By Álvaro Marcelino (UFPA)
Created in 1989, the Constitutional Financing Fund for the North (FNO) has a constitutional mission: to promote economic development in Brazil’s North region, reduce social inequalities, and respect the environment. However, more than three decades later, it is necessary to ask whether the fund has truly fulfilled this promise or whether it remains just rhetoric—promising much while delivering little structural transformation to the Amazon region.
Lots of money, little sectoral diversity
Between 2019 and 2022, the FNO financed over R$14 billion. Despite this considerable amount, the results have been uneven. In 2019, for example, nearly 50% of the funds were allocated to the agricultural and livestock sector, while areas such as technology, sustainable tourism, the creative economy, and family farming were largely sidelined. This concentration contradicts the guidelines of the National Policy for Regional Development (PNDR), institutionalized in 2007, which advocates for investment diversification as a means of achieving balanced territorial development.
This lack of sectoral diversity undermines the Amazonian economy itself, as the region continues to suffer from social challenges due to financing models that lack true democratization of access and fail to prioritize economic sectors linked to the socio-biodiversity of the Amazon biome.
Pará takes it all
The geographic concentration of resources is also a concern. The state of Pará has historically received the largest share of FNO financing—some years receiving more than half of the total funds. Meanwhile, neighboring states such as Acre, Roraima, and Amapá face chronic difficulties accessing the fund. This asymmetry reflects a decision-making process dominated by lobbying, low transparency, centralized control, and limited participation from local communities and municipal governments.
As a result, the FNO’s implementation has been misaligned with the PNDR’s economic principles. The fund’s allocation appears to follow the financial rules of the National Financial System more than the real needs of the regional economy—that is, of local productive forces. The prevailing banking logic, based on the “risk versus return” dilemma, has institutionally overridden the fight against poverty, structural unemployment, and the deep-rooted hopelessness that still plagues many parts of the Amazon.
What about family farming?
Another critical issue is how the fund treats family farming. From 2007 to 2014, there was a significant increase in funding for this segment, reflecting a productive inclusion effort. However, this trend reversed after 2015. The drop in credit volume was intensified by shifts in economic policy, fiscal constraints, and the declining political priority of the sector.
Moreover, the modernization financed by the fund primarily benefited large-scale activities like soy and cattle farming, while small producers struggled to access credit and technology. This is especially concerning in the Amazon, where family farming plays a strategic role in local income generation and environmental conservation.
A centralized, unparticipatory fund
The FNO management model remains overly centralized. Its main programs—such as “FNO – Amazon Entrepreneurial” and “FNO – Amazon Rural”—continue to benefit large enterprises. Meanwhile, initiatives focused on sustainability and social inclusion have marginal results. In 2023, for example, the program “FNO – ABC/Biodiversity” had no disbursements, and in previous years, it received only R$8.74 million—just 0.38% of the resources. The “FNO – Sustainable Amazon” program, despite aligning with the environmental agenda, disbursed only R$200.21 million (8.77% of previous operations) and nothing in 2023. These numbers show how little priority is given to projects with real potential to transform the Amazon region positively.
Another alarming factor is the continued financing of large-scale agriculture and infrastructure projects without proper environmental impact assessments. The expansion of cattle ranching and extensive farming—often funded by the FNO—is one of the main drivers of deforestation. By neglecting sustainable practices and failing to promote green economy alternatives, the fund perpetuates a cycle of environmental degradation and social exclusion. The centralized decision-making process, which overlooks the traditional knowledge of local populations, prevents the fund from becoming a true instrument of fair, balanced development adapted to the Amazon’s unique context.
A different path is possible
Nevertheless, an alternative path exists. Recent studies show that the FNO can generate positive impacts if its resources are applied more strategically. Sustainable projects tailored to the territorial specificities of the Amazon have the potential to improve both social and environmental indicators. A statistical analysis found that two principal components explain 86.11% of the variance in FNO data—suggesting that socioeconomic development and environmental sustainability are not opposing goals. On the contrary, they can be compatible when integrated into a well-structured strategy.
For example, the years 2012 and 2013 showed better outcomes due to stronger institutional coordination and increased investment. Conversely, the years 2007 and 2016, marked by poor performance and high deforestation rates, exposed the weaknesses of the existing model.
Conclusion: The FNO must reinvent itself
In conclusion, the FNO must reinvent itself. It is a powerful tool with transformative potential, but it has been underused and poorly directed. To fully fulfill its role as an agent of sustainable development in the North, the fund needs a new operational logic: more decentralization, greater social participation, support for family farming, and, above all, a genuine commitment to balancing economic growth with environmental protection.
The Amazon can wait no longer. The forest and its peoples are calling for public policies that reflect their realities and needs. And this new path must begin with how we choose to finance the future.
