In a decade marked by the proliferation of sustainable investments, the Green Rural Product Note (CPR) emerges as a potential source of financing for the Brazilian agricultural sector. It is an instrument that aims to raise financial resources to maintain farming operations and, at the same time, preserve biodiversity.
Recently, Law 8,929/94 (CPR Law) has undergone several changes through Law 13,986/20 (Agro Law). Among them, the inclusion of subsection II in paragraph 2 of article 1, which allowed the issuance of CPRs "related to the conservation of native forests and their respective biomes and to the management of native forests in the scope of the public forest concession program, or obtained from other forestry activities that may be defined by the Executive Branch as environmentally sustainable,” an operation recently regulated by Decree 10,828/21.
With the changes, the possibility arises for rural producers to be paid for an activity that they already perform in strict compliance with the law, namely maintenance and conservation of native forest, as is the case of legal reserves,[1] and receive an incentive to expand this activity, which will help mitigate the environmental damage often attributed to rural production. Furthermore, the measure will contribute to improving the image of Brazilian agribusiness in the domestic and foreign market, which is often blamed for deforestation.
From a financing standpoint, there is no lack of interest in the application and diffusion of the instrument. Companies that, by force of their activity, release harmful gases into the environment will be able to use a mechanism capable of guaranteeing the carbon credits necessary to compensate for the damage they cause, regardless of whether they operate in Brazilian territory.
A factor that contributes and serves as an incentive for the diffusion of the document is the National Policy of Payments for Environmental Services (Law 14,119/21). This standard reinforces the more sustainable approach to the environmental issue and creates the perfect scenario for new investments in the sector, when added to the commitments made by Brazil at the recent COP 26, such as the pact to reduce methanol gas emissions by 30% by 2030 and the declaration to restore and protect the world's forests, which includes the Brazilian Amazon, with estimated investments of US$ 19.2 billion.
There are still issues to be overcome to popularize the security, such as who will be responsible for certifying the instrument, how the commitments signed will be monitored, the role of government institutions in their validation, and how the Brazilian carbon credit market will be regulated, among other issues.
Despite all this vagueness, there is no sign of stopping anyone who already wants to take advantage of the changes implemented. Environmental conservation, through the use of crop/product monitoring techniques known to the market, can be a conditioning factor or even a guarantee for the issuance of a traditional CPR. Those who see the changes implemented in the New Agribusiness Law as an opportunity for new business are already ahead of the curve to take advantage of the benefits provided by these legal innovations. With the Green CPR they can obtain financing and, at the same time, invest in sustainability, something that is currently very well regarded by the market.
[1] Law 12,651/12, article 12.
