Instituto Centro de Vida (ICV) has announced that Novo Campo, a sustainable cattle ranching initiative in Brazil's Mato Grasso state, received an investment of 11.5 million Euros from the Althelia Climate Fund to support the program's efforts to increase economic, social and environmental performance of local ranches. This is the first international private investment in a program aiming at verified deforestation-free, sustainable beef production in Brazil.
The financing will support the recently founded PECSA (Pecuária Sustenável da Amazônia/Amazon Sustainable Cattle Ranching), a for-profit spin-off of ICV, which will serve as a technical assistance, management and investment firm providing operational support for Novo Campo.
Millions of hectares of forests have been lost to cattle ranching in the Brazilian Amazon in recent decades, making the beef industry one of the leading drivers of deforestation. And these cleared lands have not been well managed – pastures and soils are degraded, the water supply is threatened and product quality does not meet market expectations. Novo Campo, initiated by ICV in 2012, partners with local ranchers, supply chain actors and financial institutions to restore degraded lands, increase productivity, improve animal welfare, product quality and transparency, hence reducing deforestation in the beef value chain.
Through these practices, Novo Campo seeks to supply the demand from progressive companies that have committed to only source verified deforestation-free, sustainable beef as part of pledges such as that of the Consumers Goods Forum and initiatives such as the Tropical Forest Alliance. The program is also aligned with the emerging standards being developed by the Global and Brazilian Roundtables of Sustainable Beef, serving as an important laboratory for testing innovative approaches.
Novo Campo’s pilot phase in 14 Mato Grosso ranches tested a new production model that is based on the progressive implementation of Good Agricultural Practices (GAP) for beef cattle ranching. Results of this pilot phase demonstrated the viability of the model with a one-year reduction in cattle slaughter age, a three-fold increase in productivity and an increase in quality of product and profit. ICV envisions that by scaling up this approach regionally while establishing a jurisdictional public-private partnership to incentivize and secure improved local governance, this initiative will contribute to reducing the pressure on remaining forests while expanding production and strengthening the local economy.
“We are grateful for Althelia’s decision to invest in Novo Campo and PECSA. It demonstrates that with solid proof of concept, a clear business case and a scalable model, it is possible to attract financing at a commercial scale to disseminate sustainable cattle ranching in the Amazon,” said Renato Farias, ICV’s executive director. “This will produce significant positive impacts on both the environment and the economy of the region.”
The Althelia Climate Fund is managed by Althelia Ecosphere, a London-based asset management firm dedicated to financing transitions toward sustainable land use and ecosystem conservation. As the first international investor backing Novo Campo’s strategy to address deforestation in the cattle ranching sector in Brazil, Althelia will help PECSA expand the program to increase productivity and prevent deforestation in northern Mato Grosso. PECSA will give ranchers access to the technology and finance needed for initially restoring 10,000 hectares of degraded pastures and improving the management of 34,000 cattle by 2016. This should incentivize participation from more ranchers and attract new investments, which will have a transformative effect on the system as whole, contributing to Mato Grosso’s sustainability goals and State REDD+ program.
“Novo Campo is a much-needed and proven approach to address deforestation in the cattle ranching sector in Brazil,” said Juan Carlos Gonzalez-Aybar, Latin American director of Althelia. “We’re honored to help PECSA expand the program and hope other partners will recognize the financial and environmental benefits of this type of investment and join in.”
About Novo Campo
The Novo Campo Program promotes sustainable practices on cattle ranches in the Amazon region, improving their economic, social and environmental performance. By doing this, it contributes to reducing deforestation, conserving or restoring natural resources and strengthening the local economy.
Instituto Centro de Vida (ICV) builds shared solutions for land use sustainability in the Amazon, based on Mato Grosso state. Our work seeks to reconcile agriculture and forestry with the conservation and restoration of natural ecosystems based on studies and analysis as well as on practical experiences on the field, always seeking the active participation of local stakeholders.
Althelia Ecosphere aligns the earth’s economy with its ecology by financing the transition towards sustainable land use, creating new environmental assets that reflect the value of natural capital. Our investments reduce deforestation, mitigate climate change, protect biodiversity and provide a fair and sustainable living to rural communities through activities that also offer investors competitive returns.
Pecsa is a cattle ranching technical assistance and management firm based in Alta Floresta, Northern Mato Grosso state, which provides ranchers in the Amazon with access to the technology, finance and markets for sustainable beef production. We offer business models adapted to the situation of each ranch and apply state-of the art technologies that provide superior economic results and guarantee the transparency in the supply chain, while also conserving and restoring forests, soils and water resources.