This chapter analyses the functioning of the Brazilian agricultural innovation system. It discusses the role of the different actors and describes governance mechanisms to define priorities and evaluate performance. It analyses trends in agricultural R&D expenditure and sources of funding, the role of intellectual property protection in fostering knowledge markets, and outlines mechanisms used to facilitate knowledge transfers, including collaboration at the national level and the adoption of innovation at the farm or firm level.

This report is comprised of two volumes: (i) volume one: risk assessment; and (ii) volume two: risk management strategy. Volume one continues with chapter one, which characterizes the recent performance of the agriculture sector, including agro-climatic and market conditions. It also identifies the productive systems used for this analysis. Chapter two describes the main risks in the agricultural sector, capturing market, production, and enabling environment risks along the value chains involved in the selected productive system typologies.

The present study is part of an effort by the World Bank and the State of Bahia to assess agriculture sector risks as a contribution to the strategic economic development and poverty reduction agenda of the state government. It is composed of two phases: an agricultural sector risk identification and prioritization (volume one) and a risk management strategy and action plan (volume two).

In 2010 the Brazilian Government established a goal to reduce the emissions of greenhouse gases (GHG) by agriculture from 36.1 up to 38.9% in ten years (2010 -2020). To contribute for reaching part of this purpose in Tocantins State, Embrapa and other research and extension services partners have been conducting a project of technology transference on sustainable agricultural practices, including integrated crop-livestock-forestry (ICLF), since 2012.

In Pium, Tocantins state, Brazil, in 2012 Embrapa developed a technology transference project in partnership with the state?s rural extension service for the consolidation of low carbon emissions agriculture. The goal was to recover the degraded grasslands of the Trigueira farm (49°1'37.44"W and 10°24'58.84"S) with low cost using a crop-livestock system.

The "Technological Innovation Act", promulgated in Brazil in 2004, represents the main legal framework implemented to promote technological innovation and to delineate a favorable scenario for scientific development in Brazil. It regulates specially the relationship between Scientific and Technological Institutions (STI) - such as universities and public research institutes - and private companies in Brazil.

There is a blossoming of voluntary certification initiatives for sustainable agro-food products and production processes. With these certification initiatives come traceability in supply chains, to guarantee the sustainability of the products consumed. No systematic analysis exists of traceability systems for sustainability in agro-food supply chains.