ALIGNING RURAL CREDIT WITH THE FOREST CODE

The report argues that Brazil can align agricultural growth with natural resource protection by linking rural credit access to compliance with the Forest Code. It proposes amplifying credit limits for producers without environmental liabilities or those with approved Environmental Regularization Programs (PRA). The authors assert that this alignment would require no additional treasury resources, as it merely redirects existing funds toward producers providing public goods like forest conservation. The document highlights that a significant portion of current credit contracts are near their limits, suggesting that such a policy would have a substantial impact. It draws parallels to the European Union's Common Agricultural Policy, which conditions payments on environmental rules, and notes that previous Brazilian Central Bank resolutions linking credit to environmental compliance in the Amazon led to a 15% reduction in deforestation between 2008 and 2011.

• Brazil has the potential to more than double its agricultural production using existing areas, eliminating the need for further deforestation or suppression of native vegetation.
• The authors recommend that the Brazilian government amplify credit limits for rural producers who are either free of environmental liabilities or have an approved Environmental Regularization Program (PRA).
• Integrating the Forest Code with Rural Credit would not require new funding from the National Treasury because it would simply prioritize the direction of existing resources toward compliant producers.
• A significant number of rural credit contracts are currently close to their limits, meaning many producers would benefit from the proposed limit expansions. In the 2016/2017 agricultural year, 14% of the total amount of credit across analyzed lines came from contracts exceeding 95% of their limits.
• Historical evidence shows that conditioning rural credit on environmental rules in the Amazon between 2008 and 2011 resulted in a 15% decrease in deforestation and prevented approximately R$2.9 billion (US$ 730 million) in loans from being issued.
• The proposal aligns with the European Union's Common Agricultural Policy (CAP), where over 95% of expenditures are direct payments to producers conditioned on the provision of public goods such as biodiversity and forest conservation.

APA

Assuno, J., & Souza, P. (2019). ALIGNING RURAL CREDIT WITH THE FOREST CODE. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2020/05/White_paper_Credit_FCode_ENG_FINAL_07JUN2019.pdf

Chicago

Assuno, Juliano, and Priscila Souza. ALIGNING RURAL CREDIT WITH THE FOREST CODE. Climate Policy Initiative, 2019. https://www.climatepolicyinitiative.org/wp-content/uploads/2020/05/White_paper_Credit_FCode_ENG_FINAL_07JUN2019.pdf.

Wikipedia

{{cite report |last1=Assuno |first1=Juliano |last2=Souza |first2=Priscila |title=ALIGNING RURAL CREDIT WITH THE FOREST CODE |publisher=Climate Policy Initiative |date=February 2019 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2020/05/White_paper_Credit_FCode_ENG_FINAL_07JUN2019.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{assuno2019aligning, author = {Assuno, Juliano and Souza, Priscila}, title = {{ALIGNING RURAL CREDIT WITH THE FOREST CODE}}, institution = {Climate Policy Initiative}, year = {2019}, month = feb, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2020/05/White_paper_Credit_FCode_ENG_FINAL_07JUN2019.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }