4th March 2021
Independent, Bonsucro-certified sugarcane farmers in Brazil have been given access to a new credit line with lower interest rates based on their sustainability credentials.
Bonsucro-member, Socicana – the association of sugarcane farmers in Guariba, Brazil, has partnered with the financial cooperative, Sicoob Coopecredi, to create a fund, ‘Crédito Rural Verde’ that offers independent farmers the opportunity to borrow with much lower interest rates. The interest can be reduced to up to 4%, rather than the standard market of around 5%.
The new line of credit is only available to farmers that comply with sustainable agricultural practices. Farmers are eligible if they have achieved a certification from Bonsucro, Top Cana, or the Roundtable on Sustainable Biomaterials. Farmers with international certifications, like Bonsucro, that require compliance on a bigger number of sustainability criteria, are offered the most favourable interest rates.
Rafael Kalaki, Superintendent of Socicana, said, “This initiative is pioneering, as it democratises sustainable financing, since it supports small to large producers. At the same time, it creates incentives for other farmers to seek better practices for production, as this represents a lower cost of raising money.”
Currently, the estimated potential for distribution of resources, is BRL 4.6 million (around 818k USD). In January, from the first round of applications, nine producers were able to apply for the credit, from which five are Bonsucro certified farmers.
Livia Ignacio, Bonsucro’s Country Manager, Brazil, said “This new fund is a really positive step towards adding even more value to Bonsucro certification in Brazil. In addition to the environmental, social and operational benefits brought by adopting Bonsucro standards, the direct financial return and recognition by financial institutions is crucial to foster sustainable sugarcane agriculture.
Brazil currently has over 1 million hectares of Bonsucro certified sugarcane, representing around 10% of its national sugarcane planted area. The country is also the most representative in terms of global volumes of sustainable certified sugar and sugarcane bioethanol.
Paulo de Araújo Rodrigues is a Bonsucro-certified producer that was given a loan. He said, “This initiative by Socicana and Coopecredi, in addition to recognising producers who use good practices, could be a tool to accelerate the certification of producers in our region. Both fundraising and green rural financing will positively impact the finances of qualified producers.”
The news comes just a few months after sugarcane producers at Socicana sold sugarcane credits to international chocolate producer, Barry Callebaut, via Bonsucro’s Credit Trading Platform. The transaction gave the producers additional income, once again rewarding sustainable practices.