

government public organisms;
Access to the Brazilian potential market, with no prohibitive transport cost;
Climate and resources hídricos, in you vary sub-areas of the State, arriving close of the ideal for the species today produced; and
O market for exportation is extremely promising since there is regularity in the offer and service to the requested patterns of quality. In this market, the producers can have superior profit than the one obtained the domestic
Data of economical viability

C - Manioc Starch

The manioc starch is one of the main products, in planted area, of the Amazon Region, planted either for commercial purpose or for subsistence. Product consumed in flour form and produced, by hand and in craft form, the manioc starch is still underestimate in its potential production. This primary form of production creates a considerable waste.

The potential for production of the manioc starch and its industrialization in the State can be verified by the production volume.

Production of Manioc Starch in Acre State - 1996

The industrialization appears as one in the ways of larger possibility use of the product that can be addressed for the human consumption, in the form of raw flour or toast and manioc flour (sweet and acidity), and for animal consumption, in the form of shavings and residues of the own it elaborates or, simply, transformed in starch for industrial ends.

The world manioc starch production is 34 million tons per year, with estimated value in 14 billions dollars. It is expected that the production 40 million tons in the year 2000. The major producer is the United States, with 14 million tons, followed by the Asian countries with 11 million, the European Union with 6 million, Latin America with 1/3 million, and of this total, one country, Brazil produces 1 million tons.

The diversity of application of the manioc starch as raw material in the industry offers a wide opportunity of Brazilian domestic market, but there are also great possibilities to extend this action to supply also the foreign market. Worldwide it is considered that 95% of the starch is used in the industry and only 5% is used for human feeding. In the Acre State production the opposite happens.

In Brazil, the largest consumer of manioc starch is São Paulo State. Approximately, 80% is used in the refrigerating industry and also in bakeries. The remaining, are used among the chemistries, pharmaceutical, textile and other industries. The other great consumers are States of Santa Catarina and Rio de Janeiro.

The conquer, therefore, of domestic and international markets depends of the good quality pattern and of a rationalization of the costs with will reflex directly on the price, making them more competitive, mainly to the international market.

Data of economical viability:
Manioc Starch

D - Processing of tropical fruits: cupuaçu   >>Back to the top

It is very difficult to foresee which would be the potential market of cupuaçu. It is a fruit that is now getting wide penetration in the national market. There has to be determined who is the consumer for this fruit in the big cities in the country and out of the country. It's market expansion should be conditioned to the pressures of the regional and national demand, that should have grown in function of the population growth and for the lowering of the prices considered high in relation to other fruits, analysing its small offer.

The conquer of new markets demands competence, aggressiveness, presentation of a product reliable, hygienic and with warranty offer which are the most important qualities. This effort will depend on public and private investors that will diffuse this product in the fairs, exhibitions, official events, among other, in the country and in internationally.

The cupuaçu demand has been a major than the offer, what makes it reach high prices, competing with most of the fruits (exotic or native) marketed in the area. Statistical projections indicate that the acceptance of the cupuaçu and other products made with it reaches an index of 7% of the regional population.

In 1996 State of the Para exported 33 thousand liters of integral pulp of cupuaçu. This data ratifies the potentiality of the cupuaçu in spite of not existing an offer volume and enough organization of production to assist the demand. There have been already contacts with Research Institutions of Englishmen, North American, Japanese, French and Swedish with great volume of the product requests. These requests were not concluded due to

Data economical feasibility:

Cupuaçu

 

 

E - Pupunheira Palm Heart   >>Back to the top

The Amazon Region supports more than 95% of the national production of native palm heart, mainly, of the native extraction. The installation of the industries in the Amazon Region began in the end of the sixties, in Pará State.

The Palm Heart preserve industry presents a relatively simple technological structure that doesn't demand high investments and it depends on the efficiency of the manual operations of cut and packaging of the product.

The production of palm heart preserve is estimating around 300 tons of liquid weight. The relationship product rude industrialization natural palm heart varies enough in function of the intrinsic quality of the heads “estipes”.

