mobilizing capital to scale responsible expansion of crop livestock in brazil

14 The new government plan for the recovery of 40Mha of pastures (Dec.2023) Complementing the ABC+, at the end of 2023, the Brazilian Federal Government presented an ambitious program of collaboration between public and private sectors, including international capital, aimed at revitalizing up to 40Mha of degraded pastures over the next 10 years. The associated cost is estimated by the government at USD 120B1, with resources expected to come partly from international investors, including Development Financial Institutions (DFIs). The technical details of the implementation of the plan are still under discussion, but a comprehensive approach that takes into consideration the full spectrum of the economic, social, and environmental aspects of the agenda will surely create a favorable investment ecosystem. The land use dynamics and specificities of each region should be considered, especially the interaction between soy and cattle production. 1. Investments focus on enhancing pastures and livestock production, supporting grain cultivation in temporary crops or integrated systems like ILPF , and facilitating forest planting and agroforestry implementation.Other key stakeholders along the value chain can benefit from supporting this agenda and are already taking steps to collaborate To effectively promote cattle intensification and soy expansion, collaboration from stakeholders across the value chain is essential. This includes input companies, food producers, traders, distributors, and retailers, all of whom stand to benefit from their involvement. The pressing nature of these objectives is driving concerted efforts and aligning the interests of these various parties. Engaging in the agenda for the recovery of degraded pastures benefits stakeholders up and down the value chain: Value chain companies benefits1 1 2 345 2 3 4 5Meet scope 3 emissions targets and reduce public and regulatory pressureEnhance relations with downstream customers who are increasingly demanding DFC products Ability to influence emerging policies and frameworks to establish the new standardStrengthen relationships with producers Create reputational benefits and accelerate the implementation of DFC commitments To take advantage of the mentioned potential upsides, many leading companies in the value chain are taking steps to address deforestation issues and have started investing resources in this area. However, significant progress is still needed. Regarding the financial sector, one of the key challenges in financing the transition towards sustainable and DCF agriculture lies in the absence of a solid track record. Indeed, this is a new agenda, and the market is still in the process of testing innovative models. That said, the economics of transitioning towards sustainable agriculture are robust, presenting the private sector with the potential to finance at scale: