Banks finance illegal expansion of agribusiness

A survey released this Tuesday (9) by Greenpeace Brasil reveals a direct connection between financial institutions and deforestation in the Amazon. The study revealed that 798 rural properties embargoed by Ibama due to environmental crime received financing from banks between 2018 and 2022.

The report titled Banking for extinction: banks and investors as partners in deforestation explains that, between 2018 and 2023, more than R$43 million were allocated to rural properties involved in various socio-environmental irregularities in the Amazon, such as land grabbing, livestock farming in protected areas and violations of human rights.

“Financing for crimes that cut down the forest and expand agricultural production in the Amazon is not limited to resources from clandestine origins. Part of it is offered by large public and private banks that, without adequate control, direct resources to activities involved in irregularities”, he declared Cristiane Mazzetti, spokesperson for Greenpeace Brazil.

Between 2018 and 2022, they obtained rural credit in the Amazon, according to Greenpeace:

• 10,074 properties overlapping with conservation units
• 24 properties overlapping with indigenous lands;
• 21,692 properties overlapping non-designated public forests (FPND)
• 29,502 properties with deforestation in the analyzed period.
• 41 properties found in strictly protected areas, an area where there should be no economic activity, according to the National System of Nature Conservation Units (SNUC);
• 4 properties located in 7 indigenous territories

Banco do Brasil has 44% of all credit contracts in the Amazon

The data reveals that Banco do Brasil stands out as the largest rural credit operator in the Amazon, being responsible for 44% of all contracts. However, other financial institutions are also implicated, including Caixa Econômica Federal and Banco da Amazônia.

One of the cases exposed by the study is from the Arizona farm, located in Rio Branco (AC). Even with half of its area overlapping a Non-Destined Public Forest, and a history of deforestation of 420 hectares between 2016 and 2022, the owner managed to obtain more than R$16.7 million in rural credit from Brazilian public banks.

Another example mentioned by Greenpeace Brasil is the Cachoeira Dourada farm, in Pará. Fined by Ibama for illegal deforestation in 2016 and embargoed by the federal agency, the property received more than R$885,000 in financing from Banco da Amazônia in 2019.

The report also highlights the presence of farms on indigenous lands financed through rural credit. In the Uru-Eu-Wau-Wau Indigenous Land, for example, farmers obtained credit for livestock activities, contributing to illegal deforestation and the advance of pastures into indigenous territory.

Reform in the financial system

Greenpeace Brazil said that there is an urgent need for reform in the financial system, both nationally and globally. The environmental NGO defends effective measures to align financial flows with the commitments established in the Paris Agreement and the Global Biodiversity Framework, with the aim of limiting global warming and halting the loss of biodiversity.

“Nations need to take effective action to ensure the alignment of all financial flows with the commitments set out in the Paris Agreement and the Global Biodiversity Framework. We have no more time to waste, money needs to stop flowing to farms and companies that destroy the environment and fuel the multiple crises we are experiencing”, says Cristiane Mazzetti, from Greenpeace Brasil.

Editing: Thalita Pires