Scaling up investment and commodity

sourcing in sustainable landscapes

March. 2017 – Brussels, Belgium

Day 1 – Session 3

João Shimada

MATO GROSSO

Area 903.378 km²Pop. 3.3 millionGDP USD 43 billionHDI 0.725 - highN

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Largest Soy producer (30M ton)Largest Cattle herd (30M herds)Largest Cotton producerLargest Corn producerTimber, Diamonds, BiofuelsFisheries, Poltry, Pork, Beef60% remaining native vegetation86% reduction of deforestation

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Cattle Ranching

• Restore 2.5 Mha pasture

• Increase productivity from 50 to 95 kgcw/ha/y

Grain Production

• Increase from 9.5 to 12.5Mha over pasture land

• Increase grain production from 50 to 92 Mton

Native Forest

• Increase sustainable managed forest from 2.8 to 6 Mha

Planted Forest

• Increase planted forests from 317 to 800 Kha

• Increase timber production from 4.8 to 11.75 Mm³

Deforestation

• Remain 60% native vegetation coverage

• Reduce 90% conversion over forest¹

• Reduce 95% conversion over cerrado (savanna)²

• Zero illegal deforestation by 2020

• Compensate 1 Mha by legal deforestation waived

Forest Code

• Register 90% into CAR by 2016

• Validate 100% of CAR by 2018

• Recover 1 Mha of APP (riparian áreas)

• Regularize 5.8 Mha of Legal Reserve – 1.9 Mha by restoration

Market Inclusion

• Increase from 30% to 100% technical assistance coverage

• Increase from 20% to 70% internal market share

• Increase from 15% to 30% institutional market share

• Increase from 411Mi BRL to 1.3Bi BRL credit accessed

Land Tenure

• Regularize 70% of plots with land title

PRODUCE INCLUDECONSERVEP

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1 – APPROACH – identify potential partners

2 – KICK-OFF MEETING – with partners 2013

3 – ENGAGEMENT – 6 multi-sectorial meetings 2014/15

4 – DIALOGUE – meetings new Govern staff 2015

5 – COALLITION – civil society organizations aligned 2015

6 – TARGETS – defined by consensus process 2015

6 – ANNOUNCEMENT – during COP21 in Paris 2015

7 – GOVERNANCE – defined the structure by decree 2016

8 – MANAGEMENT – defined the Statute, new members

a) choice of executive director

b) sectorial working groups

c) strategic plan and budget

d) financial strategy and work plan

1

EXISTING FAVORABLE CONDITIONS

1 – COMMODITIES COMPANIES PLEDGES

2 – NEED FOR LOW COST AND SHORT TERM

SOLUTION

3 – PROACTIVITY FROM BOTTOM SECTORS

4 – MARKET SHARE OF AMAZON REGION PRODUCTS

5 – COMMODITIES AND RAW MATERIALS PRODUCTS

6 – CURRENT HIGH COST AND SMALL SCALE

7 – WELL ORGANIZED AGRICULTURAL SECTOR

8 – IMPLEMENTATION OF NEW FOREST CODE

9 – BRAZILIAN NDC APPROVED

10 – STATE GOVERNMENT COMMITMENT (PCI)

2

POLICY/ACTIONS ADOPTED OR

PLANNED

1 – PRODUCE CONSERVE INCLUDE STRATEGY

2 – SOJA PLUS PROGRAM (CHINA, FEFAC, FEDIOL)

3 – NORWEGIAN FOOD INDUSTRY AGREEMENT

4 – RTRS JURISDICTIONAL APPROACH

5 – SUSTAINABLE MUNICIPALITIES PROGRAM

6 – TERRITORIAL BONUS FUND

7 – GREEN FOREST BONDS

8 – DE-RISKING FACILITY

9 – PECPLUS PROGRAM AND IMAC

10 – PRODUCING RIGHT PROGRAM – ALIANCA DA

TERRA

CHALLENGES

1 – KEEP IT SIMPLE AND FOCUS IN KEY ISSUES

2 – BE INCLUSIVE; NOT CREATE NEW RESTRICTIONS

3 – SIMPLE, FAST AND LOW COST IMPLEMENTATION

4 – EFFECTIVE INCENTIVES BY PERFORMANCE

5 – RE-INFORCE PUBLIC POLICIES AND INITIATIVES

6 – HIGH PRESSURE OVER NATURAL RESOURCES

7 – AVOID FREE RIDERS (INDIVIDUAL INCENTIVES)

8 – ECONOMIC AND POLITICAL CRISIS

9 – FRAGMENTED DEFINITION OF SUCCESS

10 – PCI TARGETS COST ESTIMATED 10Bi USD

3

PRODUCTS PARTNER NEEDED / EXPECTED BENEFITS RISKS

DE-RISKING CREDIT INSTRUMENTS

PUBLIC AND PRIVATE INVESTORS

• Reduced interest rates

• Pricing and risk hedges

• Pasture restoration• Native vegetation restoration • Cattle produtivity increasing • Legal reserve regularization

• Brazilian rating

TERRITORIAL BONUS MATCHING FUND

PUBLIC AND PRIVATE INVESTORS

• Impact Investments

• Payment by performance

• Improve communities livelihood

• Supply technical assistance• Improve smallholders income

• Brazilian rating

GREEN FOREST BONDS PUBLIC AND PRIVATE INVESTORS

• Impact Investments• Climate finance access

• Native vegetation restoration • Legal reserve regularization• Legal deforestation waive

• Brazilian rating

SOJA PLUS FUND SOY VALUE CHAIN • Sourcing agreements• Market recognition • Price premium

• Promote sustainable production

• Soja Plus program expansion • Improve soy farms

management

PRIVATE EQUITY FUND PUBLIC AND PRIVATE INVESTORS

• Impact Investments• Climate finance access

• Low carbon protein • Green energy (biofuels,

biomass)• Promote sustainable

production

• Brazilian rating

REDD+ CREDITS / OFF SETS PUBLIC AND PRIVATE INVESTORS

• Climate finance access• Compensation for

deforestation reduction

• Improve climate governance• Improve command and

control• Improve smallholders

livelihood

NON REFUNDABLE PUBLIC AND PRIVATE INVESTORS

• Impact Investments• Compensation for

deforestation reduction

• Supply technical assistance• Waive legal deforestation• Improve communities

livelihood • Land tenure regularization