The national and the international markets are considered of great potential for the palm heart. Therefore, the Brazilian production of palm heart already reached 132.104 tons in 1985, although in 1994, the Brazilian production fell to 21.900 tons, representing a fall of 83% in relation to 1985. One of the responsible factors for this situation was, probably, the shortage of the raw material due to the exhaustion of the reservations closer of the producing centers, together with the restrictions of some countries against products originated from forest extraction. Now, the market of palm heart has been retaken increasing the production through the extraction of the matter - it excels originating from of the cultivation of the pupunha.

For palm heart agribusiness, the pupunheira appear as an excellent alternative, due to its rusticity, precocity, fertility and excellent quality of the palm heart.

Rusticity, because the pupunheira grows even in soils of low fertility. Precocity, because even in poor soils, common in the Amazon Region, it starts to produce within two years. The fertility allows the natural renewal of the plant, and makes possible successive cuts for more than ten years.

Each palm heart weighs from 100 to 250 grams. The flavor is sweetener than the other palm trees, turn to be sold “in natura” in fairs and markets, because it doesn't get dark after cut due to the absence of the polife-noloxidase enzyme. The tender and soft part of the stem can be used as palm heart also and it can weight from 500 to 1.500 grams. There are also other products made with the pupunheira, such as pupunha four, very used in Acre for snacks, the oil and the starch.

Concerning the international market, European countries like France, Spain and Italy are traditional palm heart importers of the Brazilian preserve. The demand of these countries corresponds of more than half of the Brazilian exports being France the main consumer of the product. Another group of demanding countries is in the American continent, being the United States main buyer. It is important to notice that among the imports of canned palm heart accomplished by the United States, the

Data of economical feasibility:

F - Extraction of safrol from the long pepper  >>Back to the top

The long pepper is a native plant that grows in the forest (capoeira) areas in Acre State. There are three species of this plant in the world. One of these three is originated from the Acre State the called Piper hispedinervum, found and named by researchers of the National Institute of Researches of the Amazon Region - INPA. Its main characteristic is to have anoil with safrol tenors above 90%. 0 safrol has high economical value, and by-products of this oil are used in the cosmetics industry (heliotrope, with properties of aromatic fixative) and in the production of biodegradable insecticides (piperonila butoxico).

The annual consumption of safrol, in the world market, it exceeds the 3.000 tons and the price of this oil in the international market has varied between US$ 4,5 and US$ 8,0 0 kg. Brazil has been the world larger producer of safrol, when it was extracted from a native tree from the Southern States called sassafrás. In 1991, 0 IBAMA prohibited the extraction of the oil from this trees, due to the risk of extinction of the species. Since then, Brazil industry is importing the safrol from China and/or Vietnam.

However, the production of these countries doesn't assist the market demand. In China, the production of safrol is make by cutting the native trees, also in extinction risk, and in Vietnam large logs and roots of dead trees are used implying that in a certain period of time their production also can be committed.

In this context, the long pepper comes as an alternative to supply the world demand for safrol, mainly because it is a plant of fast growth, with its first cut could be made after 8 months of planting. Also the long pepper should be explored in a renewable way, once its oil and are extracted of the leaves and fine branches, allowing the recovery of the plant.

EMBRAPA/AC, since 1992, is researching the long pepper with the objective having the long pepper agriculture as a possible economical alternative activity to agriculture families of the Amazon Region. Currently they are working with the development of the production systems and industrialization of this culture. The planting is initiated with a population of 10.000 plants/ha, with spacing of (1 m x 1 m) between lines and plants. .

Results obtained by the researches of EMBRAPA/AC, showed that the long pepper can reach an annual production of 250 kg of essence oil per hectare, with more than 90% of safrol .

Long Pepper in the State of Acre -1999/2003 (Forecast of Implantation)

Currently, EMBRAPA/AC, INCRA, BASA and EMATER/AC are beginning to implant three production and industrialization poles of the long pepper agriculture, in the colonization projects of Pedro Peixoto, Humaita and Quixada (Brasileia), where three agro industries will be installed, one in each pole and with financing of FNO (PROCERA and PRORURAl).

