Abstract
In the face of growing pressure to increase agricultural production, reducing agriculture-driven legal deforestation requires thoughtful economic interventions that are attractive to individual participating landowners, but also economically viable from a long-term funding perspective. Over the past 5 years, the Amazon Environmental Research Institute (IPAM) has conceptualized, implemented, and validated CONSERV—an experimental compensation mechanism for rural landowners in Brazil who protect their surplus native vegetation. A payment program designed to combat legal deforestation was rigorously evaluated, and demonstrated its effectiveness over a 4-year pilot period. The results of this pilot add new empirical evidence to the literature on the costs of funding conservation on private properties. This paper also illustrates the potential of three business models for scaling up CONSERV, developed through a “bottom-up” approach with the involvement of the participating landowners. CONSERV offers a new development paradigm that harmonizes conservation with production, aiming to achieve truly sustainable agriculture at globally significant scale.
1 Introduction
Climate risks are driving action by countries and industries concerned with dangerous impacts to the environment and economy. As national and international laws and regulations convert this shared responsibility into specific legal obligations and economic incentives, stakeholders are reexamining institutional arrangements across all sectors of global society. This includes the agriculture sector, as commodity-driven deforestation represents a major source of global emissions (Nabuurs et al., 2022). Concerns over commodity-driven land use change drove the passage of sweeping deforestation due diligence rules currently being implemented in the European Union (EUDR-EU Deforestation Regulation). At the same time, however, some stakeholders historically have perceived agricultural production as inherently pitted against environmental protection. And as calls for forest protection grow louder from some actors, agriculturally important regions are facing demands to roll back deforestation and environmental protections instead (e.g., Mato Grosso’s recent Soy Moratorium rollback, Decree n° 1.795 from 2025 (Associated Press, 2024)).
Ironically, protecting forests benefits farming. The ecosystem services provided by areas of conserved native vegetation – like stored carbon, biodiversity preservation, and water cycling and microclimate impacts – generate local and global benefits to agricultural producers that markets generally do not fully account for Costa et al. (2019). As scientific researchers continue to articulate and quantify the value of these ecosystems, including quantifying agricultural losses caused by deforestation in monetary terms, many large producers are searching for solutions to reduce deforestation.
In this context, the CONSERV program is positioned to help to upend the long-standing but false paradigm framing tropical forest conservation goals as incompatible with goals for increased agricultural production. Between 2021 and 2024, the Amazon Environmental Research Institute (IPAM) mobilized and engaged producers from the Brazilian Amazon and Cerrado, ensuring the preservation of 20,707 hectares of native vegetation vulnerable to legal clearing (according to the Federal Law No. 12.651 on the Protection of Native Vegetation). Participating landowners received an annual payment, scaled per hectare of native vegetation preserved voluntarily (i.e., above their legal conservation requirements.) After 5 years of development and pilot implementation, the CONSERV program has built a robust conceptual framework, complemented by a successfully tested methodology, and a set of proposed pathways for scaling up, for private investors and public managers.
To design this experimental effort, IPAM collaborated with the Environmental Defense Fund (EDF) and Woodwell Climate Research Center (WCRC). These diverse partnerships resulted in the development of three business models to scale up CONSERV, as presented in more detail below. Collectively, these pathways are the product of engagement with different actors in the agricultural landscape, high-level discussions, and experimentation with producers from the Brazilian Amazon and Cerrado. Generally speaking, the models appeal to the actors in a mixed manner; for example, financial institutions can leverage the potential for generating carbon credits due to reduced emissions, while actors in the commodities chain can be interested in deforestation-free commodities or better access to credit. The concept of Conserv was introduced in a previous article (Stabile et al., 2022). This work now presents the options that proved most promising during discussions with project participants and stakeholders from the agricultural commodity supply chains associated with the properties.
Between 2020 and 2024, CONSERV was implemented in two Brazilian states (Mato Grosso and Pará) and two distinct biomes (the Amazon and the Cerrado). With a portfolio of 23 contracts covering 20,707 hectares, the program demonstrates how conservation and production can be combined, as the contracted lands are used concurrently for activities such as livestock farming and grain production. No legal deforestation occurred on the properties enrolled in the project, and the resources were used for conservation and prevention investments (against burnings and fires). To a broader explanation on the commitment period do CONSERV contracts and what happens when contracts conclude see Stabile et al. (2022). The satisfaction of the participants was documented in reports from different media outlets in the country.1 Currently, with support from Soft Commodities Forum companies, new contracts are protecting just over 7,000 hectares in the states of Mato Grosso and Maranhão.
The success of this pilot initiative provides new empirical evidence that medium and large producers in Brazil are willing to preserve and improve their lands with appropriate incentives, in the context of a reliable and adequate relationship. Moreover, the willingness of CONSERV’s farmers to participate in this program suggests that these farmers do not view the opportunity cost of this relationship as equivalent to the full value of potential production revenues under an alternative land use decision. This critical insight stands in contrast to findings of previous studies (Chagas and Andrade, 2013; EMBRAPA, 2024; Igari et al., 2009; Machado et al., 2016; Silva et al., 2019; Wingert and Silva, 2023).
