FINANCIAL CHALLENGES AND PROPOSALS FOR SUSTAINABLE PRODUCTION IN BRAZIL

The document argues that Brazil can align economic growth with environmental protection by reforming its rural credit system to support the 2012 Forest Code. It identifies inefficiencies in the current credit design, such as annual planning horizons and a dominance of public banks, and proposes a phased transition toward risk management tools, private sector participation, and subsidies strictly tied to the provision of public environmental goods.

• Brazil has significant potential to increase food production without further deforestation by utilizing inefficiently used pasturelands, which account for 24% of the country's area.
• The current rural credit system is characterized by high complexity and unpredictability, featuring over 25 overlapping programs and annual planning horizons that create volatility and susceptibility to political interference.
• Rural credit distribution is heavily concentrated in public institutions, specifically Banco do Brasil, Banco da Amazônia, and Banco do Nordeste, which limits competition and innovation.
• The 2012 Forest Code establishes Legal Forest Reserves (ranging from 20% to 80% of property area) and Permanent Areas of Preservation (APP) to protect native vegetation, but its implementation is hindered by a lack of resources for forest restoration.
• Brazil's agricultural policy relies excessively on credit instruments and lacks developed risk management tools like insurance and derivatives, unlike the systems in the United States and European Union.
• The Low-Carbon Agricultural Program (ABC) is the only Brazilian program explicitly linking subsidies to public goods (greenhouse gas reduction), but it represents only a small fraction of total funding, with a 2 billion reais budget against a total of 225 billion reais for industrial and family farming in 2018-2019.

APA

Assunção, J., & Souza, P. (2018). FINANCIAL CHALLENGES AND PROPOSALS FOR SUSTAINABLE PRODUCTION IN BRAZIL. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2019/02/Financial-Challenges-and-Proposals-EN.pdf

Chicago

Assunção, Juliano, and Priscila Souza. FINANCIAL CHALLENGES AND PROPOSALS FOR SUSTAINABLE PRODUCTION IN BRAZIL. Climate Policy Initiative, 2018. https://www.climatepolicyinitiative.org/wp-content/uploads/2019/02/Financial-Challenges-and-Proposals-EN.pdf.

Wikipedia

{{cite report |last1=Assunção |first1=Juliano |last2=Souza |first2=Priscila |title=FINANCIAL CHALLENGES AND PROPOSALS FOR SUSTAINABLE PRODUCTION IN BRAZIL |publisher=Climate Policy Initiative |date=December 2018 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2019/02/Financial-Challenges-and-Proposals-EN.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{assuno2018financial, author = {Assunção, Juliano and Souza, Priscila}, title = {{FINANCIAL CHALLENGES AND PROPOSALS FOR SUSTAINABLE PRODUCTION IN BRAZIL}}, institution = {Climate Policy Initiative}, year = {2018}, month = dec, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2019/02/Financial-Challenges-and-Proposals-EN.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }