Brazil’s Cerrado is main beneficiary of 2021 pledge to end deforestation

  • The Financial Innovation for Amazonia, the Cerrado and Chaco, or IFACC, has allocated $234.5 million for projects aimed at expanding agriculture to already deforested land in Brazil’s Cerrado grasslands.
  • First announced at the COP26 climate summit in 2021, the initiative aims to place small farms on the sustainability agenda by showing that it’s possible to increase profit without clearing native vegetation.
  • Funded projects include soybean farming on degraded pastureland and financial incentives for farmers who maintain more preserved native vegetation on their land than the minimum required by law.

An alliance announced at the 2021 U.N. climate summit in Scotland has already allocated $240 million for projects that align increased agricultural productivity with environmental preservation in Brazil. The IFACC, or Financial Innovation for Amazonia, the Cerrado and Chaco, is led by the Tropical Forest Alliance (TFA), The Nature Conservancy (TNC) and the United Nations Environment Programme (UNEP). There are 16 signing entities, including Spanish lender Banco Santander and Swiss-based agrochemical producer Syngenta.

“We see an important role not only from the financial sector, which is placing money on the table, but also from companies that depend on soybean and cattle farming in Brazil who are helping [the initiative],” said Danielle Carreira, director of financial sector engagement at the TFA. She said the initiative’s main objective is to place farmers on the sustainability agenda while still allowing them to increase their operations. “We want to give farmers a voice in this conversation.”

Of the 11 projects funded by the initiative, seven are in the Cerrado, Brazil’s megadiverse savanna biome, and received 98% of the funding allocated to date, or $234.5 million. The money is being applied to projects that recover degraded pastureland to preserve native vegetation and increase productivity in areas that have already been deforested.

The Cerrado isn’t just the planet’s largest and most biodiverse tropical savanna — it’s also where 60% of Brazil’s agricultural production takes place. Unlike the Amazon, where deforestation rates dropped in 2023, these numbers continued to rise in the Cerrado, with more than 1.1 million hectares (2.7 million acres) of native vegetation — an area the size of Jamaica — cleared, according to data from INPE, Brazil’s national space agency. The largest area of razed forests lies in Matopiba, the border region between the states of Maranhão, Tocantins, Piauí and Bahia, which has become the nation’s new agricultural frontier.

“Brazil is a powerhouse and will continue to gain clout, and farmers want to increase their income,” said Greg Fishbein, director of agricultural finance at TNC. “So the question is how we can provide financing and support for them to increase production without cutting down trees.”

Carreira added that “Soybean and cattle production in Brazil will not stop. So we need to help with the transition.”

Projects funded by the IFACC in the Cerrado are aimed at restoring pastureland and spreading agriculture to already deforested areas. Image courtesy of Responsible Commodity Facility.

Projects funded in the Cerrado include Reverte, which has already allocated $116.9 million to farmers in Mato Grosso, Goiás and Maranhão states to expand their soybean production onto degraded pastureland instead of clearing native vegetation. According to the IFACC report, the program has already led to the use of 82,941 hectares (204,952 acres) of degraded pasture. The goal is to grow this number to 1 million hectares (2.5 million acres) in coming years.

“Much is said about the need to make better use of degraded pastureland, so it’s very encouraging to see a project of this magnitude completely dedicated to this issue. It is one of the critical production models that we need to increase,” Fishbein said.

Pastures occupy 29% of the Cerrado, some 57 million hectares (141 million acres), or an area larger than France. A study published in 2021 showed that most of this land can be recovered.

Another project under the IFACC, the Responsible Commodity Facility, has already allocated $47.2 million to farmers in the Cerrado committed to protecting more native vegetation on their properties than is required by law. The goal is to guarantee protection of 11,300 hectares (27,900 acres) of land, an area that’s expected to increase tenfold by 2025. “This is a great example of how to bring economic value to preservation,” Carreira said.

The IFACC is also funding four projects in the Amazon as well as an initiative that covers both the Amazon and the Cerrado. In the rainforest, the projects are aimed at the bioeconomy, especially the development of agroforestry systems together with local communities.

The coalition’s objective is to raise $1 billion by 2025 and increase its work in the Chaco, a large biome composed of dry forest occupying a region that straddles northern Argentina, Paraguay, Bolivia and Brazil.

Banner image: The spread of agribusiness in the Cerrado for production of commodities like soybean, cotton and corn places the planet’s largest tropical savanna at risk. Image courtesy of Responsible Commodity Facility.

This story was reported by Mongabay’s Brazil team and first published here on our Brazil site on March 22, 2024.