Company aims to expand its program area to 600,000 hectares and engage customers in Brazil
04/15/2024
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Rossano de Angelis — Foto: Divulgação
Bunge is set to enhance its regenerative agriculture program in Brazil, introduced a year ago. With a $20 million investment, the Missouri-based conglomerate intends to more than double the current area under the program from 250,000 hectares to 600,000 hectares by 2026.
Although this expansion marks a significant leap within a year, it still represents just a fraction of the total agricultural area Bunge sources from in Brazil, with the soybean area mapped by the company in 2022 alone surpassing 19 million hectares.
The funds will be allocated to award premiums to participating farmers and supply products to Bunge. Additionally, the investment will support the provision of technical assistance, precision agriculture tools, and measurement technologies at no cost, aiming to assist producers in adopting methods that contribute to emission reduction in agriculture. This support will be offered through Orígeo, a joint venture of Bunge and UPL.
At this phase, Bunge is also keen on involving its customers from the food and biofuel sectors, proposing that these industries also offer premiums to the producers. According to Rossano de Angelis Junior, Bunge’s vice president of agribusiness for South America, there’s a growing interest within the agro-industry to establish direct connections with farmers, and some contracts with clients have already been finalized.
The program does not require producers to sell their entire harvest to Bunge unless it involves an industry client of Bunge that is financing the farm. If a producer opts to sell a portion of their harvest to Bunge, the company will compensate them with a premium for that portion, based on a fixed rate per hectare, though the specific amount has not been disclosed.
Moreover, Bunge plans to broaden the geographical reach of the program currently concentrated in the Matopiba area (the region encompassing the Brazilian states of Maranhão, Tocantins, Piauí, and Bahia) and in Mato Grosso to include producers in Pará, Goiás, São Paulo, Paraná, and Rio Grande do Sul.
In its first year, the program has attracted 34 farms from 26 producers. The most embraced regenerative technique among them is no-till farming, followed by the use of cover crops during the off-season to protect the soil, with 46% adoption. Although other regenerative practices are less common, such as bio-inputs, crop rotation, and natural fertilization, Bunge is focusing on promoting these five practices at this stage for their scalability and customer engagement potential. The program may also support additional techniques like crop-forest-pasture integration, pasture rotation, and reduced water and energy use on farms.
A specific initiative Bunge is exploring involves using oilseeds as cover crops, potentially opening new revenue streams for producers and catering to the demand from advanced biofuel industries, such as aviation biofuel (sustainable aviation fuel, SAF) and green diesel (hydrotreated vegetable oil, HVO). In collaboration with Embrapa, Orígeo, and UPL’s Advanta, the company is studying the viability of growing canola as a cover crop in the Cerrado—a vast tropical savanna region of Brazil—for these industries. “With adequate solutions and assistance, we believe there’s potential for canola cultivation in the Cerrado,” stated Mr. de Angelis. The program anticipates its first canola harvest this year, with seed selection tailored to each farm’s specific conditions, he added.
*Por Camila Souza Ramos — São Paulo
Source: Valor International