Poison Dart Frog Ranching
to Protect Rainforest and Alleviate Poverty
Public Disclosure Authorized
Public Disclosure Authorized
Public Disclosure Authorized
Public Disclosure Authorized
29849
A MEDIUM SIZED PROJECT (MSP)APPLICATION
FROM THE INTERNATIONAL FINANCE CORPORATION (IFC)
TO THE GLOBAL ENVIRONMENT FACILITY(GEF)
MARCH 2003
TABLE OF CONTENTS
Section
Page No.
PROJECT SUMMARY ................................................................................................................ 1
PROJECT DESCRIPTION .......................................................................................................... 6
PROJECT RATIONALE & OBJECTIVES ......................................................................................... 6
SUSTAINABLE FROG PRODUCTION METHODS ............................................................................. 7
INTERNATIONAL MARKET FOR POISON DART FROGS ................................................................. 8
FROGS’ WELFARE DURING SHIPPING AND IN CAPTIVITY ........................................................... 9
GLOBALLY-SIGNIFICANT BIODIVERSITY CONSERVATION..................................... 11
HIGHLY DIVERSE FROG HABITAT.............................................................................................. 11
CONSERVATION VALUE OF PROJECT SITES ............................................................................... 11
ECOLOGICAL SIGNIFICANCE OF POISON DART FROGS .............................................................. 14
LAND OWNERSHIP STATUS ........................................................................................................ 14
BASELINE SITUATION............................................................................................................ 14
CONTINUED DEFORESTATION .................................................................................................... 15
Continued use of destructive agricultural practices.............................................................. 15
No Ecological Education. ...................................................................................................... 16
LIMITED OPPORTUNITIES FOR LOCAL INCOME GENERATION ................................................... 16
No Frog Business................................................................................................................... 16
No Frog-Related Ecotourism................................................................................................. 16
No Commercialization of other NTFPs. ................................................................................ 16
DECLINE IN FROG POPULATION ................................................................................................. 16
Continued Frog Smuggling.................................................................................................... 16
Persistent Barriers to Legal Exportation of Sustainably-Produced Frogs............................ 17
Frogs Threatened by Increased Climate Variability. ............................................................ 17
MISSED OPPORTUNITIES FOR REPLICATION .............................................................................. 17
EXPECTED PROJECT OUTCOMES...................................................................................... 17
FOREST PRESERVATION ............................................................................................................. 18
POVERTY ALLEVIATION............................................................................................................. 18
CONSERVATION OF POISON DART FROGS ................................................................................. 19
RELATED OUTCOMES ................................................................................................................. 19
PROJECT ACTIVITIES ............................................................................................................ 20
BUSINESS SUPPORT .................................................................................................................... 21
Start-Up Advice and Ongoing Business Incubation .............................................................. 21
Frog Breeding Equipment and Operation ............................................................................. 22
Collection Centers’ Equipment And Operation..................................................................... 22
Market Development.............................................................................................................. 23
EDUCATION AND TRAINING ....................................................................................................... 23
Local: Training for Frog Producers...................................................................................... 23
Local: Educational Outreach in Peru.................................................................................... 24
National: Training for INRENA and Customs Officials ........................................................ 24
COMPLEMENTARY STRATEGIES FOR FOREST PRESERVATION .................................................. 24
ii
Conservation Specialists........................................................................................................ 24
Ecotourism............................................................................................................................. 25
Sustainable Farming.............................................................................................................. 26
REPLICATION ............................................................................................................................. 26
Replication With Other Frog Species .................................................................................... 26
Replication With Other NTFPs.............................................................................................. 26
Replication in Other Countries for Commercial or Conservation Purposes......................... 27
MONITORING AND EVALUATION ............................................................................................... 27
PROJECT MANAGEMENT ............................................................................................................ 28
IMPLEMENTATION PLAN ..................................................................................................... 28
IMPLEMENTATION SCHEDULE .................................................................................................... 29
BUSINESS SUPPORT .................................................................................................................... 30
EDUCATION AND OUTREACH ..................................................................................................... 30
PROJECT MANAGEMENT AND ADMINISTRATION ....................................................................... 30
SUSTAINABILITY ANALYSIS ................................................................................................ 30
ENVIRONMENTAL SUSTAINABILITY: ......................................................................................... 30
SOCIAL SUSTAINABILITY: .......................................................................................................... 30
FINANCIAL SUSTAINABILITY: .................................................................................................... 31
RISK ASSESSMENT .................................................................................................................. 31
STAKEHOLDER IDENTIFICATION ..................................................................................... 33
COMMUNITY PARTICIPATION............................................................................................ 34
INCREMENTAL COST ASSESSMENT.................................................................................. 35
BUDGET ...................................................................................................................................... 38
MONITORING AND EVALUATION PLAN .......................................................................... 39
MONITORING: ............................................................................................................................ 39
EVALUATION:............................................................................................................................. 39
ANNEX 1: GLOBALLY-SIGNIFICANT CONSERVATION BENEFITS ........................... 40
ANNEX 2: SUMMARY OF BUSINESS PLAN FOR FROG EXPORT VENTURE............ 42
ANNEX 3: MARKET STUDY ................................................................................................... 43
CUSTOMER PROFILE................................................................................................................... 43
The General Public................................................................................................................ 43
Institutions ............................................................................................................................. 43
Pet Store Chains .................................................................................................................... 44
CURRENT UNITED STATES MARKET .......................................................................................... 44
Current Prices........................................................................................................................ 44
Current Competition and Market Leaders............................................................................. 45
PERUVIAN POISON DART FROGS MARKET ADVANTAGES......................................................... 45
MARKET DEMAND ..................................................................................................................... 46
MARKETING AND SELLING STRATEGY ...................................................................................... 47
ANNEX 4: FOCAL POINT ENDORSEMENT ........................................................................ 48
ANNEX 5: SUMMARY OF MONITORING & EVALUATION PLAN ............................... 49
LIST OF TABLES
Table 1: Priority 1 Conservation Zones linked to Frog Production Areas............. 13
Table 2: Summary of Project Outcomes and Indicators............................................ 19
Table 3: Initial Capitalization and Ownership of Frog Export Venture................. 28
Table 4: Implementation Schedule............................................................................... 29
Table 5: Project Risks and Corresponding Mitigation Strategies. ........................... 31
Table 6: Current Market Price Survey Data** ............................................................ 44
Table 7: Major U.S. Poison Dart Frog Breeders.......................................................... 45
Table 8: Annual Viable Sales Figures .......................................................................... 47
TABLE OF FIGURES
Figure
1:
Male
frog
with
tadpoles………………………………………………………… .….6
Figure
2:
Frog
Breeding
Vessel…………………………………………………………………6
Figure
3:
Hobbyist
with
terrarium………………………………………………………… ….7
Figure
4:
Geographic
Scope
of
Frog
Production
Areas………………………………… . ….9
Figure
5:
Recent
Deforestation
of
Rare
Frog
Habitat………………………………………..11
Figure
6:
Deforestation
in
Alto
Cainarache
Valley………………………………………….13
Figure
7:
IFC
&
ASPRAVEP
Meeting…………………………………………………….…..29
LIST OF ACRONYMS
ASPRAVEP
CONAM
EBA
GEF
IFC
Association of Producers of Poison Dart Frogs in Peru
Consejo Nacional del Ambiente
Endemic Bird Areas
Global Environment Facility
International Finance Corporation
INRENA
National Institute for Natural Resources
LCC
M&E
NGO
NTFP
RAP
INIBICO
Andes
ZIRA
Local Collection Center
Monitoring and Evaluation
Non Government Organization
Non-Timber Forest Product
Rapid Assessment Process
Institute for Research into the Biology of the Eastern
Intensive Zoocriadero with Artificial Ranching
Project Summary
PROJECT IDENTIFIERS
1. Project name: Poison Dart Frog
Ranching to Protect Rainforest and
Alleviate Poverty
3. Country or countries in which the
project is being implemented: Peru
2. GEF Implementing Agency: IFC
(World Bank)
4. Country eligibility: Peru ratified the
Convention on Biological Diversity on
June 7, 1993
6. Operational program/Short-term
measure: OP No. 3: Forest Ecosystems
5. GEF focal area(s): Biodiversity
7. Project linkage to national priorities, action plans, and programs:
The project will help to achieve Peru’s goals for biodiversity, which are
articulated in the “Law on the Conservation and Sustainable Use of Biodiversity.”
Specifically, the project will help to achieve the objectives of Articles 3 and 5,
which state Peru’s desire to: (i) promote the economic development of Peru by
encouraging greater involvement of the private sector in the sustainable use of
biodiversity; (ii) foster education, information exchange, scientific research, and
the development of human resources concerning biodiversity and the sustainable
use of its components; and (iii) generate funding mechanisms in order to
adequately manage biodiversity. The project is consistent with Peru’s National
Strategy for Biological Diversity, which specifies the development of sustainable
uses of biodiversity and scientific research as national priorities. The project is
also consistent with Peru’s Strategic Biodiversity Guidelines for the Peruvian
Amazon Basin which encourage research to monitor biodiversity in the Amazon.
In addition, the project is consistent with Peru’s strategies for managing its forests
(e.g., Plan de Acción Forestal y de Fauna 1990- 2000) and high priority
biodiversity areas (FANPE-GTZ-INRENA).
Existing Peruvian legislation permits exportation of faunal species that are listed on
CITES Appendix II if they are sustainably-produced via appropriately-managed
zoocriaderos (breeding facilities). The Instituto Nacional de Recursos Naturales (National
Institute for Natural Resources, or INRENA) is highly supportive of this project and is
expected to facilitate export permits in the near future. No GEF funds will be disbursed
to the project sponsor until the initial export permits are in place.
8. GEF national operational focal point and date of country endorsement:
This project was endorsed by the GEF Operational Focal Point for Peru, Mr.
Mariano Castro Sánchez-Moreno, Executive Secretary of the Consejo Nacional del
Ambiente (CONAM) on October 4, 2001.
PROJECT OBJECTIVES AND ACTIVITIES
9. Project Rationale and Objectives:
Indicators:
1
Goal: to protect rainforest and alleviate 1. Local population increase their
income due to frog sales
poverty in highly threatened sites in
2. Decrease in deforestation at project
Peru
sites
Objectives: to promote sustainable
cultivation of poison dart frogs for
3. The business established via the MSP
export, so local people can earn a better profitably exports poison dart frogs
living from conserving the forest than
by cutting it down
10. Project Outcomes:
Indicators:
Biodiversity Preservation
At least 15,000 ha of rainforest is
preserved from destructive practices
Land preservation strategies in place for
at least 6 communities through
partnerships with INRENA or local
NGOs
Increased awareness of value of
frogs/forest among at least 10,000
schoolchildren and 850 adults
At least 20 INRENA officials will be
fully aware of sustainable frog
production methods and able to monitor
sustainability of frog business’s practices
Decrease in slash-and-burn and other
destructive agricultural practices among
at least 250 campesino families
Poverty Alleviation
At least 250 campesino families bring
their income to minimum wage via the
frog business
At least 100 campesinos earn minimum
wage from local and international
tourist visits to collection centers &
project sites
Conservation of Poison Dart Frogs
Populations of at least 60 Peruvian
poison dart frog species will be stable or
increasing
Illegal smuggling of Peruvian poison
dart frogs will be virtually eliminated
# of hectares conserved
# of communities with land preservation
strategies
# of schoolchildren instructed and # of
adults trained
# of INRENA staff trained
# of campesinos who abandon slash-andburn practices
# of campesinos reaching minimum wage via
frog business
# of campesinos who can earn minimum
wage through local or foreign tourist
visits
Population size of selected species and
variants
# of smugglers identified
2
Additional Project Benefits
Commercialization of additional NTFPs
# of feasibility studies carried out that
lead to sustainable production of
additional NTFPs
Sustainable frog production will be initiated # of new countries using ZIRA method
in at least 2 other countries
for frog businesses or in-situ
conservation purposes
Expertise about Peruvian amphibians
# of academics participating in joint
and their habitat will be increased
seminars or research
among at least 30 Peruvian academics
11. Project Activities
Indicators:
1. Inventories, manuals and other
1. Inventory of frogs and related
documents issued.
biodiversity resources (status, threats,
etc.) ($ 62,715)
2. Organizing, technical assistance and 2. Local producers organized in
committees and trained.
capacity building for local producers
3. Frog production lots established &
($97,406)
operational
3. Establishment frog production lots
4. Collection centers operating and
($291,601)
exporting
4. Collection centers’ infrastructure,
5. Technical staff at INRENA trained to
equipment and operation ($681,310)
monitor & supervise sustainable poison
5. Training and capacity building in
dart frog production
national institutional counterparts
6. Annual sales of sustainably bred
($24,190)
poison dart frogs & participation in frog
6. Market development and
trade associations/events
international media promotion
7. Poison dart frog community-based
($137,405)
production model is replicated in other
7. Model replication in other countries
countries and with other NTFPs
and with other NTFPs ($128,642)
8. # of tourists paying to visit poison
8. Ecotourism and tourism
dart frog attractions/tours
development ($20,000)
9. # of educational talks/seminars
9. Educational outreach ($31,620)
given
10. Project management and
10. Timeliness & quality of quarterly
administration ($177,842)
reports to IFC; financial audits
11. Monitoring and evaluation of
11. Timeliness & quality of M&E reports
social, environmental and economic
indicators ($80,000)
12. Estimated Budget (in US$):
3
Project Preparation:
GEF:
Co-financing:
(cash)
TOTAL:
$ 25,000
$ 39,000
PDF-A
World Bank “Innovation in the Marketplace”
$ 64,000
Project Implementation:
GEF:
Co-financing:
(cash)
TOTAL:
$ 788,540
$ 56,000
World Bank “Innovation in the Marketplace”
$ 272,732
Frog Export Business (cash)
$ 26,131
INIBICO (in kind)
$ 351,375 Curmi (87% cash; 13% in kind)
$ 186,264
Frog Producer Associations (in-kind)
$ 55,880
INRENA (Peruvian Government) (in kind)
$ 45,000
Distributors (cash)
$ 1,781,922
GRAND TOTAL:
$ 1,845,922
INFORMATION ON INSTITUTION SUBMITTING PROJECT BRIEF
13. Information on project proposer: This proposal has been developed by a joint
venture consisting of INIBICO and Curmi:
INIBICO is a nongovernmental organization specializing in the investigation,
protection and management of poison dart frogs, other amphibians and reptiles,
and fish in northeastern Peru. Located in the high jungle city of Tarapoto in the
Department of San Martin, INIBICO has easy access to a variety of ecological
zones from high cloud forest to the lowlands of the Amazon basin. INIBICO
includes fishery biologists, herpetologists, botanists, ecologists, and agroindustrial engineers. INIBICO’s manager, Dipl. Biol. Rainer Schulte, is the
world’s foremost expert in the biology and management of Peruvian and other
poison dart frogs.
The frog export venture will receive accounting, financial management and marketing
support from Curmi, a Peruvian NGO with a track record as a successful incubator of
local “green” businesses. In the areas where the frog project will take place, Curmi has
promoted agricultural projects to substitute slash-and-burn agriculture with permanent
crops such as cocoa and hearts of palm. Curmi successfully managed the creation of
local processing plants whose products are sold in national and international markets.
Curmi has also executed educational projects, with an agricultural institute in Sisa as the
main example.
14. Date of initial submission of project concept: October 9, 2001
INFORMATION TO BE COMPLETED BY IMPLEMENTING AGENCY:
15. Project identification number: 506393
4
16. Implementing Agency contact person: Sam Keller, IFC Projects Officer,
[email protected]
17. Project linkage to Implementing Agency program(s): IFC has provided support to
various types of “biodiversity businesses”, which are commercial enterprises that help to
conserve biodiversity. Either directly or through intermediaries, IFC has helped to
finance ecotourism companies, organic agriculture companies, sustainable cocoa
growers, a sustainable hearts-of-palm producer, a sustainable babassu producer, and a
shade-grown coffee producer. The poison dart frog project adds some important new
elements: it brings together tropical biologists (who know how to artificially enhance the
forest’s productivity), business managers (who know how to run companies), and
campesinos (who know how to sustainable harvest and conserve biodiversity resources if
given the right opportunities) – and thereby offers hope of a new type of business that is
able to generate profits from tropical forest without damaging it. In fact, the production
technology is so effective and innovative that it can actually help to restore native frog
populations in areas where they have been depleted. Thus, this project will make a
valuable contribution to IFC’s portfolio of biodiversity-related investments – and to
global efforts to find viable ways to monetize the economic value inherent in biodiversity
in a manner that encourages conservation of biodiversity resources.
5
Project Description
Project Rationale & Objectives
Peru is one of the eight “mega-biodiverse” countries which together possess more than
70% of the world’s biodiversity. The country provides habitat for over 360 species of
mammals, 1,700 species of birds, 20,000 species of flowering plants, 290 species of
reptiles, and 250 species of amphibians. Many more species have yet to be discovered
by the scientific community. Nonetheless, forests are being rapidly cleared throughout
the country for logging, agriculture, and infrastructure development. Although many
conservation projects are underway in Peru, they often lack adequate long-term
funding. At the same time, many conservation practitioners find it difficult to generate
revenues from the sustainable use of biodiversity. These difficulties arise in part
because sustainable production methods are not known, markets are often hard to reach,
start-up capital is lacking, good management capacity is hard to find in biodiversityrelated sectors, and government institutions inadvertently create regulatory barriers to
the sustainable use of biodiversity.
Despite these challenges, conservation practitioners in Peru (and around the
world) are devoting considerable attention to finding viable ways to generate
income from forests without destroying them. Recently, innovative research in
Peru has shown that there exists a possibility to do so by sustainably breeding
poison dart frogs (Epipedobates and Dendrobates) for export.1 These beautiful
frogs fetch $40-120 in steadily growing hobbyist markets in the United States,
Europe and Japan.
This project will support the establishment of a business that will export frogs to
hobbyists in North America, Europe, and Japan. This business – with expected
annual revenues of about $300,000 in Year 3 – will provide supplemental
livelihoods to more than 250 campesinos. It will also provide them with an
incentive for preserving over 15,000 hectares of tropical forest. And the
sustainable breeding methods will sustain the populations of over 60 species of
frogs.
In addition, this project will implement a strategic combination of complementary
activities aimed at maximizing the long-term conservation-related benefits associated
with the export business. First, it will provide agricultural assistance to participating
campesinos (farmers) so they are able to move away from slash-and-burn agricultural
methods. Second, it will provide ecological education to foster greater awareness
among the participating campesinos and other stakeholders regarding the project’s
conservation-related objectives. Third, it will establish a strategic partnership with a
1 Epipedobates and dendrobates are listed on Appendix II of the Convention on International Trade in
Endangered Species (CITES). This means that international trade in these species is permissible under
CITES if it is sustainably managed. CITES officials are strongly supportive of this project because it will
alleviate pressure on poison dart frog populations.
6
credible local ecotourism operator in order to create an additional revenue stream from
tours of the project’s facilities and implementation sites. Finally, this project will help to
strengthen the management of several protected areas because the export business will
use some of its revenues to hire full-time conservation specialists, including forest
rangers.
Sustainable Frog Production Methods
The project’s innovative frog2 production methods are notable for several
reasons: they only function in situ¸ thereby encouraging the protection of local
ecosystems; they create a surplus population that can be harvested while leaving
the original population intact; and they are lowcost, low-tech, and easy to learn.
Rainer Schulte, the chief biologist for this MSP,
invented these methods after years of meticulous
study of the frogs’ natural breeding cycle. The
female glues her eggs onto leaves located above the
ground in trees. When the tadpoles hatch, the male
puts them on his back and carries them to water,
typically to a catchment in the crook of a leaf. Then,
depending on the species, the tadpole feeds on
Figure 1: Male frog with tadpoles
mosquito larvae or unfertilized eggs laid for them
as food by their mother. The limiting factor of the frogs’ reproduction is the
number of suitable breeding sites. This provides the opportunity for expanding
production through a simple intervention in the ecosystem which enables
harvesting a ‘surplus’ population without harming the balance of the ecosystem.
The production enhancement method, which is the basis of the business model
underpinning the project, is dubbed the ZIRA method. It consists of placing
artificial breeding sites in trees in the frogs’ natural habitat. These artificial sites,
which are simply plastic soft drink bottles cut in half and filled with water,
greatly enhance breeding success: the frogs place
their eggs in the artificial breeding sites. The
‘surplus’ of tadpoles thus created can be
harvested from the bottles, put in grow-out cages
on the forest floor and then exported as juvenile
frogs.3
2
In this proposal, “frog” will refer to Epipedobates and Dendrobates,unless otherwise specified.
The project will only allow for the export of juveniles and will promote legislation to this effect to combat
the illegal export of wild caught poison dart frogs, as wild caught poison dart frogs are invariably adults
that are caught when the males are calling. Juveniles, which are silent, are normally almost impossible to
find.
3
7
The impact of frog cultivation on the natural environment is negligible. The containers
hardly cause any visual pollution because they quickly become overgrown with algae
and moss. The management trails are also hardly visible because they are so narrow.
Importantly, data from the first two years of a pilot frog breeding project in the Alto
Cainarache Valley (upon which the proposed project is based) has shown that removing
the “surplus” production of tadpoles from the forest does not affect the natural
population: neither the original reproductors nor the natural offspring are touched or
bothered during the production process. The proposed project will generate more
scientific information on population dynamics and will fine tune the
Figure 2: Frog Breeding Vessel
ZIRA method if necessary.
Not only do the ZIRA production methods not harm natural populations, they
can actually help to restore native populations in areas where they have been
depleted. For example, the pilot project was able to restore original population
densities of an endangered variant of D. fantasticus in the managed forest lots of
the Alto Cainarache Valley. This was done simply by allowing the surplus
population generated via the ZIRA method to return to the forest instead of
being harvested.
Furthermore, frog cultivation techniques can help natural populations withstand
climatic threats. As the pilot project has witnessed over the past two years, the artificial
breeding structures used in the ZIRA method retain water better than natural breeding
sites and therefore provide an excellent means of survival in times of drought. This
counters dry conditions caused by El Niño and human-induced climate change.
International Market for Poison Dart Frogs
It is difficult to obtain precise figures on the size of the market for poison dart
frogs. A survey conducted five years ago estimated that 3% of households in the
USA keep a reptile or amphibian. In Europe, an estimated 15,000 people keep
poison dart frogs. The largest European market by far is in Germany, with about
8 - 10,000 frog keepers. The Dutch market is about one-third of this size, and
poison dart frogs are also kept in significant numbers in Scandinavia (except
Norway), the UK, Austria, Italy, and Spain. The number of frog keepers has
been steadily growing over the past decade, in particular from people entering
the hobby via experience with fish- or reptile-keeping.
Hobbyists often point out that poison dart frogs are not pets, like a dog or cat that
recognizes its owner and expresses affection. Rather, they are display animals, to
be admired for their exotic beauty. Indeed, these frogs can be quite captivating:
their bright colors (blues, reds, yellows, oranges), small size – some smaller than
a thumbnail! – and active daytime behavior rarely fail to charm.
Lifelong frog hobbyists offer different
explanations for what motivates people to keep
poison dart frogs: it can be the human drive to
8
seek novelty, the establishment of a connection with nature, the frogs’
hypoallergenic nature (i.e., non-allergy producing), or simply the fact that these
animals can be kept in a small space.
Frog keepers come from all ages and all walks of life – though they are predominantly
male. They tend to be passionate about their hobby, and spend time on the internet or in
frog clubs to research and exchange information on care and feeding of the animals.
Most hobbyists attempt to breed their frogs; this
Figure 8: Hobbyist with terrarium
fascinating experience can also turn into a steady
source of pocket money because captive-bred frogs can be sold at local frog trading
shows. (This potential source of supply/competition has been carefully studied and will
be addressed via this project’s marketing strategy. See Table 4 on Project Risks and
Mitigation Strategies.)
Typical retail prices for Peruvian species are in the range of $60 to $150 in the US,
and $40 - $120 in Europe, with rarer species commanding higher prices.4 Most
frogs are sold through small-scale dealers, rather than pet shops.5
Most of the species that the business will export are not available in the North
American or European markets. Currently, no Peruvian species are legal for
export. Smuggled animals appear in Europe and the US but it often takes years
before they are successfully bred and traded.
The proposed business will offer a highly attractive product to frog hobbyists: a
legal source of species not currently available, and new genetic material for
species that are already on the market. In addition, purchasers of our frogs will
have the satisfaction of knowing that their purchase is helping to sustain the
frogs’ natural habitat and to provide the stewards of that habitat with a fair
livelihood.
Frogs’ Welfare During Shipping and in Captivity
The frogs will be shipped from Peru using techniques that avoid wounds and
stress. After having received a veterinary check for fungi and diseases via the
project’s quarantine system, animals will travel in sanitary containers that
provide suitable temperature, humidity, and ventilation. By comparison,
smuggled frogs have high mortality rates from being packed in precarious
conditions in order to be hidden from customs officials.
4
Therefore, as species become more common in the market, their price drops. The project’s marketing
strategy will take this into account as it decides which species to export in a given year.
5 Even though pharmaceutical companies use the frogs in their research for medicinal compounds, they do
not constitute a significant market for our frogs. This is because the companies can obtain enough samples
for years of research from just one animal.
9
While the project cannot guarantee the health of the animals once they are sold to
hobbyists, it is reasonable to assume they will be well looked after. Hobbyists
highly value their frogs, and generally put a lot of effort into caring for them.
The life in captivity of a Dendrobatid frog is typically about 5- 15 years. (Frogs
can grow to be 10-15 years old in the wild.) Web sites, magazines, and frog clubs
are dedicated to sharing information about the most effective ways to house and
feed the frogs. The project will link the best of those sites to the project’s own
site, and will also produce educational materials on how to care for each species.
10
Globally-Significant Biodiversity Conservation
This project will aim to sustainably produce poison dart frogs in over 250
production lots covering more than 3,000 ha in Peru. Nearly 80% of the lots are
situated in buffer zones of national parks and reserves; one lot is located inside a
protected area; the rest are found in unprotected forests located outside of buffer
zones. All will help to conserve globally significant biodiversity, as explained
below.
Highly Diverse Frog Habitat
The most common habitat for poison dart frogs is tropical humid forest, since the
frogs typically require more than 2500 mm of rainfall each year. Within the
broad category of tropical humid forest, poison dart frogs prefer the so-called
“high forest” or “upland forest.” Half of the known Peruvian species live in
premontane and montane high forests. Eight percent live only in cloud forest
found at high altitude summit conditions. Because poison dart frogs live mainly
in tropical humid forest, and particularly “high forest,” by protecting the frogs’
habitat, this project will help to conserve sections of biologically rich ecosystems.
Conservation Value of
Project Sites
This
map6
shows
the
geographic scope of the
proposed project’s three Frog
Collection Centers, which are
located
near
the
frog
producers and the production
lots. The project would seek
to establish production lots in
nearly all Amazonian and
East Andean ranges where
endemic poison dart frogs
live.
The project would
create a network of conserved
habitats (in situ conservation)
for a minimum of 60
currently known Peruvian
poison dart frog species and
distinct variants.
Figure 4: Geographic Scope of Frog Production Areas
6
TPP= Tarapoto; IQT= Iquitos; PUC=Pucallpa; LIM= Lima. Because of the threat from frog smugglers, the map
does not provide the specific location of each production lot, but shows instead the general area in which the lots
will be located.
11
Most of the frog production lots are located in “hot spots” for different types of
plants and animals, as listed in Diversidad Biológica del Perú.7 Specifically, they
are located in Endemic Bird Areas (EBA) and other “hot spots” for mammals,
butterflies, palms, flowering plants, and freshwater aquarium fish.
In addition, Diversidad Biológica del Perú identifies ”white spots” where biological
data for certain types of plants and animals is severely lacking. About 60% of the
frog production lots are found within “white spots” for different types of plants
(such as palms and ferns) and/or animals (including various types of birds,
butterflies, reptiles, and fish).8 As a result, it is anticipated that new endemic
frog species and other animals/plants will be detected over the course of this
project.
Furthermore, Diversidad Biológica del Perú establishes the category of Priority 1
Rainforest Conservation Zones by examining biological studies of many different
organizations (e.g., BirdLife International, Conservation International, World
Wildlife Fund-USA, Profauna- Peru). Although each organization may have its
own focus (e.g., birds, mammals, bats, etc), when the data is compiled, it is
possible to establish fairly accurate maps of the most biologically diverse areas
(with the exception of “white spots”, as mentioned above). The Priority 1
Rainforest Conservation Areas are basically those areas that constitute “hot
spots” for many different types of plants and animals. Most of the frog
production lots are located in these Priority 1 Rainforest Conservation Areas (see
table below). By providing conservation-compatible livelihoods in these areas,
this project is expected to not only conserve the land occupied by the frog
production lots, but also help to alleviate pressure on the surrounding Priority 1
Rainforest Conservation Areas. As explained in the Project Activities section, the
frog export company will utilize some of its revenue to pay for full time
conservation specialists to work in conjunction with INRENA.
These
conservation specialists, including rangers, should be able to help protect
approximately 12,000 hectares of Priority 1 Rainforest Conservation Areas.
Issued by INRENA, Diversidad Biológica del Perú is an authoritative guide to Peruvian sites of high
conservation priority as well as high deforestation risk. The areas are identified and selected based on
Rapid Assessment Project (RAP) surveys and faunal listings.
8 An area may be both a “hot spot” and a “white spot.” An area may be designated as a “hot spot” for a
particular category of flora or fauna if there is sufficient data to indicate that the area possesses significant
biological diversity for that particular category. At the same time, an area may be designated as a “white
spot” for some other type of flora or fauna if data is severely lacking for it. For example, an area could be a
“hot spot” for birds but a “white spot” for reptiles.
7
12
Southern Peru**
Pucallpa
Iquitos
Tarapoto
Table 1: Priority 1 Conservation Zones linked to Frog Production Areas
ƒ Cordillera Azul National Park- buffer zone (Universal Hot Spot range)
ƒ Cordillera Oriental Cerro Escalera Reg. Park- buffer zone (Dendrobatid and
General Hot Spot)
ƒ Cordillera del Condor- South Spur (New Ancient Refuge)
ƒ Pacific Rainforest Remnants – Piura/Tumbes (West Andean Hot Spot)
ƒ Napo Refuge, north bank, to Putumayo river (General Hot Spot & White Spot
Area)
ƒ Reserva Comunal Tamshiyacu-Tahuayo- buffer zone (Iquitos Arch Hot SpotEAST SIDE)
ƒ Iquitos White Sands Ecosystem- buffer zone (Iquitos Arch Hot Spot)
ƒ Pastaza Fan Ecosystem (Volcanic ash deposit fan and General Hot Spot)
ƒ Serranía de Síra National Park- buffer zone (Ancient High Endemism Refuge and
General Hot Spot)
ƒ Pachitea Refuge (General Hot Spot; Dendrobatid Hot Spot)
ƒ Alto Purús Reserved Zone (Tertiary Age Refuge- North Block, General Hot Spot
and North- South - Fauna Division Zone)
ƒ Parque Nacional Yanachaga– Chemillén – buffer zone (High Endemism Range)
ƒ Sierra Divisor Arch System (Newest General Hot Spot and important ancient
endemic species refuge)
ƒ Cordillera Azul- central segment (High Endemism Area; Hot Spot for
Amphibians)
ƒ Nudo de Pasco- High Altitude East Andean refuge (Dendrobatid hot spot- High
Endemism Range for Amphibians)
ƒ Madre de Dios/Tambopata- buffer zone (Tertiary Refuge- South Block:
Fitzcarraldo Arch- South Range)
ƒ Manú National Park- buffer zone (Fitzcarraldo Arch- North Block- High
Endemism Range-East Andes)
**The Southern Peru sites will be developed during or after Year 3 if there has been sufficient market demand. They are
not shown on the preceding map.
Finally, it should be noted that several frog production lots are located in
“Extremely Urgent Protection” areas, as
identified in Diversidad Biológica del Perú.
These are sections of Priority 1 Rainforest
Conservation Zones that are exposed to a
high risk of deforestation. In fact, some
potential frog production lots were
destroyed during the PDF-A process, one of
which is shown at right. Thus, this project Figure 5: Recent Deforestation of Rare Frog Habitat
will be implemented with a sense of
urgency.
13
Ecological Significance of Poison Dart Frogs
Poison dart frogs merit special attention from conservationists not just for being
a “charismatic species,”9 but also for their value to their ecosystems, to human
health, and to scientific study.
Poison dart frogs are recognized as indicator species for the general health of
their ecosystems. The frogs also contribute to insect control in their ecosystems:
different species feed on ants, mites, and the larva of crickets, cockroaches, and
especially, mosquito larvae, which can harbor human and animal diseases.
Poison dart frogs secrete molecules of significant medicinal interest. Secretions
from Epipedobates tricolor, a species present in Peru, are the basis for Epibatidine,
a new, powerful, and non-addictive painkiller. Researchers worldwide continue
to explore possibilities for developing medicines and pesticides based on poison
dart frogs’ secretions.
Finally, scientists are studying poison dart frogs for insights they provide into
biogeography, or the evolution and dispersal of species. The frogs’ ancient roots
– it is possible to follow their speciation process back to 25- 30 Million years ago –
make them ideal species for this field of study.
Land Ownership Status
The frog production lots will be located on land that is under different types of
ownership. Some of the lots will be located on lands owned by native
communities. The native communities possess legal title to these lands and
manage them communally. The rest of the frog production lots will be located
on lands occupied by colonos (families who have more recently migrated to
these areas). For these frog production lots, there are three different land
ownership situations: (i) some of the colonos possess a legal title; (ii) some do
not have a title but could obtain one because they settled in land that is not
legally protected; and (iii) some colonos do not have a title and cannot obtain one
because they settled in land that is legally protected. Although people in this last
category cannot obtain a legal title to their land, they can obtain permission from
INRENA or the Ministry of Agriculture to engage in productive activities on the
land if the activities are deemed to be sustainable. Overall, it does not appear
that issues related to land ownership will affect the project’s ability to achieve
long-term conservation of biologically rich tropical forest.
Baseline Situation
9
This is a term used by zoologists to describe animals, such as tigers or elephants, that strongly draw
people’s attention.
14
In the absence of GEF funding, the baseline scenario is a continuation of “business as
usual” that would lead to a higher level of deforestation, low income among local
campesinos, and a decline of frog populations. There would be no export of sustainablybred poison dart frogs; the existing regulatory and institutional barriers to the
sustainable commercial use of biodiversity would persist; there would be no frog-related
ecotourism; and the campesinos would earn no revenues beyond what they are able to
earn through subsistence agriculture. The campesinos would continue to cut down the
forest as part of their struggle to make a living. Much of the frogs’ habitat would be lost;
in fact, some species may go extinct. These baseline trends are described further below.
Continued Deforestation
Continued use of destructive agricultural practices.
In the baseline scenario, there would be continued deforestation in the areas
where the project would have been implemented. The district of the Alto
Cainarache Valley (where approximately 50 frog production lots would be
located) illustrates the trend. Thirty years ago, this district contained 4.5 million
hectares of tropical forest. It now contains only 1.8 million hectares. This has
occurred in part because in-migration has been increasing the population in the
Alto Cainarache Valley. Nearly all of the immigrant families make their living
through shifting cultivation, coffee production, and cattle ranching. Although
cutting down the forest in the Alto Cainarache Valley has been prohibited since
1992 (when the area was declared a buffer zone), this law has not been enforced.
The local population continues to cut down more and more forest. One of these
areas is shown below. Unfortunately, this is not an isolated problem: all of the
project sites face a similar situation to the Alto Cainarache Valley.
Although deforestation is a serious
problem for both the lowland and
highland forests where the project would
be located, it is exceptionally severe in
the highland areas. The high forest areas
are closer to the poor and highly
populated Andean regions, and the soils
there are thicker and more fertile than in
the lowlands, where agriculture is almost
impossible. Therefore, the highlands
attract more immigrants. Nearly all of
the immigrants use agricultural methods
Figure 6: Deforestation in Alto Cainarache Valley
which are unsuited to their new environment. As a result, there is considerable human
pressure on the high forest areas, resulting in rapid deforestation. This pressure would
remain unmitigated in the baseline scenario.
In addition, the native population has also been growing at a high rate in the
Alto Cainarache Valley and other areas where the project would be
15
implemented. Because natural resources have been overexploited, fishing and
hunting is no longer a feasible way of life for many of the native people, so they
also practice slash-and-burn agriculture. This trend would also continue in the
baseline scenario.
No Ecological Education.
In the baseline scenario, there would be no funding to provide ecological education for
campesinos, students, or other stakeholders. As a result, hundreds of individuals would
not learn about the potential to generate income from standing forests; rather, they
would continue to believe that the only way to make a living from forests is to cut them
down.
Limited Opportunities for Local Income Generation
No Frog Business.
In the baseline scenario, the frog export business would not be established. Banks and
investors would not be willing to finance it because they are unfamiliar with this type of
activity and do not know how to appraise it. In addition, the export business would not
be created because the financial expertise of IFC and Curmi would not be provided.
No Frog-Related Ecotourism.
Without GEF funding, there would be virtually no frog-related ecotourism in Peru.
Although there are clear indications that frog hobbyists and scientists in North America
and Europe are interested in visiting Peru in part to see poison dart frogs in their natural
habitat and to learn firsthand about the sustainable use of biodiversity, these
opportunities would remain undeveloped in the baseline scenario. Rural communities
would not be able to earn income from the tours that could be created for such visitors.
No Commercialization of other NTFPs.
In the baseline scenario, it would not be possible to bring other local NTFPs into
sustainable production. This is because there would be no financial resources or
organizational capacity to investigate potential new rainforest products, to
develop sustainable production methods, to conduct market studies, or to
develop business plans. As a result, an unknown number of options for
sustainably utilizing biodiversity would remain untapped.
Decline in Frog Population
Continued Frog Smuggling.
A major baseline threat to poison dart frogs is the increased pressure of
contraband smuggling, which can wipe out entire local frog population groups.
Under current Peruvian regulations, wild poison dart frogs cannot be exported.10
Nevertheless, hobbyists yearn to keep these rare and beautiful animals, and are
willing to pay considerable money for them. The potential to earn money, and
10
INRENA will provide export permits for the frogs that this project produces sustainably.
16
the relatively low risks involved, create a small but lucrative frog smuggling
trade. In 2001, at least eight species of illegal Peruvian dendrobatids were
detected in Europe.11 The smugglers typically pay local people $10-50 to capture
a few hundred frogs. As a result, the local population of a given species is
sometimes severely reduced. A few years ago, in the Alto Cainarache Valley,
smuggling almost wiped out the red-headed D. Fantasticus. (Fortunately, the
pilot project for this MSP rescued the species by allowing the breeding method to
run free.)
Persistent Barriers to Legal Exportation of Sustainably-Produced Frogs.
In the baseline scenario, INRENA would not authorize the legal exportation of poison
dart frogs produced through the ZIRA method. The lobbying efforts of Curmi are
necessary to convince INRENA to authorize exportation, but Curmi could not be
involved without GEF support (since Curmi must cover its costs). INRENA would only
authorize frog exports if it could first receive capacity building to allow it to properly
monitor the trade; this would not be possible in the baseline scenario either, for lack of
funds.
Frogs Threatened by Increased Climate Variability.
Another significant baseline threat to poison dart frogs is increased climatic
variability. Over the past two years, extreme dry seasons caused natural
breeding sites in the pilot project area to dry up . Yet the artificial breeding sites
that were installed as part of the pilot project remained full of water throughout
this period, thereby helping the frogs to survive. In the baseline scenario, such
artificial breeding sites would not be maintained long-term at the pilot site,
because the campesinos would abandon the project if they are not able to earn
income from frog exports. In addition, poison dart frog species in other parts of
Peru would remain vulnerable to climatic variability because artificial breeding
sites would not be installed there either.
