Financing Sustainable Agriculture in the Cerrado Biome

The report finds that while significant financial flows reach the Cerrado, particularly in the MATOPIBA region, the current architecture fails to align agricultural finance with zero-deforestation goals. Sustainable subsidized credit represents only 5.7% of total rural credit in the biome and is highly concentrated among large producers and a few financial institutions. In MATOPIBA, Constitutional Financing Funds (FCFs) provide 62% of subsidized credit but lack transparency regarding sustainability criteria. Blended-finance instruments show promise through risk-mitigation and value chain partnerships but remain limited in scale due to high Brazilian interest rates, regulatory complexity for foreign investors, and the strong economic incentive for land conversion. The authors recommend improving transparency via the Brazilian Sustainable Taxonomy (BST), increasing the share of sustainability-linked public credit, and scaling innovative blended structures to mobilize private capital.

• Subsidized rural credit flows to the Cerrado are substantial but disproportionate to production value, particularly in MATOPIBA. Between 2020/21 and 2023/24, the Cerrado received R$ 198 billion in subsidized credit, with MATOPIBA accounting for R$ 48.59 billion; in MATOPIBA, financing volume represented over 32% of the total despite the region generating only about 14.5% of agricultural production value.
• Sustainable subsidized credit is a very small fraction of total rural credit in the Cerrado and is skewed toward large-scale operations. From 2020/21 to 2023/24, sustainable lines represented just 5.7% of total rural credit in the biome. The RenovAgro and ABC programs show average loan sizes of around R$ 1.2 million per installment, significantly higher than other programs which average R$ 700,000 to R$ 750,000.
• Sustainable credit has poor territorial coverage across the Cerrado. Only 40% of municipalities in the biome recorded contracts under the RenovAgro/ABC Program, and 53% of municipalities had no sustainable credit lines under the National Program for Strengthening Family Farming (PRONAF).
• The rural credit market in MATOPIBA is highly concentrated among a few public banks, which limits competition and access to sustainable finance. Banco do Brasil, Banco do Nordeste, and Banco da Amazônia hold 85% to 90% of total subsidized rural credit in the region. In the sustainable segment, 45.5% of municipalities have either only one institution offering sustainable contracts or none at all.
• MATOPIBA suffers from a significant lack of transparency regarding the sustainability of its financial flows. Constitutional Financing Funds (FCFs) finance roughly 62% of subsidized credit in MATOPIBA, yet these and other non-program lines lack identifiable sustainability criteria, meaning over 72% of the region's subsidized credit lacks clear sustainability markers.
• Blended-finance instruments in the Cerrado are predominantly debt-based and vary in scale from R$ 20 million to over R$ 1.5 billion, but they struggle to compete with the economic gains of deforestation. These instruments often rely on Agribusiness Receivables Certificates (CRAs) due to their favorable tax treatment for international investors.
• Several structural barriers hinder the scaling of blended finance, including high domestic interest rates and a lack of bankable projects. Volatility in Brazilian interest rates led to the retirement of instruments like the Green CRA Tech and VERT Transition Bond. Additionally, the lack of a significant market premium for deforestation-free grains limits the incentives these funds can provide.

APA

Afflalo, L., Assunção, J., Hoover, N., & Wallock, W. (2026). Financing Sustainable Agriculture in the Cerrado Biome. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2026/03/Report-Financing-Sustainable-Agriculture-in-the-Cerrado-Biome.pdf

Chicago

Afflalo, Lucas, Juliano Assunção, Natalie Hoover, and William Wallock. Financing Sustainable Agriculture in the Cerrado Biome. Climate Policy Initiative, 2026. https://www.climatepolicyinitiative.org/wp-content/uploads/2026/03/Report-Financing-Sustainable-Agriculture-in-the-Cerrado-Biome.pdf.

Wikipedia

{{cite report |last1=Afflalo |first1=Lucas |last2=Assunção |first2=Juliano |last3=Hoover |first3=Natalie |last4=Wallock |first4=William |title=Financing Sustainable Agriculture in the Cerrado Biome |publisher=Climate Policy Initiative |date=March 2026 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2026/03/Report-Financing-Sustainable-Agriculture-in-the-Cerrado-Biome.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{afflalo2026financing, author = {Afflalo, Lucas and Assunção, Juliano and Hoover, Natalie and Wallock, William}, title = {{Financing Sustainable Agriculture in the Cerrado Biome}}, institution = {Climate Policy Initiative}, year = {2026}, month = mar, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2026/03/Report-Financing-Sustainable-Agriculture-in-the-Cerrado-Biome.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }