Brazilian agri-data company Agrotools plans to complete what it says will be the world’s largest platform for payments for environmental services, after securing a subsidized government loan, an executive told Reuters this week.
The platform will enable farmers to receive market-rate lease payments in exchange for preserving native vegetation on their land, Bernardo Pires, Agrotools’ government relations manager, said. Funding will come from businesses and governments seeking to offset their carbon footprint, linking them with farmers in one of the world’s largest carbon sink regions.
Agrotools estimates that 280 million hectares (692 million acres) of native vegetation sit on private farms in Brazil. Of that, roughly 70 million hectares can be legally cleared, with 30 million hectares classified as highly suitable for agriculture.
The company hopes farmers will choose lease income over planting crops or raising cattle in sensitive biomes like the Amazon and Cerrado, reducing climate and credit risk while curbing greenhouse gas emissions.
“It’s what farmers have always wanted,” Pires said. “To get paid for environmental services.”
Rising pressure to clear land for agriculture, driven by low commodity prices, costly loans, and the withdrawal of global grain traders from an Amazon conservation pact, makes the timing favorable for the platform, he added. Soy and cattle are major drivers of deforestation in Brazil, a key food exporter to China, the U.S., and Europe.
Agrotools estimates the platform could attract $15 billion in investment over five years, protecting an area roughly seven times the size of the Netherlands. The figure is based on annual lease payments of $100 per hectare of preserved native vegetation.
Two Agrotools projects, including this platform, have been approved for funding under the government’s “Eco Invest” program.
($1 = 5.2598 reais)