There is a great interest from the safrol processing industry in Brazil(GEROMA of Brazil, PIRESA PIRETRO) and in Italy (ENDURÃ SPA) in the production of the long pepper, therefore it is urgent the need of executing actions seeking to take advantage of this opportunity to benefit Acre State.

Data of economical feasibility
Pepper-long safrol extraction

G - Vegetable Leather

The production of coagulated latex in Acre constitutes one of the main extractive activities with a production of. 5.000 ton/year.

According to IBGE data the State production is the following.

The vegetal leather, which raw material is the coagulated latex, appear in the market through the evolution of the environmental policies, trying to find alternatives to a sustained development of the Region, specially through the promotion of natural product, which production is from the native people that live in the region, specially in Acre.

The vegetal leather development and the first attempts of producing it began in 91, with only 6 involved producers. Today it involves about 200 producing with production capacity around 100.000 laminates. Although the market in expansion, the supply are restrict to the producing of four associations involved in the Vegetable Leather Project. Since 1991 they have been commercialised in the markets of Rio de Janeiro and São Paulo approximately 60.000 laminate of vegetable leather.

It is a product composed of cloth and natural latex smoked, having the appearance of animal leather. It appears in the market as an excellent alternative for the extraction of the rubber, for presenting better prices than the natural rubber and for having an expanding market.

Currently the vegetable leather has been used for making clothes, bags, purses, and shoes. It presents a pleasant visual aspect and for being an “ecological correct product”. It is still produced in a craft way; it shall receive innovations technologies seeking the product quality. Despite of that it is being popularised quickly through fairs promoted by the organizations non - profit and for the artisan. Hereafter it can compete in scale with similar materials, as the artificial leathers and the animal leather, among others. The workmanships, objects and made clothing's were all commercialised in the national and international market. Vegetal Leather laminates manufactured by them are being exported for the United States and Europe in experimental character.

The vegetal leather quality is related with the quality of the latex, of the sack or cotton fabric, with the uniformity of the smoking (impermeable film), with the efficiency of the having it become impermeable, with the uniformity of the rubber, special cares with the transportation and storage. Still there is a lack of specific norm of classification, however, the closer the product is from the listed characteristic, and the better shall be the commercialisation.

To transform 15 thousand sacks in impermeable, it will commercialise 2.000 m2 of vegetable leather. Each rubber impermeable "sack" has an income of 0,8 m2 of vegetable leather. The

commercialisation average price varies among US$ 10,00 the US$ 12,50 equal m2.

There are evidences that the demand is growing for vegetable leather. Besides the fashion industry that already uses some of the product for shoes, belts and purses, there is another segment that is trying to introduce tit in the green market. There are evidences that the vegetable leather is far away from balancing with the demand, however that tendency will only be able to be maintained if they technological improvements occurs in the production and in the product quality.

The Ministry of the Army is interested in having special pieces made of vegetal leather. In the end of 1997, the Brazilian Army ordered from the Vegetable Leather Company of the Amazon Region, promotional material, as well as Brazilian companies, as Cia. Ypiranga of Petroleum, and multinationals as the Coca Cola, that uses the vegetable leather products in their lines of institutional gifts.

The vegetal leather is a product that is now having great acceptance and it has entered the national and international markets, after the exhibitions done in the Conference of the United Nations for the Environment and the Development - Rio 92, where there were sold more
Data of economical feasibility

Vegetal leather  >>Back to the top

H - Brazil nut

The nut, acquaintance by different names: almond tree. of the - America (already abandoned), Maranhão nut (already in disuse), bonnet of the old Portuguese, Pará nut and Brazil nut (classification of the Ministry of the Agriculture). Due to Peru and Bolivian initiatives in 1992, in an international convention about Brazil nut it was proposed and approved the nut being named Amazon nut, because this nut can also be found on these countries. This new name is going to be used soon.

