Search Climate Insights Directory

The policy brief examines the Constitutional Financing Funds (FCFs) in Brazil's North, Northeast, and Midwest regions. It finds that while FCFs are designed to support small producers and low-income areas, the criteria for 'priority' beneficiaries and geographies have become so broad that they encompass nearly all producers and most municipalities. This lack of strict targeting has led to a concentration of resources in higher-value contracts and a small number of municipalities, particularly in the Matopiba region. Despite this concentration, FCFs remain a critical source of credit for the most underdeveloped municipalities in the North and Northeast, where alternative financing is often unavailable.

The report examines rural credit in the Cerrado, noting that while the biome accounts for about one-third of Brazil's rural credit and agricultural production, financing is highly concentrated among large producers and public banks. It highlights a growing reliance on private funding sources like Agricultural Credit Notes (LCA) and a significant scarcity of credit for family farming through programs like PRONAF. The authors argue that improving credit access for smaller producers is essential for increasing productivity and reducing deforestation pressures.

The report examines rural credit in the Cerrado, noting that while the biome accounts for about one-third of Brazil's rural credit and agricultural production, financing is highly concentrated. Average contract values in the Cerrado are 181% higher than in other biomes, primarily benefiting large-scale soy and cattle producers. While there is a growing trend toward private funding sources like Agribusiness Credit Notes (LCA), public banks—specifically Banco do Brasil—continue to dominate distribution. The study highlights a significant gap in credit access for small and medium producers (Pronaf and Pronamp), arguing that improving this access is essential for increasing productivity and reducing deforestation pressures.

The Cerrado biome accounts for approximately one third of Brazil's rural credit and agricultural production, with a high concentration of financial flows toward large-scale crop production, particularly soy. While the region has attracted more private funding sources like Agricultural Credit Notes (LCA) than other Brazilian biomes, the credit market remains dominated by public banks, specifically Banco do Brasil. There is a significant scarcity of credit for small and medium producers, as programs like PRONAF represent only 4% of the rural credit volume in the biome. The report argues that improving credit access for smaller producers is essential for increasing productivity and reducing deforestation pressures.

The report analyzes Brazil's agricultural risk management landscape, highlighting a significant gap in insurance coverage compared to global peers like the US and China. It examines key programs such as the PSR, Proagro, Garantia-Safra, and PGPM, noting high market concentration and a heavy reliance on credit over insurance. The authors argue that inadequate risk management leads to underinvestment and inefficient land use, recommending a shift in public funding from rural credit to insurance subsidies and the expansion of the Agricultural Climate Risk Zoning (ZARC) system.

The report examines Brazil's agricultural risk management landscape, focusing on public policies like PSR, PROAGRO, Garantia-Safra, and PGPM. It highlights a market characterized by high concentration, limited geographic reach, and a heavy reliance on soy insurance. The authors argue that inadequate risk management leads to underinvestment and inefficient land use, suggesting a shift in public funding from rural credit toward insurance and the expansion of market-based price risk instruments.

The document introduces SEI-PCS, a modeling tool designed to overcome the limitations of traditional country-level footprinting by providing spatially explicit data on production-to-consumption systems. By integrating subnational production data, domestic trade flows, and international customs data, SEI-PCS allows for the tracing of commodities back to their origin to assess impacts such as carbon emissions, biodiversity loss, and deforestation. The tool is the foundation for the Trase initiative, which specifically monitors deforestation risks associated with agricultural commodities like soy in Brazil, Indonesia, and Latin America, helping companies and governments evaluate the effectiveness of zero-deforestation commitments and identify policy 'leakage' effects.

The report examines the adoption of no-till farming, tractors, and fertilizers in Brazil from 2006 to 2017. It finds that while no-till farming has become more spatially decentralized, tractor use has become more concentrated in wealthy, urbanized regions, and fertilizer use has increased without a clear spatial pattern.

The report identifies three distinct patterns of agricultural technology adoption in Brazil from 2006 to 2017. The Direct Planting System (DPS) is converging, becoming more widespread across the country. Tractor use is diverging, with increased concentration in wealthier, urbanized regions of the South and Southeast. Fertilizer use has increased overall but lacks a clear spatial pattern, with growth scattered across diverse regions including the Cerrado and Caatinga.

The Responsible Commodities Facility (RCF) is a proposed debt fund designed to halt agricultural expansion into the Brazilian Cerrado by providing low-interest loans to farmers who produce soy and corn on degraded lands. The facility aims to raise US$ 300 million through green bonds to provide crop financing and land restoration loans, utilizing blockchain for traceability and a dedicated exchange to link producers with international sustainable buyers. Over 10 years, the RCF targets the restoration of 1.2 million hectares of land and the avoidance of 55 million tonnes of carbon emissions.

The paper finds that agricultural expansion in the Matopiba region, driven by soy cultivation, significantly increased GDP per capita and improved access to durable goods and electricity in municipalities within the Cerrado biome. While agricultural and services GDP grew, there were no significant effects on manufacturing GDP, local population, or educational outcomes.

The report argues that Burger King lacks transparency and effective policies to prevent deforestation in its supply chain, contrasting it with competitors like McDonald's. Through field investigations and satellite mapping, the authors link Burger King's suppliers—specifically soy traders Cargill and Bunge—to the destruction of the Brazilian Cerrado and Bolivian lowland forests. The document highlights the resulting loss of biodiversity, carbon emissions, and violence against indigenous peoples, while advocating for the expansion of the Brazilian Amazon Soy Moratorium to other Latin American ecosystems.

The document examines the surge of agricultural production in Brazil's MATOPIBA region, noting that expansion is heavily concentrated in the Cerrado biome. Between 1995 and 2012, Cerrado municipalities saw a 140% greater increase in agricultural production value than non-Cerrado areas, driven by cropland expansion and a shift from rice to soy. This boom led to an 11% higher increase in GDP per capita in Cerrado municipalities between 1999 and 2012, with gains in agricultural and services GDP, as well as improved access to electricity and durable consumer goods. However, the expansion did not significantly impact manufacturing GDP, population size, migration, or access to water and sewage.

The executive summary details how agricultural expansion in the MATOPIBA region, particularly within the Cerrado biome, has driven economic growth through increased grain production and higher per capita GDP, while having limited impact on social infrastructure and human capital.

The paper finds that agricultural expansion in Matopiba is concentrated in the Cerrado biome, driven by technological innovations in soil management and soy varieties. This expansion led to significant increases in GDP per capita, particularly through direct agricultural growth and indirect spillovers into the services sector. While it improved access to durable consumer goods and electricity, it had no significant impact on migration or human capital investments.