Missed Opportunities for Replication
Without GEF support, it would not be possible to extend the sustainable production
methods to other countries despite the potential for applying the methods in other parts
of the world. During the PDF-A project preparation process, the sponsors were
contacted by groups in Ecuador, Brazil and elsewhere who were interested in
implementing the ZIRA method (in some cases for commercial purposes, and in other
cases for species-rescue purposes). In the baseline scenario, there are no resources to
provide outreach or technical assistance to such organizations.
Expected Project Outcomes
11 D.fantasticus, D. intermedius, D. reticulatus, D. amazonicus, D. duellmani, E.caynarachi, D. lamasi and D.
imitator.
17
The project’s main outcomes are in three complementary areas: forest
preservation, poverty alleviation, and frog conservation. The project also
supports a few related beneficial outcomes. The outcomes are described below,
and then summarized, along with indicators and goals, in Table 2.
Forest Preservation
The frog production lots will provide a direct incentive for campesinos to
conserve approximately 3,000 hectares of tropical forests (see Annex 1). Both the
initial training and the ongoing technical support will seek to impart to the
campesinos an appreciation for the economic and environmental value of the
standing forests. The project will buttress this action with explicit conservation
strategies appropriate for each region in which it is operating. Discussions have
already begun with INRENA about contracting rangers to protect the forest. In
certain areas, NGOs are developing community vigilance programs for forest
protection, and the project may also partner with them. In this case, the project
would hire community conservation specialists. At any rate, the Business Plan
explicitly sets aside enough revenues to cover six rangers/conservation
specialists (2 per Collection Center). It is conservatively estimated that each
ranger/conservation specialist –working in conjunction with local communities –
can cover approximately 2,000 hectares.
Together they will support the
preservation of approximately 12,000 hectares (in addition to the 3,000 hectares
directly conserved as frog production lots). As mentioned previously, these
lands will overlap considerably with Priority 1 Rainforest Conservation Zones.
Poverty Alleviation
The frog business itself will provide conservation-compatible livelihoods for over
250 campesino families.12 Typically, the campesinos have a monthly income of
about $50. The Business Plan projects that enough money will be generated from
frog sales to be able to pay each producer enough to increase monthly income to
$115, which is the minimum wage in Peru (while this wage would be low for a
city-dweller, it is a decent income in the countryside). The project will also
provide these families with guidance on environmentally friendly agricultural
practices which can boost their net revenues. Extensionists, who will be regularly
visiting villages to train people in the use of sustainable frog production
methods, will be responsible for this basic agricultural training.
Side activities catalyzed by the project should also generate income for poor rural
families living in the project area. Plans include small-scale frog- or naturetourism, or the commercialization of other NTFPs (non-timber forest product).
12 Campesinos won’t be direct employees of the business, but will receive payment for frogs they will sell to
the business. The business itself will employ 14 skilled (biologist) or semi-skilled (maintenance worker) staff.
18
Conservation of Poison Dart Frogs
The populations of poison dart frogs are threatened by deforestation, droughts, and
smuggling. The project incorporates strategies to fight against each of these threats. Its
poverty alleviation measures are premised upon finding ways for campesinos to earn a
living from standing forest, and particularly from forest regions that are frog habitats.
The project therefore will provide a strong incentive for campesinos to conserve forests.
The project addresses the threat posed by droughts because – thanks to regular
maintenance from frog producers – the ZIRA breeding vessels contain water even in dry
seasons. The frog business will provide a means to reduce, if not eliminate, the illegal
frog trade in Peru because campesinos will no longer have an incentive to sell frogs to
smugglers. The campesinos will be able to earn more money by sustainably producing
frogs for the project’s export venture (which will also be a much more reliable, long-term
buyer than smugglers). Anyone who does sell frogs to smugglers may no longer be able
to participate in the project – a powerful disincentive. Thus, smugglers will find it
difficult to find suppliers. And there will be little possibility for anyone to steal frogs
from the production lots because the campesinos will guard these assets closely. Finally,
the project will reduce smuggling because it will promote regulations to ensure that only
juvenile frogs may be exported. Because juvenile frogs do not chirp, the only way to
obtain them in significant quantities is to breed them.13
Related Outcomes
The project will bring about related outcomes that will also support land
preservation and poverty alleviation.
• The project will provide training to INRENA on sustainable frog production
methods. This training will allow INRENA to monitor the sustainability of
the business’s practices.
• The project will share its knowledge and experience of the ZIRA methods
with groups in other countries. This will lead to replication of our methods,
either for conservation purposes, or for the establishment of other sustainable
frog export businesses.
• Finally, the project will increase local expertise about amphibians and their
habitat.
Table 2: Summary of Project Outcomes and Indicators.
Biodiversity Preservation
Primary outcome
Land is preserved from practices that destroy
biodiversity
Primary indicator
# of hectares conserved
Secondary outcomes
Land preservation strategies in place through
partnerships with INRENA or local NGOs
Secondary indicators
communities with land preservation
strategies
Goals
15,000
6
13 It should also be noted that the project’s international marketing efforts will aim to increase demand only
for sustainably-produced frogs.
19
Increased awareness of value of frogs/forest
INRENA fully aware of our methods and able
to monitor sustainability of frog business’s
practices
Decrease in slash-and-burn and other
destructive agricultural practices
# of schoolchildren instructed
10,000
# of adults trained
Number of INRENA staff trained
850
20
Number of campesinos who
abandon slash-and-burn practices
250
Primary indicator
# of campesinos reaching minimum
wage via frog business
Goal
250
Poverty Alleviation
Primary outcome
Campesino families bring their income to
minimum wage via the frog business
Secondary outcome
Secondary indicator
Income generation from local and international Number of campesinos who can
visitors to collection centers
earn minimum wage through local
or foreign tourist visits
Goal
100
Conservation of Poison Dart Frogs
Primary outcome
Primary indicator
Targeted poison dart frog populations stable or population size of selected species
increasing
Secondary outcome
Reduction in number of smugglers
Secondary indicator
Number of smugglers identified
Goal
60 species
Goal
zero by
Year 3
Additional Project Benefits
Outcomes
Indicators
Commercialization of other NTFPs
Goals
# of feasibility studies that lead to
sustainable production of additional
NTFPs
Commercial or conservation-related replication Number of new countries using
in other countries
ZIRA method for frog businesses
2
# of new countries using ZIRA
method for ins-situ frog
conservation
# of academics participating in joint
seminars or research
2
Increase in local expertise about amphibians
and their habitat
Training for INRENA officicials on sustainable
frog production methods
Number of INRENA staff trained
Project Activities
20
2
30
20
This project will meet its land preservation, poverty alleviation, and frog conservation
goals through four main activities:
(i)
(ii)
(iii)
(iv)
Business Support: establish a new frog export venture, provide ongoing business
incubation services, and build market demand in North America, Europe, and
Japan through marketing campaigns;
Education and Training: provide training for frog producers, educational outreach
for schools and universities, and capacity building for relevant government
agencies;
Complementary Strategies for Forest Preservation: preserve forests from destructive
practices by hiring conservation specialists, promoting ecotourism, and
providing agricultural assistance for campesinos who participate in the project;
Replication: promote replication domestically by applying the ZIRA methods to
other species and assisting organizations in other countries to initiate sustainable
PDF production;
The project also allocates resources to (v) Monitoring and Evaluation (M&E) of social,
environmental, and economic indicators; and to (vi) Project Management.
Business Support
Start-Up Advice and Ongoing Business Incubation
The business will have a board of directors consisting initially of representatives
from Curmi, Inibico, and IFC. This board will select a CEO to run the business.14
Curmi will provide the CEO and his/her staff with assistance, as needed, in
starting up the business (obtaining permits, hiring staff, setting up accounting
procedures, deciding on distribution strategies, etc).
Once the business is running, Curmi will review the business’s quarterly reports,
and provide feedback if it detects aspects of the business that would benefit from
some fine-tuning. The quarterly reports will give Curmi (and IFC) a way to
regularly track the business’s progress. Curmi will also be available to answer
the business’s questions on an ongoing basis.
The production and distribution structure will have four levels:
1. The frog producers (farmers or native people) will be grouped into Frog
Producers’ Associations, such as ASPRAVEP, a campesino association which
has participated in the pilot on which this project is based. They will receive
training, technical assistance and microcredits for infrastructure (see below
under Training).
2. A Local Collection Center (LCC) will receive frogs from the committees. At
the LCCs, staff will check frogs for diseases and for correct export size. The
project will build three LCCs, located in Tarapoto, Iquitos and Pucallpa. In
Curmi will seek and evaluate candidates at the start of project implementation. All indications suggest
that suitable candidates may be found within Tarapoto.
14
21
year 1, the business will start with the collection center in Tarapoto, which
will also house offices for administrative staff. The collection centers will be
designed to receive visitors and tourists (see below under education and
tourism).
3. Meanwhile, the business headquarters in Tarapoto would track frog
production data sent by the collection centers, and orders received from
abroad. The headquarters is responsible for export permits and
documentation.
4. Finally, the business will sell to selected distributors in Europe, Japan and
North America. The North American distributor has already been selected.
Candidates for European and Japanese distributors have been identified, and
are being selected.15
Given the small size of the market, the US, European or Japanese distributors tend to be
small-scale operations, typically one or two people with a “day job” working part-time
at the frog exports. These small distributors can in turn sell to pet shops. Once the
project is fully operational and market development activities have increased consumer
demand for the frogs, the business will assess the option of selling directly to large-scale
pet shops; initial research shows that while the volume of sales to pet shops may be
high, the price they would offer might not be high enough.
Frog Breeding Equipment and Operation
Producers (campesinos organized in committees) will install artificial structures
in the forest to breed and raise poison dart frogs. Additional equipment is
needed for handling and transporting the animals. Each producer will install
100- 200 breeding vessels, set up containers for tadpoles and construct a
protection cubicle for them, and prepare fly cultures. GEF funds will be used to
cover the start-up costs of equipment for the campesinos, materials for
transporting the froglets to the LCCs, and permits and licenses.
Collection Centers’ Equipment And Operation
Once the frogs grow to semi-adult or juvenile size, they will be transported to a
Local Collection Center (LCC). Each LCC will have its own vet control,
laboratory, offices and other services. The project will start with a LCC in
Tarapoto, and, assuming the business is doing well, build two additional LCCs,
one in Iquitos and one in Pucallpa, in years 2 and 3. The investment for each
LCCs will cover the cost of the building and of associated equipment and
vehicles. To avoid overloading the project in the first year, IFC will approve the
building of the second and third LCCs only after the first one is built and
operational.
No GEF funds will be used to fund distributors in developed countries; in fact, the opposite is true:
distributors will provide funding for equipment purchases and market development activities.
15
22
Market Development
The business will work closely with its distributors to put in place strategies to
expand the market for sustainably-produced Peruvian poison dart frogs.16
Market development strategies being considered include:
•
•
•
•
•
•
Advertising and placing articles in reptile and aquarium magazines (research
has shown that many frog hobbyists are former fish hobbyists, hence the
outreach to aquarium keepers)
Cooperative advertising with zoos, botanical gardens, and other institutions
Advertising through internet frog groups
The publication in English of Mr. Schulte’s classic studies of Peruvian frogs
(currently available only in German), and of frog-keeping handbooks.
Coordinated campaigns with television and large-scale print media; during
the preparation of the MSP, we have received expressions of interest from
media in several countries. Any media features will be carefully coordinated
with our distributors so the business can capitalize on the publicity.
The development of simple “frog kits” for schools, offices, or private
individuals, consisting of a terrarium, frogs, plants, and instructions on CDRom and/or Video.
Education and Training
Local: Training for Frog Producers
This activity will have four components.
• Selecting campesinos to work with, and helping them form a Producers’
Association.
• Initial technical training, and distribution of frog production equipment.
• Ongoing technical support, including site checks.
• Leadership training
The technical support will be covered by GEF funds during the lifetime of the
project. By the close of the project, when the need for technical support will have
lessened, those costs will be borne by the business.
The initial training will be provided by the lead biologist and extensionists. There
will be two extensionists per LCC.
The project will also offer leadership and empowerment training to campesinos
with a key role in their community or in the frog producers' association. The
training will help to consolidate the community/association, by giving it tools
for addressing potential internal conflicts, and for making decisions in a
democratic way.
16 It will be important to expand the market for sustainably-produced Peruvian frogs in order to maintain
high prices. These marketing activities will carefully avoid augmenting demand for other types of frogs,
especially those that are smuggled.
23
Local: Educational Outreach in Peru
The LCCs will be used as a base for educating the local population about the
frogs and their ecosystems, and about the beauty and value of the natural
resources in their areas. Exhibits and traveling shows will target campesinos,
schoolchildren and University students. The project will also cooperate with
amphibian research programs in Peruvian universities.
National: Training for INRENA and Customs Officials
The project will offer capacity building on amphibian issues to INRENA
technical staff. It will train INRENA staff in Tarapoto, Iquitos, and Pucallpa in
the sustainable production methods, so that they can better monitor the project’s
environmental practices, and more quickly provide export licenses.17
The project will also train customs officials; this training will inform them of our
methods, so as to facilitate quick expediting of our shipments. Customs officials
will also receive training in the detection of frog smugglers.