The Brazil nut tree has been accentuating preference for the dry lands and of clay characteristics soil. Pará and Acre States are the great centres producing of the nut. It is interesting to note that, with the falling of the rubber boom period in the beginning of the 20th century, up to then the main support of the economy of the Amazon Region, the nut substituted the hevea in its supporting role of the economical stability of the extractive areas of the high rivers.

In Acre State, the Brazil nut tree can be found in the Rio Branco area, in all Acre river valley and part of the Purus valley, not happening along the Juruá river, towards the north of the State.

Many applications have been found for the Brazil nut tree. The" hedgehogs" can be used as fuel or in the making of several objects. However, the product of major value is the nut, considered rich food in proteins, lipids and vitamins, could be consumed in nature or as ingredient of a great variety of recipes. Its oil has good digest coefficient, and its extract can be used as lubricant in the modern aviation. From the residue of that extraction, for mechanical process or using solvents, one can obtains - if respectively the flour and the ration of wide use in human feeding, as well as for animal feeding. The Brazil nut milk, similar to the coconut milk is rich in proteins, and other by-product of great value in the regional cookery, with good market potential. This tree wood presents good properties for it uses in the shipbuilding and civil industry. The peel of the Brazil nut tree supplies tow of superior quality for embarkations caulking.

However, it is a protect by law tree, being prohibited its lumbering due to its recognized economical value of its fruits a extractive forest product and its importance to the socio economical sustained exploitation of the forest.

The main types of businesses that can be developed are:

Commercial planting for the nut production (with peel and dried)
Decentralized unit to benefit the nut;
Agribusiness of small size processing the nut;

Manufactures of soy cookie with nut and it also manufacture the nut milk and flour.

The offer for the Brazil nut in the Amazon Region is extractive in its total. IBGE data indicates that the offer for the product, in 1992, was of 25.303 ton, with the State of Acre the main producer. The total regional production
Brazil nut Producing States in the Amazon Region -1996

The production of Acre reached 6.438,78 ton., distributed as following:
Brazil Nut Production in Acre State - 1996

The world demand of nuts is concentrated in the "First World" and it is growing to taxes of 4% per year. The Brazilian demand this around 3% to 5%, of the national production. The three majors companies exporters control more than 50% of the exporter market. Other twenty companies that benefit and export the product control the remaining.

The Brazil nut prices for commercialisation are the following:  >>Back to the top
Brazil Nut Prices - 1997

As previously seen, almost the total Brazil nut production is destined to the international market. The world market for eatable nuts reaches US$ 2 billion, of which Brazil participates with less than 2% (about of US$ 50 millions). The main importer of the product and the United States, with 9,5 tons a year, of that total one, 74% came from Brazil, 13% of Bolivia, 9% of Peru and only 4% of other countries. United Kingdom, Germany and Italy also constitute important markets for the Brazilian product.
Brazil nut Exports 1996-1998 in US$FOB

The Brazil nut potential market is in the increase of use of the product by the countries that import, and countries with high income and in the reduction of its price for the markets in development. The increase of the offer will remove the market share of other eatable nuts in importers countries, while it will lower the price of the nuts in the world market, encouraging the increase of demand in the countries of smaller income. Thus, the Brazil nut market presents potential growth, looking to the demand side, as for the substitution of other nuts, which characterizes the international market of nuts and almonds. It is estimated that the participation Brazil nut could reach US$ 67 million in the Brazilian exports agenda.

Thus, the Brazil nut market presents potential growth, looking to the demand side, as for the substitution of other nuts, which characterizes the international market of nuts and almonds. It is estimated that the participation Brazil nut could reach US$ 67 million in the Brazilian exports agenda.
Data of economical feasibility

Brazil nut improvement (agribusiness for export)

I - Ecological Tourism

According to the World Travel Council and Tourism, that it congregates the largest multinational corporations of the section, the world tourist market used, in 1991, 183 million people, in 1994, 204 million, in other words, one of each nine workers of the world.

In the period 1985/93, in spite of the world recession the number of tourists that it went international trips reached from 380 to 500 million. The World Organization of Tourism esteems that that numbers will reach 661 million in the year 2000.

