This is the first article resulting from the partnership with our clients and partners at DiBlasi, Parente & Associados. This partnership is a result of the common ideal of both institutions to merge talent, experience, technology and purpose.
Sigalei has joined Di Blasi, Parente & Associados to create increasingly comprehensive content, relying on the expertise in strategic analysis of the office's Institutional and Governmental Relations team and experience in monitoring and reporting information and qualified data by Sigalei.
Agro and public policies
The development of the Green Economy – a sustainable alternative to the current economic model - has been discussed for decades, but in 2021 it gained even greater momentum. Especially in a post-pandemic world, where environmental and social issues carry weight in the recovery of economies, which places agriculture as one of the protagonists in this process. This is good news for Brazil, since Brazilian agribusiness has been playing a fundamental role in the country's economic growth. Besides making Brazil become one of the main global exporters over recent years, the agribusiness GDP corresponded to 26.6% of the Brazilian GDP in 2020, according to data from the Center for Advanced Studies on Applied Economics (Cepea) in partnership with the Brazilian Agriculture and Livestock Confederation (CNA).
However, the challenges are still great. Starting with ensuring an increasingly sustainable, inclusive, productive, conscious, technological and trained production. Under international pressure for effective actions for the environment, the Brazilian Government announced a series of environmental measures and affirmed the country's commitment to more sustainable economic development. In fact, the government has been working towards improving the business environment, approving important regulatory frameworks for this new moment, such as the startups framework and the infrastructure regulatory frameworks (cabotage, electricity sector, logistics, sanitation, natural gas and oil) to advance in this direction.
Naturally, agribusiness investors care about the impact of their investments on society and the environment, which is why the importance of maintaining good relations is essential, from the relationship of public powers among themselves to private initiatives, configuring greater legal security, which is essential for attracting investment. It is certain that Brazil has many characteristics that make it a great potential for the green economy, therefore, a strong action in agendas with the theme by governments and also the modification by private companies towards sustainable development will be necessary.
Plano Safra 2021/2022 and Government investments in the sector
To stimulate agribusiness in the country, in June the Federal Government released the Plano Safra 2021/2022, which contains definitions on rural credits and financing lines with Union incentives for costing and investment in the sector. The current Plan had an increase of 6.3% compared to the previous one to warm up greener, more inclusive and prosperous production practices, while still being competitive.
The highlight was the green bonds, fixed income, which are used to raise funds for the implementation or refinancing of projects and assets that have positive characteristics for an environmental or climate perspective and brought great prominence to Brazil in this market. This is because, according to data from the Climate Bonds Initiative (CBI), the country is the largest green bond market in Latin America, with a 42% share of emissions in the last five years. This is a context of great opportunities for organizations that can link their objectives and goals to the socio-environmental performance of their activities.
The issuance of bonds is an alternative to enable initiatives and technologies that have positive socio-environmental impacts. According to the Ministry of Agriculture, Livestock and Supply (Mapa), this new financing alternative for Brazilian agribusiness moved R$ 8.1 billion in the Brazilian economy between 2019 and 2021, through the promotion of sustainable practices and technologies.
Furthermore, the Brazilian government has been adopting measures that make the business environment less bureaucratic and more attractive, such as defining global criteria for agriculture and livestock and drafting an investment plan for sustainable agriculture with the CBI, and the enactment of Law No. 13.896/20 (Agro Law), which improves the regulatory environment for granting credit to livestock and agriculture businesses. These solutions aim to expand this market and attract foreign investors.
In a post-pandemic scenario where – in the medium term – it is advisable to rethink everything, economic recovery must more than ever go hand in hand with environmental recovery. The moment for sustainable reconstruction is now. Brazilian agribusiness has already traveled much of the way and the country, as one of the world's largest agricultural powers, can take the lead.
______________________________________________________________________________________________________________
Click and learn more about the specialist area in Governmental Relations at Di Blasi, Parente & Associados.
Contact Sigalei and transform data into political knowledge for your organization