Complementary Strategies for Forest Preservation
Conservation Specialists
In each area where the project operates, the frog export business will allocate
some of its revenues to supporting conservation efforts for the surrounding
forests and protected areas. This is important because at present there is very
little conservation-related activity (enforcement, environmental education, etc.)
in the buffer zones, where most frog production lots will be located, or in nearby
protected areas. Most of the protected areas are severely under-staffed, with low
operational resources. Therefore, the frog export business plans to hire two fulltime individuals to promote conservation in conjunction with each Collection
Center. Since the project aims to have three Collection Centers operating by the
end of Year 3, the goal is to hire a total of six conservation specialists by that
time.18
INIBICO has been on close contact with INRENA during the project preparation process in order to
execute the necessary steps for INRENA to issue export permits. Specifically, INIBICO has prepared a
Management Plan for the frog production lots that will be utilized during the first stage of implementation.
INIBICO has also prepared an Annual Operational Plan for these frog production lots. In April 2003,
several INRENA officials are going to visit the frog production lots near Tarapoto to assess the Management
Plan and Annual Operational Plan. They have indicated that – as long as their inspection confirms that the
Management Plan and Annual Operational Plan are appropriate – then INRENA will be able to issue initial
export permits. These permits will allow the project to begin making pilot shipments of frogs. Detailed
arrangements have already been established for INRENA to oversee these pilot shipments in conjunction
with INIBICO and Curmi. For instance, INRENA will be notified when frogs are transported from the
production lots to the Collection Center in Tarapoto, and when frogs are shipped from Tarapoto to Lima.
INRENA officials will review a preagreed set of papers and then provide permits for the frogs to be sent
abroad. INRENA will also work in conjunction with Customs officials to facilitate these pilot shipments.
Although only a few INRENA and Customs officials will be able to carry out these functions initially, over
time the project will train a substantial number of INRENA and Customs officials.
18 Each conservation specialist is expected to cost approximately US$1,716 per year; thus, the frog venture
will ultimately pay about US$10, 296 each year for six conservation specialists.
17
24
The specific conservation strategy to be used in a given area will depend on local
needs and conditions. Although all of the conservation specialists will be paid
for by the frog business, in some cases, they will be contracted by INRENA. An
initial agreement has been formulated with INRENA in this regard. These
conservation specialists will be deputized by INRENA as rangers, with full
authority to enforce legislation. They will come from the communities where the
project is implemented, and will be assigned to local protected areas in need of
assistance. The specific protected areas that will receive the rangers will be
determined in conjunction with INRENA during project implementation.
Depending on local conditions, it may be preferable for the frog business to pay
for conservation practitioners to work in conjunction with local environmental
NGOs.
For example, in the Alto Cainarache Valley, an environmental
organization called CEDISA is working with community members to establish
Comités de Protección Ecológica (Ecological Protection Committees). Deputized
by INRENA, the members of these committees will have authority to apprehend
illegal loggers and migrators who encroach on protected forests. The Comités
can contact INRENA, who then sends the Policia Ecologica (Ecological Police) to
deal with the violators.
It is estimated that the conservation specialists/rangers will be able to cover
about 2,000 ha (20 km2) each. Thus, the overall conservation status could be
improved for 12,000 ha (120 km2) with the efforts of six conservation specialists
working closely with local communities. (This is in addition to the roughly 3,000
ha that is expected to be preserved as frog production lots.) This is a reasonable,
but somewhat conservative, estimate. It would not be unrealistic for the project
to help conserve a greater area is it is extremely successful.
Ecotourism
INIBICO currently offers small-scale ecotourism, including overnight forest
excursions. Meanwhile, tour operators are already operating in Peru, and
research conducted for the preparation of this MSP has identified several groups
of hobbyists or scientists who would be interested in “frog tours” to Peru.
Rather than building anything from scratch, the MSP would create an alliance
between INIBICO, a credible existing Peruvian tourism promoter, and foreign
groups interested in frog tourism.
The selected local tourism partner would have good lodging facilities,
transportation, and marketing capacity (ie, established relations with travel
agencies, etc). This partner would benefit from having a new attraction for his
existing clientele as well as a way to attract a new set of clients (frog-related
tourists). Funds would be allocated for staff time to create this alliance, and for
the development of brochures and other promotional material. These marketing
funds will make it for easier for to establish a viable strategic partnership because
they will give our partner confidence that we will be able to attract tourists. In all
ecotourism activities supported by GEF funds, an emphasis will be placed on
25
environmentally
campesinos.
friendly
tourist
practices
which
provide
revenues
to
Sustainable Farming
The campesinos involved in the frog business will continue to farm to feed their
families and earn money. Without training, they would continue practicing
unsustainable slash-and-burn agriculture. Therefore, the project will provide
agricultural training for the campesinos in order to encourage them to shift from
slash-and-burn practices to more sustainable agricultural methods. 19 Based on
experience, Curmi expects this shift will do more than simply reduce the
environmental impact of farming: it will also increase the farmers’ cash income,
because the techniques and crops to be promoted tend to have higher yields and
prices. The project will establish formal agreements with the campesinos in
which they agree to stop clearing land in exchange for agronomic assistance and
participation in the frog ranching activities.
The training will be provided mainly by the project’s extensionists, who will
have experience in sustainable farming methods. Curmi will also try to raise
additional funding so that it can extend its considerable organizational capacities
for sustainable farming to the farmers who participate in the project.
Replication
Replication With Other Frog Species
The ZIRA method currently works well with dendrobatid and epipedobatid
frogs, but for some other species with commercial value, such as phyllomedusa
bicolor20, research is needed to perfect a sustainable breeding method. The project
will allocate some of the chief biologist’s time to adapting the ZIRA method to
other frog species which have commercial value.
Replication With Other NTFPs
After successfully exporting sustainably produced poison dart frogs for 1-2
years, the project will investigate possibilities to sustainably produce and sell
additional non-timber forest products (NTFP). This will be an important element
of the project’s strategy to provide sustainable long-term employment for
campesinos living in or near conservation priority areas. Although the project
will implement a sophisticated marketing strategy in an effort to maintain high
demand for Peruvian poison dart frogs, there is a chance that demand may
eventually decrease; therefore, the project will aim to carry out feasibility studies
for at least two other promising NTFPs by Year 3. By Year 4, the project will aim
to bring at least one other NTFP into sustainable commercial production so that
19 This agricultural activity will be held in land that is already deforested or agricultural, never in primary
forest.
20 Phillomedusa bicolor are also known as monkey frogs: these frogs don’t jump; instead, they climb up
branches - or people’s hands - in a monkey-like fashion.
26
the participating campesinos will be more likely to have long-term income
generation from this project.
The project’s activities in this area will be developed via the following steps:
(a) Research & Development – The project will facilitate biological research on
the reproduction methods of other species of flora and fauna that appear to have
market potential. An initial consultation between scientists, local communities,
and Curmi (representing business expertise) will be held to decide upon areas for
research. The research would explore low-cost, simple and sustainable
production methods for other species of plants or animals. The following natural
resources may be investigated: orchids and bromeliads (which could potentially
be sold to frog hobbyists for use in terrariums, and more widely to reptile and
plant enthusiasts); native stingless bees (for medicinal honey, for which there is
already a local market); other amphibians and reptiles; tropical fish; and
butterflies and other insects.
(b) Market Research – If viable technological methods can be found to
sustainably produce other species of flora and/or fauna, then the project will
further investigate the prospects for launching commercial production. This will
involve research on the market demand for these species and the prospects for
transporting them to market in an economically and technically viable manner.
(c) Business Plan Development – If feasible sustainable production methods
are successfully developed for another species of flora and/or fauna that has
sufficient market potential, then the project will commission the development of
a business plan. The business plan will describe and analyze the production
methods (including grow-out, processing, and transport), management and staff
requirements, marketing plans, and cash flow projections.
Replication in Other Countries for Commercial or Conservation Purposes
The ZIRA method is not well known outside Peru. It could clearly be of value to other
communities that wish to establish sustainable frog export ventures, and to
conservationists attracted by possibilities for in-situ preservation of frogs. The project
will work with countries where promising commercial or academic partnerships can be
built around sharing the ZIRA method. IFC and the project sponsor have already
received expressions of interest from groups in Nicaragua, Costa Rica, Honduras,
Panama, and Brazil. In fact, there is so much interest in launching frog export ventures
that the project will need to carefully manage this process to avoid flooding the market.
The project will only assist groups that promise to maximize benefits for local
communities; properly implement the ZIRA method; establish an effective monitoring
system; and install a rigorous quarantine system if they are going to export.
Monitoring and Evaluation
Curmi will engage an independent third party to monitor and evaluate the project’s
social and environmental performance against the indicators established in the log
frame; Curmi and IFC will track economic performance through routine accounting and
27
financial reporting for the frog business; and INRENA will also contribute to the
monitoring of the project by gathering field data. Although the pilot project has
indicated that the ZIRA method does not affect the natural frog population or overall
ecosystem, INIBICO will establish control plots to compare harvested vs. non-harvested
sites. M&E is discussed further in the Monitoring and Evaluation section at the end of
this document, and in Annex 5, which presents a summary of the M&E Plan, including
goals, indicators, and the responsible party, schedule, and instruments for tracking these
indicators.
Project Management
The overall project will be managed by Curmi, who will provide ongoing business
incubation services to the frog export venture and be responsible for executing all of the
activities involved in this project (though in some cases Curmi will subcontract other
organizations or individuals). Curmi will initially report to IFC about project
implementation on a monthly basis, and then on a quarterly basis. Curmi will be
expected to implement project activities in accordance with a mutually agreed work
plan, with clear objectives for each upcoming period. Any significant divergences from
the work plan will be discussed in advance with IFC, and any shortfalls in
accomplishing the agreed-upon objectives will be explained in writing.
IFC will provide advanced disbursements to Curmi on a biannual basis based on
agreed-upon budgets. If expenditures for the period are not consistent with the
budget, then an explanation will be provided in writing. Curmi will request
approval from IFC for any commitment or expenditure over $10,000.
Implementation Plan
At the start of the project, Curmi will create a for-profit company (Sociedad
Anónima) called Frogs & Forests to manage the frog production, collection
centers, and frog exports. As Table 3 indicates below, the company will be
initially owned and capitalized by Curmi (25%), INIBICO (25%), ASPRAVEP
(10%), and IFC/GEF (40%). Curmi’s presence as a shareholder is important to
provide business management skills; INIBICO’s presence is needed to provide
biological/technical expertise; ASPRAVEP’s presence will further enhance their
stake in the export venture’s success; and IFC’s presence is needed to provide
additional business acumen and to oversee the company’s operations on behalf
of the GEF (as a major investor).21
Table 3: Initial Capitalization and Ownership of Frog Export Venture
Shareholders:
% Shareholding:
INIBICO
IFC/GEF
CURMI
ASPRAVEP
25%
40%
25%
10%
Total
Monetary Value:
$ 128,895
$ 206,232
$ 128,895
$ 51,558
$ 515,579
All profits will be dedicated towards forest conservation and conservation-compatible community
development; no dividends will be paid to shareholders during the project.
21
28
Equity Composition
IFC/GEF Cash Contribution
INIBICO Cash Contribution (World Bank Development MarketPlace)
Intangible Asset Contribution (Non-Cash) from INIBICO, CURMI & ASPRAVEP**
$ 206,232
$ 56,000
$ 253,347
Total
$ 515,579
**The frog production methods are an intangible asset in accordance with the Financial Accounting Standards Board (FASB)
Statement 142. CURMI, ASPREVAP and INIBICO developed this technology during the past several years. They will therefore be
allocated equity ownership in accordance with Generally Accepted Accounting Principles (GAAP).
Curmi will plan to transfer some of its shares to participating campesinos in
Years 2, 3 and 4. This gradual transfer scheme will allow Curmi and INIBICO to
reliably select the producers who become shareholders. As of Year 4, it is
expected that the frog producers will own approximately 20% of the company.
Although it is not realistic to expect the frog producers to be able to run the
export business (considering that most or all of them come from subsistence
farming backgrounds), this significant minority equity stake will give the
campesinos a long-term interest in the success of the business.
Although IFC and Curmi will eventually need to exit from the export company,
before doing so they will ensure that the venture possesses strong enough
business and technical capacities to be self-sustaining. The principal strategy for
allowing IFC to sell its shares is to find an appropriate strategic partner. If a
strategic partner can be found who possesses considerable business management
capabilities, a strong commitment to the ecological and social principles of the
company, and (hopefully) marketing advantages, then shares may be offered.
This could be in the form of a minority ownership, joint venture, or other
arrangement. However, it may be challenging to find an appropriate strategic
partner who is able and willing to purchase shares due to the nature of this
sector (e.g., there are few large-scale dealers, industry players are often reluctant
to vertically integrate).
Implementation Schedule
The table below shows the project implementation schedule. In Year 1, project
funds will be dedicated to the establishment and operation of the Tarapoto
collection center. In Year 2, a second collection center will be built in Iquitos,
local campesino communities will be trained, and a land management plan will
be devised. Finally, in Year 3, the last collection center will be built, with similar
training and outreach in its surrounding communities.
The budget has been designed in a modular way; funds for the each new
collection center will only be disbursed if the preceding center is operational.
The modular budget is on file at IFC.