The financial incomes earned by the international tourism, leaving the transportation sector incomes out, reached the US$ 324 billion in 1993, of the which, Europe had 52%, America, 27%, Far East and Pacific, 16% and for Africa, Middle East and other areas of Asia, the remaining 5%. The Acre State presents attractions to develop the ecological tourism, visualizing that we have rich rivers for fishing, different natural beauties from the other regions of the country. The most capable municipal districts for the development of the ecological tourism are:

. Rio Branco capital of the State, and historically, it was already “the rubber capital” last century. It presents as main natural and ecological tourist attractions like the Horto Forest, several parks, among which the most important is the Environmental Park Chico Mendes, a Zoo Botanic park, river beaches and lakes. It already has an infrastructure of hotels and restaurants.

.Brasileia is a municipal district that has strong Bolivian influence for its geographical location. The most important natural tourist attractions are the river beaches, creeks and the Acre Rio. There is an infrastructure of hotels and restaurants to receive tourists.

.Cruzeiro do Sul is 640 km far from the capital of the State. Their most important ecological tourist attractions are the rivers and creeks, besides the National Park of the Mountain of the Divisor, known as
"Mountain of the Moas", with 605 thousand ha, it comprises the largest diversity of palm trees in the country. A hundred km from Cruzeiro do Sul, a thermal source of sulphurous waters exists, suitable for the ecological resort. This municipal district has basic infrastructure of hotels and restaurants to receive tourists.
. Plácido of Castro also have natural attractions to the tourist with creeks, and the Abuna River, excellent for fishing and with 10 meters high waterfalls and beautiful beaches. There are also native rubber plantations and some hotel infrastructure for the tourist. The boundary between Brazil and Bolivia are in this municipal district.
. Xapuri owns the majors extractive reservations of the entire State, formally legalized by the Federal Government. The most important is theChico Mendes Reserve, in honour to environmentalist Leader of the same name. It has an area of 976.570ha andd it includes other municipalities; Besides Xapuri, it includes the municipalities of Senator Guiomard, Brasileia, Sena Madureira, Assis Brasil and Capixaba. There are, also, natural attractions as beaches and waterfalls. There is an infrastructure of hotels and restaurants to receive tourists.

. Program of incentives that allows the imports of raw materials, by products and components for the industrialization of goods with destination exclusively for exports. PEXPAM grants the following incentives:

Exemption of Taxes over Imports - II;
Exemption of Taxes over Exports IE;
Exemption of Sales Taxes ICMS
Exemption of payment on fees, public prices and gains due to any institutions of public administration;
Will not be required to comply with Basic Productive Process PPB;
Will be authorized for imports extra-quota previously granted;
Will be granted additional imports value as a premium;
Will be given a premium credit making transport costs even;

4. FISCAL AND FINANCIAL INCENTIVES FOR ACRE STATE  >>Back to the top

4.1. Federal Incentives

A Incentives administrated by the Manaus Free Trade Zone Superintendency (SUfRAMA).

SUFRAMA administrates the concession of fiscal incentives granted for industrial projects for installation in the Manaus Free Trade Zone, which are also extended to the Western Amazon States:

1 - Exemption of Taxes over Industrialized Products -IPI :

. For products made in the Manaus Free Trade Zone - ZFM;
. For merchandises (including capital goods) from overseas origin for consumption in the ZFM and Areas of Free trade - ALCs;
. For merchandises from overseas origin to be consumed in the Western Amazon when listed in Portaria Interministerial n.Q 300/96;
. For merchandises of national origin coming into ZFM, Areas of Free Trade ALCs, and all other areas in the Western Amazon; and
. For products manufactured using agriculture raw materials and vegetal extractives of regional production along all the localities in the Western Amazon.

2 - Tax Credits over Industrialized Products - IPI:

. The credit must be calculated as if the taxes were due, always when the manufactured products using agriculture raw materials and vegetal extractives of regional production are used as raw materials, intermediaries products or packing materials in the industrialization anywhere in the national territory, of those products effectively required to comply with the payment of IPI.

