Conservation Agriculture can Help Feed the World

Crops are left to break down into new soil_11zon

Benefits include fewer emissions, fewer chemicals, better yields, healthier food  

•  A new project in Brazil will direct loans to small and medium-sized farmers who practice no-till farming and other conservation agriculture methods. 

  It’s not as simple as ditching the plow – it’s about using a variety of methods to ensure healthy soil that captures and holds more carbon dioxide. 

  One Brazilian farmer increased crop yields by 50 percent and decreased herbicide use by 60 percent. 

GUAÍRA, Brazil – Maira Lelis pulls a soybean plant from her field. She shakes off a handful of purple-brown soil and gazes admiringly at the plant. But it’s not the rich green leaves or the delicate lavender flowers that attract her attention. “Look at these roots!” she says. 

For Lelis, the roots and the soil are key to the health of her fields, the health of the food they produce, and ultimately the health of our planet. Better yet, she has seen her crop yields increase by 50 percent since fully implementing conservation agriculture practices eight years ago. And she’s been able to reduce herbicide use by 60 percent and access new markets for her produce. 

A World Bank Group Guarantee Platform project aims to help small and medium-sized farmers all over Brazil replicate Lelis’ sustainability success story. The project provided $1.2 billion in guarantees to four banks for loans to the state-owned Banco do Brasil. Banco do Brasil in turn will give short-term revolving loans of up to $2 million to farmers who use conservation agriculture, including no-till farming and other climate-friendly techniques. 

What are those techniques? The most basic, already in use by two-thirds of Brazilian farmers, is no-till farming, where the soil is not plowed and seeds and fertilizer are applied directly on the surface. But fewer than 27 percent of the country’s farmers fully implement conservation agriculture, which also includes cover crops and crop rotation. 

Agriculture is responsible for the largest portion of Brazil’s greenhouse gas emissions – 38 percent. There are many climate benefits to conservation agriculture: Leaving the soil undisturbed prevents the release of carbon dioxide and requires less fossil fuel-powered machinery. The continuous soil cover reduces erosion and protects the soil from high temperatures and moisture loss. Crop rotation maintains soil mulch and enhances the drought-resilience of crops and soils by distributing water use across the growing season. No-till farming also reduces water consumption. 

Just as all parts of the agricultural ecosystem come together to produce a healthy crop, the guarantee project came together thanks to an ecosystem of financial players. Four large banks – JPMorgan Chase, Standard Chartered, HSBC, and Crédit Agricole – extended a loan to Banco do Brasil that was guaranteed by the Multilateral Investment Guarantee Agency (MIGA), which houses the World Bank Group Guarantee Platform. MIGA then ceded some of the risk to reinsurers at Lloyd’s and elsewhere, preserving its capital for future deals.  

“We are very proud of this project, which is the first MIGA-covered loan that is compliant with the Green Loan Principles, making it a Green Loan for the lenders and Banco do Brasil,” said Ariane Di Iorio, MIGA’s Director for Financial Institutions. “Additionally, this is MIGA’s first transaction in Brazil since 2013, and MIGA’s first conservation agriculture project.” 

“The deal helps Banco do Brasil with its plans to support more low-carbon farming and the sustainable supply of crops for local communities,” said Faheen Allibhoy, global head of Multilateral Development Banks at J.P. Morgan. “This MIGA financing is key to support Banco do Brasil’s sustainability plan to promote good agricultural practices and low-carbon agriculture and showcases our commitment to Brazil and its leading agricultural sector.” 

To a farmer in Brazil, what matters is that they’ll be able to grow a bigger and better crop. Being sustainable has other benefits, too. Fazenda Santa Helena is being certified by the Round Table on Responsible Soy so they can sell their soybeans in the highly regulated European Union market.   

“We are feeding the world and caring for the environment,” Lelis says. - World Bank Newsletter