mobilizing capital to scale responsible expansion of crop livestock in brazil

BOSTON CONSULTING GROUP 1Executive SummaryBrazil boasts over 100 million hectares of degraded pastures available for agricultural and livestock expansion. This is sufficient to meet the anticipated increase in production until 2040 without cutting a single tree. The strategic recovery and conversion of these pastures presents a significant opportunity to enhance agricultural productivity and to generate socio-environmental benefit at scale. By making more effective use of lands already cleared, this initiative crucially helps to alleviate the pressure on native vegetation areas. While the environmental and economic advantages are clear, realizing these benefits fully requires bridging a considerable financing gap. To recover 40 million hectares, the official target of the Brazilian government, an estimated USD 120 billion is needed to scale these recovery efforts across Brazil’s vast landscapes. The economic viability of this activity is already proven, but its financing at scale will require some innovative financing models and the construction of the associated track-record. Our immediate call to action is to mobilize USD 2 billion in catalytic capital to unlock the development of such mechanisms, complementary to other financing sources for the Low Carbon Agriculture Plan. Creating a robust and conscientious framework to support this agenda is essential for sustainable long-term economic growth. By implementing a structured governance system with comprehensive socio-environmental risk mapping, we can foster other positive impacts related to biodiversity, water resources management, welfare of local communities, soil fertility or carbon capture. Supportive public policies in that sense will also be an essential component for achieving outcomes that combine financial return with social and environmental sustainability. Brazil’s unique position as an agricultural leader offers immense potential for creating socio-environmental benefits alongside economic returns. The mobilization of USD 2 billion in catalytic capital is key to accelerate the deployment of blended finance models in the early stages of the maturity curve of the sustainable land use investments. Brazil’s pivotal role is not only crucial for ensuring global food security but also for leading the transition to sustainable agriculture at a global level.