3 - Exemption of Import Taxes:

. For the merchandise from overseas origin when listed in Portaria Interministerial n.Q 300/96, for the Western Amazon.

4 - Special Exports Program of the Western Amazon - PEXPAM:

5 - PORTARIA INTERMINISTERIAL MF/MPO N.Q 300, of 12/20/1996:  >>Back to the top

. Approves a set of products and goods to be sold with the benefits within the decree of law no. .2 356, of 08/15/68. In the specific case of the State of Amazonas, the legislation approves, among others:
. Dry fishes, salty or wet-salty, smoked
. Fishes, even cooked before and during the smoking process;
. Milk and cream;
. Vegetable products, fresh or air-refrigerated;
. Fresh fruits;
. Coffee;
. Wheat flour and cereals
. Machines and tools for agriculture, horticulture, and others
. Machines and tools for grinding industry or cereals treating;
. Machines-tools for woodworking, rubber or plastics, leather, skins, rocks or ceramic products.

In case of industrial facilities located in the Manaus Free Trade Zone, besides the above listed incentives, SUFRAMA grants:

. Exemption of Taxes over Exports for products made in the Manaus Free Trade Zone;
. Special regimen for warehousing merchandises with the suspension of duties at the Entreposto Internacional da Zona Franca de Manaus - EIZOF. It is a very important instrument supporting the objective of high competitivity for ZFM, with the following advantages:
. Prices of warehousing are competitive internationally;
. Late payment of duties over goods at time of effective use;
. Entrance of merchandises with or without exchange payment;
. Storage of merchandises will be kept for 5 years.

B - Incentives under ruling of the Amazon Development Agency ADA.

ADA - Amazon Development Agency administrates the benefits for industrial plants, agricultural and others in the region.

1. Corporate Income Tax - IR:

. Reduction of 75% of corporate income tax until the year 2003,

granted for those industrial facilities, agricultural and basic services given for projects of implantation approved; and
. Reduction of 50% of corporate income tax from 2004 to 2008, granted to facilities with projects of expansion and/or innovation technology and/or diversification approved; and
. Decreasing of 25% of corporate income tax from 2009 to 2013, granted to facilities with projects of expansion and /or innovation technology and/or diversification approved.

2. Fund of Investments of the Amazon - FINAM:

. Financial credit for investments on fixed assets; and
. Corporate that opts for the alternative in reducing 18% its income tax due, directed for investment in the Amazon, which can be done via FINAM, for those projects of investment facilities to be approved by the Secretary for Development of the Amazon, or the corporate may have its own project approved to receive the financial funding.

C - Financial Sources under ruling of Banco da Amazônia (BASA)

North Constitutional Fund - FNO

The FNO financial fund has been created by law no. 7827, of 09/27/89, that regulates the article 159, incise l, line "c" of the Federal Constitution.. Its objective is the contribution for economic and social development of North region, through the execution of financial programs directing those productive activities in operation at areas relating to ecology, social, technology and economic in agricultural, industrial and tourism sectors.

FNO comprises the following programs:

. Financial Program Supporting Micro-Enterprises from Selected Activities

PROMICRO
. Its objective is creating conditions for the implantation of small agri- industrial units in the region, as a mechanism to carry out formation of productive chains necessary to support the agriculture production of small-organized rural family and the strengthening of regional economy.

Program of Industrial Development - PRODESIN

Its objective is to promote the development of the transformation industry in North region by supporting the implantation, expansion and/or innovation technology, rationalization and relocation of facilities in operation in several segments in the industrial sector.

. Program Supporting Agri-Industrial Development PROAGRIN

The program aims at supporting those entrepreneurships initiatives towards the implantation, expansion, and innovation technology of agri-industrial units in the Region. It creates conditions for local processing of raw material of agriculture origin, livestock and forestal units, generating employment and incomes in the region. To strengthen the productive activities in the agricultural sector, promoting high competition of agriculture products, livestock and forestall so that they can attend the demand of regional market and look for markets share nationally, increasing regional value-added.