This paper provides several business models for understanding both the context and mentality of agricultural producers in the region where CONSERV’s pilot was conducted, and how landowners may think about production decisions and forest conservation. These models can serve as practical tools for stakeholders seeking to foster a new approach to agriculture, or a New Green Revolution, where preservation and the supply of ecosystem services are part of the equation. Since landowners are pivotal actors in that practice, their examination of the business models during the project execution represents an accurate examination of their plausibility. Finally, the paper presents several potential financial mechanisms under consideration for scaling CONSERV, with illustrative quantitative analysis to complement discussion of how these pathways are perceived by potential participants and supporters.
2 A new green revolution: understanding agriculture in Western Brazil
The Western part of Brazil received a lot of attention in the second half of the 20th century. The founding of the new capital, Brasilia, was an inflexion point in the central government’s approach to territorial management. In just 50 years, the Brazilian economy shifted from a net importer of agricultural commodities to a net exporter (Ferreira et al., 2024). The driving force behind this vertiginous change was an urgency to occupy and develop the West (Klein and Luna, 2023).
The initial strategy to open the West was framed in three phases: first, expanding cattle operations to signify occupation of the territory; followed by the soy cultivation, to generate wealth; third, development, because of growth in Gross Domestic Product (GDP). Pollution, the presence/resistance of original and traditional peoples, and social inequality, were not part of the equation. This model of thinking was promoted and supported by the government of this period, especially when the scientific contribution was applied to adapt the soil to agriculture (Boaventura et al., 2023).
Brazilian agriculture, before the 20th century, was originally centered in the coastal Northeast (Dean, 2021). Following the coastal settlement, production moved to the South and spread over the South and Southeast. The biomes where this early production took place were the Atlantic Rainforest and Pampa. The later movement to the West required a shift to the distinctives Amazon and Cerrado biomes; it therefore also required adaptation to a new ecological paradigm of low-fertility tropical soils. Science played a crucial role in facilitating the adaptation of agriculture to this new reality. The condition was different, but the model of development via agricultural industrialization was the same (Akerman et al., 2025; Cabral et al., 2025).
Today, the Cerrado is a central hub of agricultural production in Brazil, parts of the Amazon are under pressure, and the country is a global leader and productivity reference point in the sector. But this leadership position makes questions about future success more urgent: the world climate is changing, and the environmental conditions to which Western agricultural actors initially adapted their techniques are now changing as well (Rattis et al., 2021).
These considerations (changes in productivity and climate) impact both reality and perception of the opportunity cost of land (Basso et al., 2024; Rattis et al., 2021). On a first order examination, the current price of land or levels of productive output provide information about expected future value. A more detailed analysis, such as the land value characterization developed by INCRA (National Institute of Colonization and Agrarian Reform/ Instituto Nacional de Colonização e Reforma Agrária) is a good tool to understand the dynamics of regional opportunity costs.
The segmentation of markets by region (INCRA, 2024) is a very useful tool to understand the dynamics of land prices in the Legal Amazon, as well as potential willingness of producers to place land under conservation as opposed to other uses. These factors, as well as factors such as prices of farm land leases, should be understood as key context and background to support relationship building and negotiations with landowners in these regions.
2.1 Understanding regional landowner thinking
At the beginning of the 1930s, the Brazilian Government mobilized significant resources to draw agriculturalists to the Interior portions of the Amazon and Cerrado regions. The Central Government directed new resources to this new frontier through different initiatives, providing both economic and social encouragement for internal colonization. The demographic shifts incentivized by this policy (particularly the movement of farmers of European and Asian descent into the central west of the country, previously dominated by Indigenous and Traditional communities) are a remarkable chapter in the recent history of Brazil’s internal migrations (Dutra e Silva, 2020; Silva, 2018).
Per the federal government’s framing, the pioneers were recruited to dominate and develop Brazil’s interior territory (Dutra e Silva, 2020). The effort was promoted as an act of control over nature, and was expected to generate significant wealth for those who succeeded. In line with this, many of the most financially successful participants in this effort share characteristics of a pioneer mentality, meaning they are driven by a sense of mission to face challenging conditions in a new landscape (Dutra e Silva, 2017).
However, the development of a new agricultural frontier across the “green desert” of the Amazon/Cerrado (perceived under the central government’s development framework as ‘wasted’ land inhospitable to farming (Dutra e Silva, 2017)) was facilitated by collaborative scientific developments leading to new agricultural techniques, such as the treatment of acidic Cerrado soils to enable large-scale grain production (Boaventura et al., 2023). Consequently, the application of science to agricultural problem-solving, and the idea of sustainability, are familiar topics for many of the producers in these regions (Gomes et al., 2023). So while the “green desert” is still a powerful cultural image in these regions (Dutra e Silva, 2017), a science-based discussion is a useful starting point for conversations with landowners about making important changes to production practices.
