Cattle – Brazil

Key Facts

• Client: Grupo Vilela de Queiroz (GVQ)
• Term: 10-year loan
• Guarantee instrument: Maturity subordination guarantee
• Guarantee exposure: 40% of loan value
• Effective date: November 2021

Deal Summary

AGRI3 is supporting the mobilisation of USD 6m from Rabobank for GVQ.

GVQ is a family business, owned by the Vilela de Queiroz family who run large beef cattle operations in several states of Brazil. The company integrates soy and corn production together with their livestock production for optimising the use of land.
The loan will support GVQ to transition their two farms through 1) sustainable intensification of its cattle operations on the farm, 2) recover degraded pastureland through livestock-crop integration and soil improvement, 3) accelerate forest code compliance and support the isolation and recovery of Permanent Preserved Areas (APP’s) and 4) support the construction of new workers’ accommodation.

Impact Rationale

The loan is supporting GVQ to achieve sustainable intensification of its cattle operations on the farm.
Over the course of 10 years, GVQ is expected to recover 2,600 ha of degraded pastureland through Livestock-Crop Integration (LCI), rotating soybean and corn production with pastureland and rotational grazing. Additionally, soil quality of 923 ha will be corrected through soil improvement techniques.

The farm is also set to intensify cattle production on improved pastures from 1.6 AU (animal units)/ha to 2.8 AU/ha. This will be achieved through the procurement of 1,300 female cows (for breeding), which is above Brazil’s average productivity of 1.0 AU/ha.

The project includes the protection of Permanent Protection Areas (APPs) and preservation of 892 ha of forest via fencing, and limiting cattle movement to restricted areas on the Guapore farm.

Additionally, APPs at the Corumbiara farm will be protected and recovered. 1,286 ha are in a moderate to severe state of erosion and require protection and restoration which involves planting natural vegetation, fencing and defining the edges of the APP through land construction activities.

With support of the facility GVQ will achieve full compliance with Forest Code on their farms within 10 years.

In addition, houses will be constructed and renovated for field workers. Training is expected to be delivered and education will be provided for employees on sustainable practices and efficient farm management. A profit-sharing and incentive programme will be developed to support work motivation and performance, where worker’s pay will be supplemented by a variable incentive scheme, linked to farm indicators such as cow pregnancy, calf-weaning efficiency and others.

Impact Targets

Forest Protection

2.1K ha of forest protected and restored

Sustainable Agriculture

923 ha recovered through soil improvement techniques and 2,600 ha of pastureland renovated