Agrotools, a leading Brazilian agricultural data services firm, will finish building what it says will be the world’s biggest platform for payment of environmental services after securing a subsidized government loan, an executive told Reuters this week.
The platform allows farmers to receive lease payments, at market rates, in exchange for keeping native vegetation intact on their land, Bernardo Pires, the firm’s government relations manager, said in an interview.
The money will come from businesses and governments obliged to neutralize their carbon footprint, connecting them with farmers in a region regarded as one of the world’s largest carbon sinks.
In Brazil, 280 million hectares (692 million acres) of native vegetation lie inside private farms, according to Agrotools. Around 70 million hectares can be legally cleared and, of that, 30 million hectares have “high agricultural aptitude” with suitable soil, climate and logistics conditions, according to the company.
Agrotools is betting that farmers will prefer lease income to planting crops or raising cattle in sensitive biomes such as the Amazon and the Cerrado savannah, avoiding credit and climate risk while curbing the greenhouse gas emissions that cause global warming.
“It is what farmers always wanted,” Pires said. “To get paid for environmental services.”
Pressure to clear more land for agriculture has grown in major food producer Brazil after global grain traders quit an Amazon conservation pact to keep tax incentives in the country’s biggest farming state. Combined with low commodity prices, and costly loans and inputs, that makes the moment ripe to launch the platform, Pires said.
Soy and cattle are major drivers of deforestation in Brazil, a large food exporter to China, the U.S. and Europe.
Agrotools’ platform could attract $15 billion in investments over five years, preserving a prime agricultural area around seven times the size of the Netherlands. The value is based on annual lease payments of $100 per hectare of preserved native vegetation, Pires said.
