When participating in an event on green finance, promoted by the Financial Initiative of the United Nations Environment Program (UNEP) and the Brazil Network for the Global Compact, Minister Tereza Cristina (Agriculture, Livestock and Supply) highlighted this Friday (19 /03) that Brazilian agribusiness is a good alternative for private investment in green bonds. The virtual event brought together representatives from several countries and multinationals.
One of the highlights of national agriculture is the advance in sustainability indicators. From 1977 to 2018, grain production grew by 425%, while the planted area increased by just over 40%. Another number cited by the minister shows that livestock farming achieved important gains in productivity and efficiency, over a period of 20 years, occupying only 22% of the national territory and keeping 66% of the native vegetation preserved.
“Our production is increasingly sustainable. Thanks to favorable natural and climatic conditions, we are able to harvest two crops a year in the same area, and can reach three with the use of sustainable technologies. Something impossible for agriculture in countries with a temperate climate”, he highlighted.
Furthermore, national programs are working to recover millions of hectares of idle and degraded pastures to expand livestock farming, without the need for deforestation, with the adoption, for example, of integrated crop-livestock-forest systems.
“Our producers have long understood that preservation and production are inseparable, and that sustainability is already profitable. This creates a fundamental point for us to grow more in sustainable livestock farming,” she said.
The minister once again reinforced that rural producers must comply with one of the most rigorous environmental laws in the world, the Forest Code, which determines the maintenance of legal reserves on private properties.
To respond to the global demand for food, fiber and renewable energy, Brazilian agriculture will need a large volume of resources. Annually, the sector needs US$ 100 billion just for turnover, not counting other investments in other links in the production chain, such as input production, logistics, marketing, storage and industrialization. With this scenario, green bonds are an important financing tool for the sector.
In 2019, Brazil issued just 0,5% or US$1,5 billion of all green bonds in the world, despite representing more than 2% of global GDP. With the aim of expanding this market and attracting foreign investors, the government is adopting measures to improve the business environment, reduce bureaucracy in the entry of external resources and consider tax aspects so as not to hinder the flow of international resources.
One of these actions was the enactment of the Agro Law, in 2020, which made financial operations simpler, more transparent and legally secure, in addition to improving instruments such as the CPR and agricultural titles (CRA). Another measure was the partnership signed in 2019 with the Climate Bonds Initiative (CBI), the largest certifier of green bonds in the world, to define global criteria for agriculture and livestock and prepare an investment plan for sustainable agriculture.
“We want to take advantage of the financial and domestic markets that are still very liquid. There are trillions of dollars and reais in search of good investment alternatives, better returns and lower risks. Our agribusiness certainly offers these opportunities”, highlighted the minister.
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