Table 4: Implementation Schedule
Year 1
Year 2
Year 3
Month Month Month Month Month Month
1-6
29
7-12
13-18 19-24 25-30 31-36
Business Support
Business incubation
Field breeding stations equipment, set-up and
operation
Collection centers infrastructure, equipment and
operation
Market development and international media
promotion
Education and outreach
Training for frog producers
Educational outreach in Peru
Training for INRENA and customs officials
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Complem. Strategies for Forest Preservation
Rangers and community engagement
Support to international partnerships for INIBICO’s
current ecotourism / frog tourism offerings
Sustainable farming
Replication
Commercialization of other NTFPs
Commercial or conservation-related replication in
other countries
Replication with other species of frogs
Monitoring and evaluation
Monitoring and evaluation of soc., env. and economic
indicators
Inventory of frogs and related biodiversity resources
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Project Management and Administration
Project management and administration
Sustainability Analysis
The project has been designed to be environmentally, socially, and financially
sustainable.
Environmental Sustainability:
•
The project is based on innovative production methods that have virtually no
adverse environmental impacts; in fact, the methods can actually help to
restore native frog populations in areas where they have been depleted. The
project has been reviewed by an IFC Environmental & Social Specialist and
will comply with all applicable IFC guidelines.
Social Sustainability:
•
The project will train participating campesinos in order to help ensure their
long-term ability to properly execute the project activities and to manage the
resulting revenues.
30
•
The project will involve Curmi, INIBICO and eventually campesinos as
shareholders in the frog export venture in order to encourage and maintain
their strong buy-in.
The project sponsor has been establishing (and will continue to strengthen)
links with important national institutions (such as INRENA) and
international institutions (such as CITES) to help ensure the continuity of
operations beyond the project life.
•
Financial Sustainability:
•
The business plan projections are based on market studies in the United
States, Japan, and Europe, conducted in 2002. There has been constant
market growth in recent years, with unsatisfied demand for new frog species
and varieties, and for other new types of animals/plants. The cash flow
analysis indicates that the business is likely be profitable within a few years.22
The frog export venture will have competitive advantages over new
competitors, thanks to cheap and effective production methods, with almost
no in-breeding, and a high variety of species to be offered to the market, some
of them almost impossible to reproduce in captivity.
•
Risk Assessment
Despite of all the sustainability factors listed above, the project faces certain
social, ecological, technical, managerial, and commercial risks.
Ecological
Social
Table 5: Project Risks and Corresponding Mitigation Strategies.
Risk Description
Frog production attracts new
settlers.
Level
Med
Campesinos sell poison dart frogs
to smugglers.
Low
Frog production doesn’t stop
deforestation. Campesinos use frog
income to buy more cattle or farm
more land.
MedHigh
Frog population decreases.
Low
22
Risk Mitigation Strategies
The project will make it widely known that it can
only employ people who lived in or near the project
sites when the project started (which will be
established through baseline social surveys).
The project will be able to pay campesinos enough
to diminish (or eliminate) their incentives to sell to
smugglers. As a further disincentive, campesinos
who sell to smugglers will no longer be able to sell
to the project.
Campesinos will agree to not cut down forests in
order to participate. INRENA won’t issue permits
to campesinos involved in deforestation activities.
Beyond that, the project will aim to foster greater
ecological awareness and buy-in for conservation.
INRENA’s and INIBICO’s monitoring would be
able to detect this problem and determine
preventive measures, such as stopping the harvest
until the frog population recovers, reducing the
harvest rate, studying external factors (pollution,
diseases, etc.).
In 1998, the Peruvian government created a tax exemption to promote the development of the Amazon
region (Ley de Promoción de Inversiones en la Amazonía). It is not certain that the present government will
keep this law, but if so, the company will not have to pay income taxes.
31
Technical
Managerial
Commercial
The project is unable to produce as
many frogs as planned due to
difficulties encountered in setting
up the production, quarantine &
transport systems.
Curmi and INIBICO are not able to
work together effectively. As a
result, the frog export venture
becomes poorly managed.
Low
The project will retain Rainer Schulte full-time
through INIBICO and will utilize the consulting
services of Mr. Don Nichols (Senior Veterinary
Pathologist at the Washington Zoo) as needed.
Med
A detailed agreement will be established between
Curmi and INIBICO which spells out the roles for
each organization. There will be close
communication and oversight in order to foster &
maintain mutual understanding and support.
Other non sustainable crops (i.e.
coca) become economically more
profitable than poison dart frogs.
Low
There is not enough revenue to
sustain collection centers, a key
component of this enterprise.
Market saturation via new sources
of supply (either new exporters
from other tropical countries or
enterprises that breed the Peruvian
species in captivity) leads to a
decrease in demand, and prices fall.
LowMed
Importers and local distributors
charge high commissions and make
high profits; campesinos have a
very low income in return.
LowMed
At this moment, there are no legal crops that can
compete with poison dart frogs production.
Campesinos don’t want to get involved with illegal
crops if they have an alternative.
Expenses at the collection centers will be kept low.
Additional income will be obtained from tourists
and visitors.
Fortunately, it will be difficult for hobbyists to
breed many of the Peruvian species in captivity.
Nonetheless, the project will gradually release new
species so as to have new products in the market
each year. Quantities to be exported will be
carefully studied and managed. The project will
also seek to ensure that any new exporters from
other tropical countries coordinate production and
do not compete on price.
Prices will be transparent, and the project will work
with different international distributors.
Med
32
Stakeholder Identification
The project’s main stakeholders include INIBICO, Curmi, ASPRAVEP and other
producers’ organizations, and INRENA.
Instituto de Investigación de la Biología de las Cordilleras Orientales (Institute
for Research into the Biology of the Eastern Andes, or INIBICO) is an NGO
devoted to the study and preservation of the flora and fauna in northern Peru’s
high rainforest. INIBICO’s technical manager in the branch of herpetofauna,
Dipl. Biol. Rainer Schulte is the world’s foremost expert in the biology and
management of Peruvian and other poison dart frogs. He has been conducting
amphibian research in Peru and other countries for over 20 years. Mr. Schulte
developed the sustainable breeding methods used in this project, and has
published several books and many articles on poison dart frogs. INIBICO's
membership include three orchid specialists, an ethnobotanist (medicinal plants),
an agroindustrial engineer (processing of new plant products), an agricultural
engineer (natural pest control for rice, coffee and corn cultures), and a Swiss
butterfly specialist.
INIBICO will be responsible for the technical aspects of the project, including the
design of the collection centers, the initial training and set-up for the ZIRA
methods, biodiversity monitoring, and research into new NTFPs.
The frog export venture will receive accounting, financial management and
marketing support from Curmi, a Peruvian NGO with a track record as a
successful incubator of local “green” businesses. In the areas where the frog
project will take place, Curmi has promoted agricultural projects to replace slashand-burn agriculture with permanent crops such as cocoa and pijuayo’ (hearts of
palm). Curmi successfully managed the creation of local plants to process hearts
of palm and cocoa for sale in national and international markets. Curmi has also
executed educational projects, such as the founding of an agricultural school in
Sisa. Oriented to poor rural students aged 12-18 who come from an area that
suffers severe deforestation and soil loss, the school teaches sustainable
agriculture and basic agroindustrial processes.
Mr. Schulte helped found ASPRAVEP23, a Peruvian poison dart frog breeding
NGO involved in the campesino
training and frog breeding pilot that
led
to this proposal. ASPRAVEP
members have already been trained
by
INIBICO;
they
have
been
participating in the pilot for three
years now, at their own risk and
23
ASPRAVEP is a Spanish acronym for Association of Producers of Poison Dart Frogs in Peru.
33
Figure 7: IFC & ASPRAVEP Meeting
expense. The organization has 22 members and is located in the Caynarachi
Valley, close to Tarapoto. Figure 8 shows Sam Keller (IFC Projects Officer)
meeting with with Mr. Adelino Pérez (ASPRAVEP’s President) during the
preparation of this proposal.
ASPRAVEP members have also taken part in a participatory social assessment. Findings
from the appraisal indicate that campesinos are interested in using project revenues for
community projects, such as rural electrification. Similar social assessments and
consultations will be undertaken in other areas where sustainable frog production is
planned.
The Instituto Nacional de Recursos Naturales (INRENA, the National Natural
Resources Institute), promotes the conservation and sustainable use of natural resources,
as mandated by the Law of Forestry and Fauna. In April 2002, INRENA formally
decided to support and be involved in the project. After INRENA issues the export
permits, the project will provide training to officials of the Customs Agency.
Community Participation
The project has developed a promising approach to distribute the benefits from
frog sales within each participating community. In designing the income
distribution plan, the sponsors have tried to avoid having a few campesinos
within a given community have a high income from frog sales while many other
community members go without any income from the project. Although such an
approach would have been easier from a technical and economic point of view
(because it would allow the project to work with a smaller number of people), it
would offer fewer social and ecological benefits. Instead, based on the total
estimated income that could be generated from frog sales in each community, the
sponsor will try to involve as many campesinos as possible, such that each
campesino obtains at least a basic salary. The project’s goal is to employ at least
250 families by Year 3.24
For example, suppose that in Valley A there are two expensive frog species. The
total monthly income would be 50 frogs x US$25 = US$1,250. A single campesino
could produce those 50 frogs, but such a high income would distort community
relationships and would mean almost no alleviation of poverty or forest
protection. But if those 50 frogs were produced and sold by 10 families, that
would allow for a US$125 cash income per family. The current average monthly
cash income in the rural areas where the project will operate ranges from US$20
to US$50. But this is an average. Most of the income comes when the corn
harvest is sold, and there is almost no income for most of the year. The project’s
goal is to raise the average cash income from such low amounts to at least the
24 The frog export venture will seek to pay the campesinos as much as possible while maintaining its own
financial sustainability. It is expected that the frog export venture will be able to pay campesinos between
30-60% of total revenues; however, the specific amount or percentage of revenues to be paid to the
campesinos will evolve over time as market conditions change (i.e., retail prices, transportation costs, etc).
34
basic salary in Peru, US$115. (This salary might look low, but in rural areas,
where families are almost self-sufficient in food, own their home, and have low
expenses, this amount can go a long way in paying for clothing, medicines, or
school supplies.)
If the total income to be generated from the project increases considerably over
the long term, more campesinos could be incorporated in the frog producer
associations. A second option for dealing with increased income is to place the
surplus into a Community Development Fund. This fund would come from a
percentage of frog sales. Each association would decide upon the use of the
funds and would regulate them according to their association’s statutes.
Different communities have different needs. The funds would not be used for
political or religious purposes.
The project will utilize appropriate methods for selecting participants. In the
Alto Cainarache Valley, the participants have been identified for several years
because of the pilot project. In other areas, an important criteria for selecting
participants will be land ownership because the project will need to involve
those who own/occupy the forested sections of land where the frogs live. After
considering issues of land ownership, the project will consider utilizing a
meritocracy/competition system or a lottery system, depending on the results of
the baseline social assessments in each area.
Finally, the project will implement several measures to reduce tensions that may
arise between individuals who are selected for participation and those who are
not. First of all, tensions will be minimized by allowing each community to
participate in determining how to select participants. Second, the project will
ensure that it provides some benefits to the communities as a whole. For
instance, some business profits will go towards conservation-compatible
community development projects, to be determined in conjunction with the
communities. As another example, the project will train and hire individuals
who are not selected for participation in the frog production activities in order
for them to work as conservation specialists. Beyond that, the project will seek
to demonstrate to participating communities that frog production is merely a
first step towards a broader range of sustainable NTFP production that will
involve more community-members.
Incremental Cost Assessment
In the Baseline Scenario, INIBICO would continue implementing the pilot
project with minimal funding (approx. $20,000 over the next few years, provided
mainly via Rainer Shulte). INIBICO would not be able to begin exporting frogs
due to a lack of financing and business support. In addition, there would be a
serious risk that the pilot project would eventually collapse, because the
35
participating campesinos would most likely lose interest after it became clear
that they would not be able to earn income from frog breeding.
In contrast, the GEF Alternative would allow a viable frog export business to be
established; GEF would help capitalize the business and fund Curmi to provide
business incubation services.
The GEF Alternative would also enable
incremental activities around land protection, which would provide additional
globally significant conservation benefits. The incremental cost to the GEF to
achieve the globally-significant benefits inherent in this proposal is US$788,54025.
However, some of these funds will be utilized in a non-grant modality (i.e.,
equity).26 Although it may be difficult for IFC to sell its shares to a strategic
partner, there is a possibility for GEF to receive a financial return from this
project.
Furthermore, the GEF Alternative has catalyzed significant co-funding, and
would continue to do so. During the project preparation process, Jan Post (a
recently-retired World Bank biologist who initially spearheaded the
development of this proposal) won $95,000 for the project from the World Bank’s
“Innovation in the Marketplace” competition.27 In Peru, Curmi has received a
reasonable indication that the Caja Rural will provide a working capital loan for
the frog export business once it is established. Campesinos have agreed to
contribute in-kind labor. INRENA has agreed to allocate some staff time to
monitoring the project’s sustainability. INIBICO’s scientists have agreed to
contribute time on biodiversity monitoring and NTFP research. U.S. and
European distributors, eager to increase their profits from frog sales, have agreed
to contribute co-funding in the form of advertisements for our frogs.28 Finally, in
the GEF Alternative, there will be co-funding generated by the frog business
itself: while revenues will be used to cover critical operating expenses, the
shareholders have agreed to allocate all profits toward forest preservation and
poverty alleviation.
The budget, in the section below, shows the level of co-funding expected from
different parties. Although appropriate indications of commitment have been
obtained from the various parties, most of the co-funding will be contributed
This is above and beyond that US$25,000 in PDF-A funds.
GEF resources have been used as equity in the IFC/GEF Photovoltaic Market Transformation Initiative
(PVMTI) and the IFC/GEF Small and Medium Enterprise (SME) Program.
25
26
27 Some of the Development Marketplace funds have been used during the PDF-A process, and some will be
spent in coming months. In either case, these funds clearly qualify as co-financing.
28 U.S. distribution will be handled by Mr. Sean Stewart and Mr. Ron Gagliardo, two of the most reputable
breeders/traders in the country. They have agreed to invest over $20,000 as part of this project. In Europe,
many organizations are eager to be selected as a distributor for this project and have agreed to invest
substantially in market development if chosen. IFC and the project sponsor will select one of these
organizations during the first stage of project implementation. This co-financing is not premised on revenue
streams; rather, it is an upfront commitment on the part of the distributors to invest cash in market
development.
36
over the course of the project as it is needed (except for the Marketplace funds,
which are already available).
37
Budget
Frog
Export INIBICO CURMI
Distribu- INRENA
Producers
Business
tors
Mkt
Place
GEF
TOTAL
Business Development
Business incubation
start-up support
review of quarterly reports
ongoing support
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
44,145
4,088
8,175
31,883
44,145
4,088
8,175
31,883
20,100
0
0
0
186,264
0
0
85,237
291,601
0
252,140
0
308,175
0
0
0
120,995
681,310
0
0
0
0
0
0
0
74,620
74,620
0
0
0
0
236,731
15,409
0
0
0
0
0
308,175
0
0
0
0
0
0
0
0
0
39,000
7,375
0
39,000
244,106
323,584
30,000
0
0
0
0
45,000
0
62,405
137,405
5,900
3,900
0
2,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
91,506
7,000
14,810
59,696
10,000
97,406
10,900
14,810
61,696
10,000
Educational outreach in Peru
0
0
0
0
0
0
5,000
26,620
31,620
Training for INRENA and customs officials
0
0
0
0
0
0
10,880
13,310
24,190
Rangers and community-based conservation efforts
Campesino organizing for deforestation prevention
Rangers/cooperation with ongoing land preservation
efforts
0
0
0
20,592
0
20,592
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
14,715
14,715
0
35,307
14,715
20,592
Support to international partnerships for INIBICO’s
ecotourism / frog tourism offerings
0
0
0
0
0
0
0
20,000
20,000
Sustainable farming
0
0
0
0
0
0
0
8,829
8,829
0
5,000
0
0
6,131
0
0
0
0
0
0
0
0
0
46,886
47,630
53,017
52,630
18,000
0
0
0
0
0
0
4,905
22,905
0
0
0
0
0
0
40,000
40,000
80,000
16,000
0
20,000
0
0
0
0
26,715
62,715
0
0
0
43,200
0
0
0
134,642
177,842
95,000
5%
272,732
15%
26,131
1%
351,375
19%
186,264
10%
45,000
2%
Field breeding stations equipment, set-up and
operation
Collection centers infrastructure, equipment and
operation
Collection centers infrastructure: Building and
installations
Collection centers equipment and vehicles
Collection centers operation
Working capital
Market development and international media
promotion
Education and Outreach
Training for frog producers
Organization of campesinos in producers’ associations
Training events and materials
Ongoing technical assistance
Producers capacity building and leadership education
Complem. Strategies for Forest
Preserv.
Replication
Commercialization of other NTFPs
Commercial or conservation-related replication in
other countries
Replication with other species of frogs
Monitoring and Evaluation
Monitoring and evaluation of soc., env. and
economic indicators
Inventory of frogs and related biodiversity resources
Project Management and Administration
TOTAL
38
55,880 788,540* 1,820,922
3%
43%
100%
*This is above and beyond the US$25,000 in PDF-A funds.
Monitoring and Evaluation Plan
The project sponsors and IFC have established a sophisticated monitoring and
evaluation plan, which will be further refined during the first stage of
implementation. A basic summary is provided below (and a more detailed
overview can be found in Annex 5).
Monitoring:
A comprehensive set of indicators has been established to measure the project’s
effectiveness in implementing each set of activities and achieving each expected
outcome. These indicators can be found in the log frame at the front of this
document and in the M&E Summary in Annex 5. For straightforward indicators
(e.g., the number of people trained), Curmi will simply report progress in their
quarterly reports to IFC. Participating campesinos will also help to monitor
certain indicators, such as the occurrence of frog smuggling. For more
complicate indicators, the project will engage an external organization (such as
World Wildlife Fund, Conservation International, or some other group with
appropriate skills and commitment). Specifically, the project will utilize an
external environmental specialist (EES) and an external social specialist (ESS).
The external parties will be selected and contracted at the start of project
implementation in order to obtain rigorous baseline data. In addition, INIBICO
will establish control plots to compare harvested vs. non-harvested sites. Doing
so will ensure that the project does not adversely affect frog population
dynamics or other aspects of forest ecology.
At the start of project
implementation, INIBICO will establish a detailed plan for carrying out this
work, including specific indicators and monitoring protocols.
Evaluation:
Although monitoring will be done partly by project implementors, formal
evaluations will be done by a third party in Peru. The formal evaluations will be
done at Year 1, Year 3, and Year 5. The evaluation at Year 1 will emphasize
process and will be designed to give feedback to the implementation team; it will
also be a dry run of the impact evaluation. The evaluation at year 3 will
emphasize impacts, and will also draw lessons on the most effective processes.
Finally, the evaluation at Year 5 (two years after the end of the project) will
examine the extent to which the project achieved sustained impacts.
Although the M&E plan has been designed to answer many specific questions
about the project, in the broadest sense it will seek to address the following key
issues: (i) the extent to which frog production is underway and operating well
from a social, environmental, and economic/financial perspective; and (ii) the
extent to which the project’s land preservation strategies are working effectively
from a social and environmental perspective.
39
The project has crafted a cost-effective approach for achieving its M&E plan. It
will control costs by allowing the implementation team to gather much of the
monitoring data (as opposed to relying on an outside contractor). And it will
contract a Peruvian NGO to conduct the external evaluations in an affordable
manner. The project budget includes $40,000 in GEF funding for this external
contract. There is also in-kind co-funding from INRENA. Finally, the project has
allocated over $62,000 to monitor the biological effects of the frog ranching
activities.
Annex 1: Globally-Significant Conservation Benefits
Year
Year 1
Year 2
Collection Center
Implementation
Tarapoto Collection
Center
Iquitos Collection
Center
Production Lot Ranges
# of
Production
Lots
# of
HA
CITES Appendix II
Species Protected
& Managed
Alto Caynarachi Valley &
Tarapoto Range
Bonilla Lowland Range
50
15
150
50
300
3 D, 4 E, 2 Ph, 3 H
2 D, 2 E, 3 C, 2 Ph
3 D, 4 E, 2 C, 4 H
Saposoa Range
15
100
Pucallpa
Collection Center
Field Work &
Exploration
OPTIONAL
If market demand is
sufficient, a
Collection Center
may be built in Lima.
SP
X
X
2 D, 2 E, 2 H
X
X
X
X
Sisa Range
5
50
1 D, 2 E
X
X
Cordillera del Condor
10
180
3 D, 3 E, 3C
X
X
Contamana Range
5
150
4 D, 5 E, 2 C
2 D, 4 E, 4 H
X
X
Huallaga Range
8
150
6 D, 6 E, 2 C, 2 H
X
X
Piura- Tumbes range
3
80
2 E, 2 C, 4 H, 1 Ph
X
X
111 Lots +
Ranger Sys:
1,215 +
4,000
Priority 1 Conservation Areas
Benefiting From
Sustainable Frog Production
20
300
4 D, 2 E, 1 C
X
20
400
4 D, 2 E, 1 C
X
4 D, 4 E, 2 C
X
X
Buffer Zone of Cordillera Oriental
Regional Park
Paranapura-Shanusi Lowland Refuge
East Andean slope, north limit to National
Park Gran Pajatén.
East Andean Slope of Sisa Range.
X
Condor is part of the Marañön Refuge Hot
Spot.
Newest and most extreme Hot Spot-future
National Park status solicited. Belongs to
the ancient Divisor Arch Endemism
Center.
Buffer zone in between two parks:
Cordillera Azul and Regional Park Cord.
Oriental.
Tumbes-Ayabaca lies in a newly proposed
National Park area and BirdLife Hot Spot
Iquitos Reco Center
Tamshiyacu- Tahuayo
Range
Carretera Nauta Range
Buffer zone of Reserva Comunal
Tamshiyacu- Tahuayo.
Buffer Zone of Allpahuayo-Mishana White
Sands National Park.
New refuge, yet unprotected.
15
50
55 Lots +
Ranger Sys
755 +
4,000
Sepahua- Purús Range &
Southern species range
Cordillera Divisor Range
15
200
4 D, 5 E, 3 C, 2 Ph
X
X
X
X
15
200
4 D, 5 E, 2 C, 2 Ph
X
X
X
X
Cordillera Sira Range
20
200
4 D, 4E, 2 C, 2 Ph
X
X
X
Pichis- Palcazú range
20
200
3 D, 5 E, 2 C
X
X
X
Aguaytía range
12
200
2 D, 4 E, 2 C
X
X
Cordillera Azul Range
14
200
3 D, 3 Ph, 4 E
X
X
X
96 Lots +
Ranger
System
262 Lots in
Peru
1,200 +
4,000
OPTIONAL
Lima Reco Center
Cordillera Central range
20
200
2 E, 2 C
X
X
Cuzco Range
20
200
3 D, 3 E, 2 C,
X
X
Madre de Dios Range
10
300
2 D, 4 E, 2 C, 3 Ph
X
X
Manú Range
10
300
3 D, 4 E, 2 C, 3 Ph
X
X
X
Pucallpa Reco Center
Total
Year 4
Ecosystems
PMF MF
Tarapoto Reco Center
Momón Range
Year 3
LF
X
Buffer Zone of the Alto Purús Reserved
Zone.
Extremely rich Hot Spot,
Outstanding new species.
Future National Park status solicited.
Sira National Park Buffer Zone.
BufferZone of Yanachaga- Chemillén
National Park, good Hot Spot of endemic
species.
Lowland Forest refuge with a lot of
endemic species and new ecosystems- yet
unprotected.
Buffer Zone of Cordillera Azul National
Park
15,170
40
X
X
Buffer zone of Yanaxhaga-ChemillénPark. Pampa Hermosa refuge- yet
unprotected.
East Andean Cloud Forest range, yet
unprotected.
Lowland Forest lots along buffer zones of
Tambopata Reserved Zone.
Highlands of the buffer zone of Manú
National Park.
Subtotal (Optional)
60 Lots +
Ranger
System
1,000 +
4,000
Ecosystems: LF= Lowland forest (up to 500m) PMF= Premontane Forest (500-1200 m), MF= Montane Forest and Summit
biotopes (1200-2500 m), SP= Special Ecosystems.
Frog Codes: D= Dendrobates, E= Epipedobates, C= Colostethus, Phy= Phyllomedusines, H= Hylids (Only managed frog
species mentioned; overall protected amphibian species in each managed forest lot is approx. 90 % higher).
41
Annex 2: Summary of Business Plan for Frog Export
Venture
Year 1
Revenues
Frogs - Class A
Frogs - Class B
Frogs - Class C
Frogs - Class Sp1
Frogs - Class Sp2
Frogs - Class Sp3
Land management licences - credit recover
Total Revenues
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
25,500
18,000
18,000
3,125
5,000
3,750
11,000
84,375
51,000
36,000
36,000
6,250
10,000
7,500
11,000
157,750
102,000
72,000
72,000
12,500
20,000
15,000
112,200
79,200
79,200
13,750
22,000
16,500
123,420
87,120
87,120
15,125
24,200
18,150
135,762
95,832
95,832
16,638
26,620
19,965
149,338
105,415
105,415
18,301
29,282
21,962
164,272
115,957
115,957
20,131
32,210
24,158
180,699
127,552
127,552
22,145
35,431
26,573
198,769
140,308
140,308
24,359
38,974
29,231
293,500
322,850
355,135
390,649
429,713
472,685
519,953
571,948
35,000
24,000
4,267
3,550
10,000
7,500
4,267
1,350
10,000
7,500
4,267
1,350
66,817
23,117
23,117
36,688
73,375
146,750
161,425
177,568
195,324
214,857
236,342
259,977
285,974
36,688
73,375
146,750
161,425
177,568
195,324
214,857
236,342
259,977
285,974
11,000
1,000
11,000
1,000
12,000
12,000
25,197
2,400
1,800
1,200
480
2,914
3,000
36,991
12,485
3,600
3,600
1,800
960
3,060
3,000
28,505
21,792
7,200
7,200
3,600
1,920
3,213
3,000
47,925
7,560
7,560
3,780
2,016
3,374
3,150
27,440
7,938
7,938
3,969
2,117
3,542
3,308
28,812
8,335
8,335
4,167
2,223
3,719
3,473
30,252
8,752
8,752
4,376
2,334
3,905
3,647
31,765
9,189
9,189
4,595
2,450
4,101
3,829
33,353
9,649
9,649
4,824
2,573
4,306
4,020
35,021
10,131
10,131
5,066
2,702
4,521
4,221
36,772
Courier
Maintenance
Sub-total Administrative expenses
1,000
41,416
600
1,200
3,000
240
240
600
48,296
1,000
49,755
1,200
2,400
4,200
480
360
1,200
60,595
58,093
1,800
3,600
5,400
720
480
1,800
71,893
60,998
1,890
3,780
5,670
756
504
1,890
75,488
64,048
1,985
3,969
5,954
794
529
1,985
79,262
67,250
2,084
4,167
6,251
833
556
2,084
83,225
70,612
2,188
4,376
6,564
875
583
2,188
87,386
74,143
2,297
4,595
6,892
919
613
2,297
91,756
77,850
2,412
4,824
7,237
965
643
2,412
96,344
81,743
2,533
5,066
7,598
1,013
675
2,533
101,161
Interest on W.C. loan for frog purchases
1,834
3,669
7,338
8,071
8,878
9,766
10,743
11,817
12,999
14,299
Total Expenses
202,626
201,260
297,022
272,424
294,520
318,568
344,751
373,268
404,340
438,205
-118,251
-43,510
-3,522
50,426
60,615
72,081
84,963
99,416
115,613
133,743
Expenses
Investment costs
Properties
Equipment
Vehicles
Administration equipment
Other concepts
Sub-total Investment
Purchases
Poison dart frogs (to producers)
Other concepts
Sub-total purchases
Permits & Licences
Land management licences (credit)
Recollecting center licences
Other concepts
Sub total Permits & Licences
Production costs
Installation of production lots
Vehicle maintenance
Fuel
LRC equipment maintenance
LRC - Lima airfreight
Export paperwork
Unexpected expenses
Sub-total Production costs
Administrative expenses
Company organization & registration
Wages
Office materials
Electricity
Telephone
Water supply
Net Cashflow
Disc. Rate
NPV
IRR
Period
Disc. Rate
NPV
IRR
Period
8.0%
-$25,848.7
2.73%
6 years
42
8.0%
$77,437.7
17.76%
8 years
Disc. Rate
NPV
IRR
Period
8.0%
$197,222.0
24.92%
10 years
Annex 3: Market Study
Customer Profile
The General Public
The primary motivations for people to enter into this hobby are the human drive
to seek novelty, the hypoallergenic nature of such pets, the establishment of a
connection with nature, and the fact that these animals can be kept in a small
space. These motivations account for 90% of the hobbyists in the market. This
project increases the availability of many rare and sought after frogs, thus
inevitably expanding the market.
