Agri3 Fund


Key Facts

  • Investee: Grupo Vilela de Queiroz LTDA (‘GVQ’)
  • Lender: Rabobank
  • Location: Mato Grosso, Brazil
  • Transaction size: USD 6 million
  • Term: 10-year loan
  • Instrument: Maturity subordination guarantee
  • AGRI3 guarantee exposure: 40% of loan value
  • Main activities: Livestock-crop integration, forest code compliance, pastureland renovation, improved waste management and renovation of workers housing

Investee background

Grupo Vilela de Queiroz (GVQ) is a family business, owned by the Vilela de Queiroz family who run large beef cattle operations in several states of Brazil.

The core business of GVQ is the breeding, rearing and fattening of cattle for further sale.

The company integrates soy and corn production together with their livestock production for optimizing the use of land.

The company is currently developing a transition towards sustainable intensification of its cattle operations on two of their farms in Mato Grosso. GVQ does this by:

1. Increasing its cattle production without opening more land for pasture (intensification).

2. Renovating and improving the productivity of the (semi-) degraded existing pastures. GVQ intends to use Integrated Crop-Livestock (ICL) agriculture on some pasture and fertilisation on other pasture to improve the productive capacity.

Transaction description

Rabobank provided a:

USD 6 million

10 year term loan to GVQ

Supported by a 40% Maturity Subordination guarantee from AGRI3

The loan will support GVQ to transition their two farms through

Sustainable intensification of its cattle operations on the farm.

Recover degraded pastureland through livestock-crop integration and soil improvement.

Accelerate forest code compliance and support the isolation and recovery of Permanent Preserved Areas (APP’s).

Support the construction of new workers’ accommodation.

Project activities and expected impacts

Forest protection

  • The project includes the protection of 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 LR and APP targets of the Forest Code on their farms within 10 years, there will be no deforestation (even if legally permitted) and they will ensure that all leased lands are CAR registered.

Sustainable land use

  • 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.
  • GVQ will 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.
  • Manure management will be improved through pumped dispersion on the Guapore farm at feedlots to avoid contamination for animals and employees, and partially replace chemical fertilizers with treated manure.
  • Technical assistance is considered to support the development of low carbon beef to assess the GHG emission reduction from activities, compared to BAU. However, this has not yet further progressed.

Rural livelihoods

  • New anti-stress corral will be procured to facilitate animal management and thereby ensure the safety of employees engaged in daily health monitoring and related functions on the field.
  • Houses will be constructed and renovated for field workers and a new manager is hired to oversee the project.
  • Training is expected to be delivered and education will be provided for employees on sustainable practices and efficient farm management.
  • An external HR consultancy will advise on designing a profit-sharing and incentive programme 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.

Project KPIs

AGRI3 KPIs Transaction targets
Natural forest under management for protection
892 ha of APP protected through physical isolation on the Guapore Farm
1,286 ha of APP protected through physical isolation on the Corumbiara Farm
Natural forest under management for restoration objectives
1,286 ha of APP restored and replanted
Area of degraded land rehabilitated
923 ha recovered through soil improvement techniques and 2,600 ha of pastureland renovated
Increase in agricultural yield though sustainable intensification
Annual average stocking density in Animal Unit (AU)/ ha for the Guapore Farm and the Corumbiara Farm. Increase in stocking density with a target between 2.5 and 3.0 AU/ha
Agricultural area under sustainable management
Development of Low carbon beef assessment methodology
Number of participants reporting increased income, which can be disaggregated by gender and local communities for reporting purposes
% income increase to be determined on implementation of wage/incentive scheme to developed by an
external consultant
Number of farmers trained and technology transferred for best management practices in sustainable agriculture/ forest protection
30 employees trained on production techniques
Additional AGRI3 KPIs Transaction targets
Construction of new cattle management corral: for safety and welfare of employees
No specific target agreed, but confirmation required by the ATO with photographic evidence
Construction and renovation of houses for workers on the field
No specific target agreed, but confirmation required by the ATO that the constructions of the buildings are up to regulatory standards or better and photographic evidence provided