WHITE PLAINS, N.Y.,
SAO PAULO and ARLINGTON, Va., Aug.
29, 2018 /PRNewswire/ -- Today Bunge S.A., a subsidiary of
Bunge Limited (NYSE:BG) ("Bunge"), Banco Santander Brasil S.A. (B3:
SANB11) ("Santander Brasil") and The
Nature Conservancy ("TNC") announced they have jointly developed a
first-of-its-kind financing mechanism for soy farmers in the
Brazilian Cerrado.
The program is designed to promote agricultural production
without further deforestation or conversion of native vegetation,
by providing long-term loans to farmers willing to commit to this
approach. Most of the loans currently available to soy farmers are
for less than a year to finance their annual crop costs. This new
mechanism will offer loans of up to 10 years, recognizing that
investments in land acquisition and preparation have a long-term
payback.
Soybean production in Brazil
nearly tripled between 2001-2017. The Cerrado has supported much of
this expansion, adding 9.6 million hectares of planted soy during
this timeframe, a significant part of which were in areas with
native vegetation[1]. Over the next decade, it is
estimated that large additional planted areas will be needed in the
Cerrado to accommodate forecasted growth[2].
The new financing mechanism is part of a broader effort by NGOs,
companies and banks to meet the growing demand for soy beans in a
sustainable way. Last year, Bunge, TNC and other organizations
launched Agroideal.org – a planning tool to help the soy sector
make better decisions about where to expand production. Traders and
consumer goods companies have also made commitments to
deforestation-free sourcing, but to date little has been done to
create incentives for farmers to expand production on land that has
been already cleared.
"Currently there are more than 25 million hectares of already
cleared land in the Cerrado suitable for soy expansion," said
Mark Tercek, CEO, TNC. "We believe
that introducing long-term financing will provide a real incentive
for farmers willing to produce more sustainably and go beyond
compliance with environmental laws and regulation. TNC brings its
science-based approach to the environmental framework and
monitoring for this mechanism. We will also invest our own
capital in the project, together with Bunge
and Santander Brasil."
The financing program will be piloted with approximately
USD$50 million in capital, and
provide loans to individual, family or corporate farmers in
eligible locations. The loans are expected to be offered to farmers
beginning in September. Once the model is demonstrated to be
financially viable and environmentally sound, Bunge, Santander Brasil and TNC intend to scale the
program with additional investors and farmers.
"In 2015, Bunge committed to eliminate deforestation from its
agricultural supply chains globally, and developing commercially
viable incentives for conservation is an important part of our
strategy," said Soren Schroder, CEO,
Bunge Limited. "Bunge's extensive
farmer relationships and established presence in the Brazilian
agribusiness sector, as well as expertise in risk management, will
be of great benefit in developing and managing a pipeline of
investments for the program, and we look forward to working
together with TNC and Santander to achieve our goals."
"As a financial partner and one of the leading banks for farm
credit in Brazil, and with a
demonstrated commitment to sustainability, Santander Brasil is uniquely suited to help get
the program off the ground and position it well for expansion after
the initial pilot phase," said Sergio
Rial, CEO, Santander Brasil
and Co-Chair of the Latin American Conservation Council. "We look
forward to playing a game-changing role in sustainable agricultural
expansion that benefits farmers and customers while preserving the
environment."
Bunge Limited (www.bunge.com, NYSE: BG) is a leading
global agribusiness and food company operating in over 40 countries
with approximately 32,000 employees. Bunge buys, sells, stores and
transports oilseeds and grains to serve customers worldwide;
processes oilseeds to make protein meal for animal feed; produces
edible oil products for consumers and commercial customers in the
food processing, industrial and artisanal bakery, confectionery,
human nutrition and food service categories; produces sugar and
ethanol from sugarcane; mills wheat, corn and rice to make
ingredients used by food companies; and sells fertilizer in
South America. Founded in 1818,
the company is headquartered in White
Plains, New York.
Santander Brasil Operating in the local
market since 1982, Santander Brasil
is one of the largest banks in the national financial system and
the only international institution with a retail scale. It has more
than 22 million active customers, around 48,000 employees and a
network of more than 3,400 branches and service stations. It
operates in Brazil on two main
fronts: the commercial bank, which combines retail banking with
services for small and medium-sized enterprises, and wholesale,
focused on large companies and operations in the capital markets.
It is part of the Santander Group, the largest financial
conglomerate in the Eurozone by market capitalization, with a
strong presence in Latin
America.
The Nature Conservancy (TNC) is a global conservation
organization dedicated to conserving the lands and waters on which
all life depends. Guided by science, we create innovative,
on-the-ground solutions to our world's toughest challenges so that
nature and people can thrive together. TNC is a partner in the
Collaboration for Forests and Agriculture- a joint effort of the
National Wildlife Federation, TNC, WWF, and the Gordon and Betty
Moore Foundation, to eliminate deforestation and land conversion
from beef and soy supply chains in the Brazilian Amazon and
Cerrado, and the Chaco region of Argentina and Paraguay. To learn more,
visit www.nature.org or follow @nature_press on
Twitter.
[1] Agrosatélite. 2016/17 Mapping of soy areas in Cerrado
biome.
[2] Carneiro et al. 2018. Cerrado: Paths to sustainable
territorial occupation, land use and production – Soybeans
expansion area.
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SOURCE Bunge Limited