Many people want what is rare and not commonly available. It is not unusual for
extremely rare frogs to sell for several hundred dollars. An average poison-dart
frog sells for $40-$120. Many dart-frog enthusiasts are former reptile collectors
and marine fish keepers, hobbies that have been in the past mostly male oriented.
Thus, it is not surprising that more men buy frogs at this point than women.
However, as the hobby grows so does the involvement of female collectors. It is
estimated that the gender breakdown in the US is 70% men and 30% women.
Men and women of all ages are currently part of this hobby. Frogs have been
sold to people as young as age 9 and as old as 83. The majority of buyers are
between the ages of 18 and 50, dictated by the price per animal and the
responsibility level involved in keeping dart-frogs. This age bracket contains
individuals that can generate the income necessary to purchase dart-frogs.
Income also factors into the depth of involvement, meaning those that make
more money can buy more animals. Note that it is not unusual for parents to
invest in this hobby for their children.
New books on amphibians are published frequently. Magazines detailing the
captive care of dart-frogs (i.e. Reptiles Magazine) are at newsstands the world
over with monthly circulation in the tens of thousands. The rain forest
conservation movement has introduced the world to exotic wildlife. There are
television channels dedicated to bringing the rain forest and their inhabitants
into your living space daily. Not to mention the internet.
Institutions
Many Peruvian species of frogs are not kept or displayed at institutions, making new
arrivals of greater importance for both those institutions keeping Dendrobatids and also
those wanting to begin new exhibits featuring rare species. Of the 177 institutions, we
estimate 25% dedicate some exhibit space and efforts to keeping Dendrobatid frogs. This
places the institutional market at approximately 1,000 frogs per year.
43
Pet Store Chains
The Pet Shop market in the US has changed drastically in the past decade, with
many of the smaller, specialty shops going out of business and yielding to the
large chain stores. These stores rely heavily on sales of dry goods and only
recently have begun to offer animals other than small mammals and birds for
sale. The standard mark up on animals is 100%, (i.e. an animal that retails for $40
costs the store $20). The average retail price of a reptile or amphibian selling in
these stores is $29.99 retail. However, the large chain stores can consume large
numbers of animals. Last year alone, one chain of over 500 stores was supplied
with nearly 40,000 leopard geckos alone! The disadvantages of such mass
distributions through US pet store chains include decreased quality of care for
the animals. This is due to lack of knowledge of Dendrobatid husbandry and
difficulty in maintaining adequate food sources. In the short term, they provide
a lucrative and quick distribution channel for the product; however, in the long
term, it may discourage more potential hobbyists. This area requires special
consideration and strategizing in the future.
Current United States Market
An analysis of the current US Market revealed only 13 Peruvian species or
variants available. None of these animals are coming in directly from Peru but
are captive born animals bred in the US or Europe.
Current Prices
Because the trade of dart-frogs within the USA is not recorded or regulated it is
difficult to determine the sales of each species per year and at what price. All
hobbyists with a US Fish and Wildlife license are required to detail all their
transactions yearly and give a written report to the agency. However, nonlicensed individuals trade the majority of dart frogs. Secondly, the recordkeeping of those licensed hobbyists provides merely an estimation in most cases.
A recent informal survey of the largest dart-frog traders was a crude way to
generated reliable data on a portion of the trade (shown below). It can only be
generalized to a certain degree. What one should focus on is the numbers reflect
just that, a small portion of total trade.
Table 6: Current Market Price Survey Data**
Species
Low
High
Mean
Dendrobates auratus**
20
100
60
Dendrobates azureus
50
120
85
Dendrobates tinctorius**
25
125
75
Dendrobates imitator*
35
55
45
Dendrobates intermedius*
85
125
105
Dendrobates fantasticus*
100
150
125
Dendrobates lamasi*
100
150
125
Dendrobates ventrimaculatus*
30
70
50
Dendrobates leucomelas
18
60
39
44
Dendrobates variabilis*
60
80
70
Epipedobates tricolor
20
40
30
Epipedobates hahneli*
35
55
45
Epipedobates silverstonei*
120
200
160
Epipedobates trivittatus
35
100
67.50
Phyllobates bicolor
15
60
37.50
Phyllobates terribilis
30
200
115
Phyllobates aurotaenia
15
35
25
Phyllobates vittatus
30
50
40
*-Denotes native Peruvian species
** Includes a range of variants, sizes and ages as well as wild caught imports and captive born animals
Factors that affect prices are: Availability, Rarity, Aesthetics, Behavior and
Production Costs. New varieties will demand the highest prices and to prevent
market saturation and any resulting effects on price, the quantities of these will
be carefully monitored and controlled. Decisions on which species to offer at
very low prices (for Pet Store Chain or other venture) should be made on a case
by case basis at a later date.
Current Competition and Market Leaders
Currently there is little to no competition for Dendrobatid species from Peru
because these are simply not in cultivation at this time. Smuggled animals turn in
up Europe and the US but it often takes years before they are successfully bred
and traded. Between 1995 and 2000, there were only 1,462 frogs reported to be
exported from Peru and only 926 reported imported to the United States. 1,462
frogs represent only 2% of the total frogs traded worldwide, a comparatively
small share of the market. 1999-2001 yielded a total of 15,517 frogs imported in
the US from all countries, a significant increase. Peruvian species accounted for
only 6.3% of the total and only 4.6% were actually exported from Peru. There
were no imports directly from Peru in 2001.
Currently, about ten top breeders of Dendrobatid frogs in the United States
breed and distribute more than 200 frogs each per year. These breeders are
distributed across the United States and some could potentially be contacted as
sub-distributors. Most of these breeders have been interviewed and expressed
support for the Peru Project:
Table 7: Major U.S. Poison Dart Frog Breeders
Sean Stewart
Marcus Breece
Black Jungle
Reptile Specialties
Patrick Nabors
Aaron Hanzlink
Araknaculture
Glades
Peruvian Poison Dart Frogs Market Advantages
•Species diversity
45
Incredible Pets
Under the Canopy Farms
Bill Schwinn
•Healthy, captive raised juvenile frogs
•Genetically equal to wild caught
•Produced without affecting original habitats
Market Demand
Currently, the hobby has evolved and the demand for “thumbnail” species is higher
than ever before. Over 80% of the frogs fall into this category. In addition, the hobby is
saturated with species from other South American countries, namely Suriname. The
hobby is looking for “thumbnail” species as well as new any new species to work with.
The interest and demand for legal species with locale data that are new to the hobby is at
an all time high. Annually, it appears that the market will support the numbers in the
table below.
46
Table 8: Annual Viable Sales Figures
USA
Europe
Class A
Class B
Class C
600
1,200
600
1,200
1,200
2,400
2,400
4,800
Class A: High difficulty and extremely rare species (such as D. sirensis)
Class B: Medium difficulty species (such as D. fantasticus)
Class C: Common or easy to produce species (such as D. imitator)
Japan
300
300
600
1,200
Marketing and Selling Strategy
Controlling the market of these animals from the distribution side will be
accomplished by the slow and carefully managed introduction of new species
annually and the rotation of many species through the market cycle at a specific
time interval. There are two ways to prevent over saturation and keep interest
high:
• Limit the number of frogs per species/variant imported
• Limit the number of species/variant made available
Since 1983, approximately 150 species and variants of Dendrobatid frogs have
sustained the hobby. There are at least 70 morphs available from Peru over the
next decade. For instance, introduction of 10 new species/variants per year
would allow 7 years of production and marketing without repeating the cycle. At
this stage it is important to identify ways to maintain high demand for our
product rather than specifying a particular plan.
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Annex 4: Focal Point Endorsement
48
Annex 5: Summary of Monitoring & Evaluation Plan
Process Monitoring
Business Development
Indicators
Business incubation
Revenues in Year 3
Field breeding stations equipment, set-up # of breeding lots set up
and operation
Collection centers infrastructure,
# of collection centers operating in year 3
equipment and operation
Market development and international Increase in market sales as compared to
media promotion
market study
Education and Outreach
Training for frog producers
# of campesinos who breed frogs
Educational outreach in Peru
Education for schoolchildren
# of schoolchildren instructed
Community educational program
# of adults trained & their feedback
Cooperation with university researchers # of academics participating in joint
seminars or research
Training for local and national INRENA # of INRENA staff trained & their
officials on sust frog production methods feedback
Capacity building for customs officials # of officials trained
Complem. Strategies for Conservat.
Rangers and community engagement
# of HA protected
Campesino organizing for deforestation # of campesinos participating in
prevention
community forest vigilance efforts.
Rangers/cooperation with ongoing land # of rangers employed via frog business
preservation efforts
revenues
Support to international partnerships for # of annual foreign frog- or natureINIBICO’s current ecotourism offerings tourists visiting project facilities & sites
Sustainable farming
# of campesinos who abandon slash and
burn practices
Poverty Alleviation
Campesinos earning $ to escape poverty Salaries earned by frog breeders
Replication
Commercialization of other NTFPs
# of feasibility studies that lead to search
for NTFP funding
Commercial or conservation-related
# of new countries using ZIRA method
replication in other countries
for frog businesses or conservation
Replication with other species of frogs # of new species exported
Who
Frequency
Curmi
INRENA
quarterly
6 mos
Process Evaluation
Instrument Who
quart. reports
EES/INIBICO 6 mos
When
Impact Monitoring & Evaluation
Who
Frequency
PostProject**
EES/ESS* Yr 1&3
EES/ESS Yr 1&3
NA
EES/ESS
6 months
yes
EES/ESS Yr 1&3
EES/ESS
6 months
yes
Curmi &
distr.
annual
quart. reports
IFC
Yr 1&3
too costly
-
no
INIBICO
quarterly
EES
Yr 1&3
EES/ESS
6 months
yes
Curmi
Curmi
INIBICO
quarterly
quarterly
quarterly
quart. reports
quart. reports
quart. reports
quart. reports
quart. reports
too costly
too costly
too costly
too costly
too costly
too costly
-
no
no
no
Curmi
quarterly
quart. reports
INRENA Yr 1&3
INRENA
6 months
yes
Curmi
quarterly
quart. reports
INRENA Yr 1&3
INRENA
6 months
yes
EES/INRENA 6 mos
ESS/EES
6 mos
TBD
internal data
EES/ESS Yr 1&3
EES/ESS Yr 1&3
EES/ESS
EES/ESS
6 months
6 months
yes
yes
EES
6 mos
internal data
EES/ESS Yr 1&3
EES/ESS
6 months
yes
Curmi
6 mos
internal data
IFC
Yr 1&3
EES/ESS
6 months
yes
ESS/EES
6 mos
interviews
EES/ESS Yr 1&3
EES/ESS
Yr 1&3
yes
Curmi
6 mos
internal data
ESS
ESS
Curmi
6 mos
Biannual reports EES/ESS Yr 1&3
too costly
-
no
Curmi
6 mos
Biannual reports EES/ESS Yr 1&3
too costly
-
no
Curmi
6 mos
Biannual reports EES/ESS Yr 1&3
too costly
-
no
*EES = External Environmental Specialist *ESS = External Social Specialist
**The post-project impact evaluation will be conducted two years after the end of IFC’s involvement to gauge the sustained impacts of the project
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Yr 1&3
6 months
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