Agri3 Fund

USINA AÇUCAREIRA SÃO MANOEL– SUGAR AND ETHANOL PRODUCTION, BRAZIL

Key Facts

  • Investee: Grupo Scheffer “Scheffer”
  • Lender: Rabobank
  • Location: Brazil, Mato Grosso
  • Transaction size: USD 5 million
  • Term: 10-year loan
  • Instrument: Maturity Subordination Guarantee
  • AGRI3 guarantee exposure: 43% of loan value
  • Main activities: Sustainable production of soybean, cotton and corn through sub-soiling and forest protection

Investee background

Scheffer & Cia Ltda and affiliates was founded in 1986 and is one of the largest family owned farming groups in Brazil.
The main business activity of the group is producing:

The group has sustainability embedded as a core value in its business strategy and is actively researching and piloting more sustainable agricultural production techniques including biological crop management and regenerative agriculture.

Scheffer’s headquarters are in the city of Cuiaba and the company employs a total of ~2,000 employees in its 6 farming clusters and administrative unit.

Transaction description

Rabobank providing a:

USD 5 million loan to Grupo Scheffer.

Supported by a 43% Maturity Subordination guarantee from AGRI3.

The project aims to apply no-till agriculture in which new crops are planted over the remainders of the existing crops. In addition, a the new sub-soiling technique will be applied on 10,000 ha of land.

This technique allows to break through compacted land, which is caused by use of heavy machinery, without affecting organic material in the top soil and significantly increasing both the water draining as well as the water capturing capacity of the soil.

In addition, Scheffer has committed to the conservation of an additional 1,300 ha of legal reserves, beyond their legal requirement.

Project activities and expected impacts

Forest protection

  • Scheffer has committed to retain ~1,300 ha of surplus Legal Reserves, which is above the legal requirement.

Sustainable land use

  • The project applies sub-soiling on 10,000 ha of land, which is seen as the optimal tillage practice for sustainable intensification of crop production in semi-arid environments and results in increased drought resistance and resilience of production.
  • The project aims to achieve a 15% average yield increase on
project land.

Rural livelihoods

  • Training is expected to be delivered to employees in sustainable agriculture techniques with a target of 115 people.
  • Farm days will be organized for local farmers to spread knowledge on sub-soiling and regenerative farming techniques with a target of 150 farmers.

Project KPIs

AGRI3 KPIs Transaction targets
Area of natural habitats under management for protection.
1,300 ha of surplus to be retained on the farms in the Cerrado biome.
Increase in agricultural yield through sustainable intensification.
Estimated increase in tons per ha:

- 0.1 ton soy

-0.4 tons cotton

- 3 tons corn

Note that these are one-off improvements
(not year-on-year).
Agricultural area under
sustainable management.
10k ha of area to be subsoiled.
Certified area to RegenAgri, total area to be
agreed on with Rabobank Brazil and Scheffer.
Number of farmers trained in, and technology transferred for, best management practices in sustainable agriculture/forest protection.
Training for staff on the farm in one farm day held, reaching 120 farmers (target 115), currently in discussion for a second farm dat. We aim to track Scheffer’s other education and training initiatives.