Brazil’s Cerrado is a vast, wooded savanna rich in biodiversity. Covering one fifth of the country and equivalent in size to England, France, Germany, Italy and Spain combined, Brazil’s Cerrado stretches two million square kilometers across the center of the country.
We now know the region hosts more than 10,000 unique plant species, providing sustenance and shelter for threatened, iconic animal species including giant armadillos, tiger cats and maned wolves. Beyond admiring its sheer wealth of biodiversity, scientists are just beginning to comprehend the Cerrado’s critical role in regulating rainfall patterns and absorbing the carbon gasses that contribute to climate change.
Today, large-scale soybean cultivation is contributing to stark transformation and degradation of the Cerrado at twice the rate of similar degradation in the Amazon. In order to address this challenge, a new financing program – announced in August 2018 – provides long-term loans to farmers who commit to cultivating lands that have previously been cleared, and don’t require any additional forest clearing. This program offers new hope for the Cerrado’s threatened ecosystem.
Big businesses make big commitments for sustainable agriculture
While pressure by environmental activists along with Brazilian legislation has successfully kept the majority of the Amazon Basin intact, more than 60 percent of the Cerrado — Brazil’s second largest biome — has been converted to graze cattle and plant soy along with corn, cotton, sugarcane and other crops.
Many multinational companies have made commitments to deforestation-free sourcing, including the Cerrado Manifesto which includes more than 60 companies and calls for immediate action to stop deforestation in the region. So far, one of the challenges has been creating appropriate incentives for producers to shift production practices onto already cleared land.
A new finance initiative announced in October 2018 by Bunge, The Nature Conservancy and Banco Santander is part of a broader effort by environmentalists, businesses and banks to meet the growing demand for soy beans without further destroying valuable forest ecosystems.
This innovative financing approach is key to the work of our conservation and markets initiatives.
These initiatives aim to align various sources of capital to ensure that financial institutions, along with other supply chain actors, provide an increase of public and private capital in support of deforestation-free commodity-related practices and compliance with laws that foster zero deforestation.
By creating an incentive for farmers to expand production on land that’s already been cleared, the new funding mechanism complements the goals of the Cerrado Manifesto. If this pilot project is successful, the plan is to increase the $50 million in initial capital, and scale the program with additional investors and farmers.
Through our Forests and Agricultural Markets Initiative, we have been helping to support The Nature Conservancy’s work to make deforestation-free beef and soy a global standard — and to work with companies to protect the vulnerable Cerrado.
Learn more about this first-of-its-kind financing mechanism for soy farmers in the Brazilian Cerrado at nature.org.
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