. Program for Development of Ecological Tourism - PRODETUR

Its objective is to promote the development of ecotourism at localities in the Amazon, having ecological potential, in a conservative way, trying to bring together the exploitation of the environment and harmony with nature, as well as offer the tourists an intimate contact with the natural resources of the region, seeking to create an ecological conscience.

. Program Supporting Conventional Tourism - PROGETUR

The program supports business steps for investments in conventional tourism, promoting the implantation, expansion, innovation technology and diversification of infrastructure and touristic means (hotels and transportation facilities) in pioneering areas, expanding the economic boundary regional or along the cities, preferably, in the hinterlands with proven deficit in hotel rooms.

. Program Supporting Technologic Capacity - PROCATEC
Its objective is to support the development of regional system for science and technology, promoting generation and transference of innovation technologies, through measures connecting the techno-scientific base with the private productive system, aiming at strengthening the creation of poles for modernization of regional business activities.

D - Incentives under ruling of Banco de Desenvolvimento Economico e Social BNDES.

. Program Amazonia Integrated PAI

It was created by Dcc.Dir-369/94 BNDES, of 12/01/94. BNDES System finances though this program those industrial facilities taken by private enterprises that must be generators of employment and income, having unquestionable competitive advantages, able to promote North region integration with the rest of the country and with overseas market, being consistent with the environmental guidelines for the Amazon region.

Through FINAME - Special Agency for Industrial Financing, BNDES offer a set of lines of credits, such as the following, among others:

. FINAME Automatic Program

Objecting to finance individual firms, companies of the private sectors, operating in the country, for purchasing directly from the manufacture units, machines and equipment, brand new, and made in Brazil.

. FINAME Special Program

Financing users and manufacturing units for acquisition or Sales /production, respectively, of machines, equipment, brand new, made in Brazil and that comply with one among the following conditions:

.Be produced under purchasing order, presenting relevant technological advancement or nationalization index

. Being in competition with similar imports; and

. Destined to projects of high national concern.

. FINAME Additional Credit

To complement approved financing by FINAME for purchasing

machines, equipment from associated companies to ABIMAQ, SIMEFRE, ABICOMP, ABCPAL, ABINEE, ABIMO, and SINAEMO, which must be participating at Fundo OURONMAQ of Banco do Brasil.

. FEPEMI Special Financial Fund Supporting Small and Median Industrial Companies.

Its objective is to support training of human capital and technological improvements stimulating the increase in productivity and output and/or promoting better administrative structures of enterprises.

E - Incentives under administration of State of Amazonas

Law no. 1939, created on December 27, 1989, and complementary legislation. It grants fiscal and extra-fiscal incentives, in ordinance with the Constitutional principles, which are regulated by decrees and additional legislation to be published by the Executive Government of Amazonas taxes over sales of Industrial goods and Services - ICMS, as follows:

. Exemption of ICMS on imports of industrial goods from other states in Brazil;

. Credit granted on ICMS on purchases of industrial goods made in Brazil;

. Reduction on ICMS rates applied over industrial goods at the following levels:

. 45% for final products;

F- Administração by the brazilian Service of support to Micro and Small Business - SEBRAE

FAMPE- Guarantee’s Fund to micro business and companies of smail load

The fund has as objetive to make it possible to guarantees concession and to facilitate the access of the enterprises of small load to credit. With own financial and institutional resources, FAMPE allows the micro companies and the companies of small load, by means of the guarantee of SEBRAE, to finalize warranties to the loans that seek the development of new enterprises and/or that seek the development and improvemente of the existent enterprises.

4.2 - State Incentives

FIAC - Fund of Industrialization of Acre

Created by Law 1.019/92 with the intention of promoting the development of industrial activities. It finances up to 45% of ICMS to be collected, as well as sdudies and diggnoses. It stimulates the leasing of industrial areas at reduced prices for 5 years, being able to renewed the contract at market price; as well as treatment differentiated treatment for micro and small company in the administrative purchases and technical attendance for the solicitation of fiscal benefits, and managerial development.

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