At the current stage of PNPB, the institutional environment is crucial for the inclusion of oil palm family farmers in this production chain. Thus, the following is emphasized: implementing contracts with oil palm family farmers (a marginal portion of the business). There is tendency for the biodiesel plants located in the north—as well as those planning to initiate this business—to also verticalize their agricultural activities.

In the case presented in this chapter, the system imposes the debt discharge with the retention of the loan payment by the bank itself. Since the company is a kind of guarantor, by applying its own resources in the arrangement, it is consid­ered a sort of partner to the venture.

Given the attributes of the social transactions presented, the bonus system (premium payment for palm oil) is deemed as important to comply with the con­tractual agreement. This incentive encourages bilateral dependence, commitment, and credibility in the continuity of the relationship. The increased frequency of these transactions produces information between the parties, contributing to the agents’ reputation.

During the interviews, it became clear that the participation of the technical staff in the transaction strengthened the family farmers’ trust in the company, espe­cially because of their extensive knowledge of the region.

Thus, the technicians are key figures in the transaction as they are the interface between the purchasing department and the assurance of the supply quality.

The reputation and also the informal ties reinforce the different forms of coor­dination, which are important complementary elements in the transaction. Thus, the agents can build a reputation that increases the assurance that they will act within the expected ethical standards, which favors the investment of the parties involved in the transaction.

The social projects developed with palm were indicated by all respondents as a success case that should be replicated. The minimum quota of SCS to the north of the country is attractive, and, according to field research information, companies have already begun to perform their own mapping of family farmers that could produce palm oil in the Northern region. The goal is to plan an agricultural pro­duction that is in line with the needs foreseen of the processing plants.