The notion of the New Green Revolution varies across geographies, but scholars of this idea agree that it refers to a conception of science as the engine of a transition toward a more sustainable global agriculture paradigm (Holt-Giménez and Altieri, 2012; Martin-Guay et al., 2018; Patel, 2013). While the push to transition toward new practices should better account for the cumulative impacts of unchecked conversion of land or ecosystem damage at global scales, this shift in practices and technologies is also expected to have a cost – the magnitude of which is not well understood at the farm level. Understanding the impacts of changing production techniques – including avoiding deforestation where it is otherwise legally allowed – requires understanding the financial, social, and other implications of these changes for individual farmers, operating on diverse sizes and types of properties.
Global markets do not yet fully reflect the crucial role that biodiversity and microclimate stability play in wealth creation. Brazil is a leading country in terms of agricultural production, but also is a pivotal region to global biodiversity and climate stability (Reid and Lovejoy, 2022). Despite its position in those vital issues, the inequality between countries continues to block a more life-effective allocation of financial resources (Gilchrist et al., 2021).
The growing demand from investors for strategies linked to Environmental, Social, and Governance (ESG) issues accelerated during the Coronavirus pandemic. ESG strategies outperformed traditional strategies, meaning it is a pragmatic issue of seeking higher long-term returns (Gao and Geng, 2024). That strong performance, compared to traditional portfolios, acted as a catalyst for the increasing demand for so-called green bonds. The effort to outline long-term strategies helps explain the good performance of these assets, as explanations focusing solely on rising costs (of energy) as the main component are insufficient.
This transformation requires long-term investment in three different ways: the shift in production models, the relationships that producers seek, and in the perspectives that are currently lacking in the business environment. In other words, institutionalizing this new approach must involve governments, companies, producers, and consumers in a collaborative, multi-stakeholder framework. This multi-factor approach is consistent with prior research on how producers weigh the costs and benefits of preservation (Gomes et al., 2023), and on the complexity of efforts to halt legal deforestation in Brazil.
3 Models for monetizing forest asset conservation at scale
CONSERV is a private financial mechanism that incentivizes rural landowners to maintain areas of vegetation that are not legally protected from deforestation. CONSERV works with these participating landowner partners to identify and monitor these areas (both on-site and via satellite), who then receive semi-annual payments for their conserved hectares. The funding for this operation came from NICFI (Norway’s International Climate and Forest Initiative) and the Kingdom of the Netherlands. The payment amounts are determined based on factors including the deforestation risk (β ‘risk’) to the conserved areas (areas referred to as “forest assets”), the potential value of these assets’ environmental services (Δ ‘pes’), and the cost of land (CL). The differences in the CL closely follow the patterns shown in Figure 1. So, the general equation is:
Figure 1
Where β and Δ are, not fixed, fractions of CL.
The prices for β (risk) and Δ (environmental services) components are determined by their relative contribution to conservation. β (risk) is derived from a Bayesian process that produces a value between zero and one, where one represents the highest risk. Δ (environmental services) considers carbon stocks (according to the National Inventory). Both values are ranked from highest to lowest, reflecting their respective contributions. The prices are below the opportunity cost of forgoing production on the contracted area, this critical insight stands in contrast to findings of previous studies (Chagas and Andrade, 2013; EMBRAPA, 2024; Igari et al., 2009; Machado et al., 2016; Silva et al., 2019; Wingert and Silva, 2023).
The business models, developed over the 5 years of CONSERV’s operation, are frameworks for potential pathways toward scaling up funding to incentivize additional producers to go beyond what is established by Brazil’s forest conservation legislation. In their specific biome, CONSERV producers who are willing to commit to landscape conservation can receive social recognition of this effort in the form of a monetary reward for the positive externality generated by their actions. In this sense, CONSERV also serves as a mechanism for correcting a market failure, in which the at-scale value of conserving native vegetation is undervalued (as argued by, e.g., Costa et al., 2019).
The funding models were developed on two levels: theoretical and participatory. Theoretical development involved discussions among researchers and specialists from different fields to identify plausible sources and rationales for scaled-up funding flows from various sectors. The second aspect of design included consultations with participants from the envisioned supply chains (financial institutions, commodity traders, carbon market operators, consumer and producer associations) to understand the potential and challenges of each mechanism.
For each of the three mechanism types, we explain below the underlying rationale, expected limitations or challenges, and some illustrative diagrams to contextualize the potential scale of costs and benefits of each mechanism as a pathway to support CONSERV. A business model combining elements of these three mechanism types, as discussed in 3.4, may create financial resilience for the program.
3.1 Leveraging forest carbon values: the carbon credit model
Carbon markets based on forest and native vegetation stocks represent a mechanism for funding conservation of ecosystems in the Cerrado and Amazon. Under this framework, payments are provided in exchange for protection or enhancement of carbon stocks in native vegetation. Brazil has seen rapid growth of forest-based carbon crediting efforts based on both independent projects and coordinated jurisdictional-scale conservation efforts, in the context of both voluntary and compliance markets (BNDES, 2024). These efforts are generating growing urgency for the establishment of clear federal and state legal frameworks to provide greater transparency and security for the operations of the actors involved, as well as to ensure integrity in national and global carbon accounting under the evolving framework of the Paris Agreement (Silva and Vieira, 2025).
CONSERV protects forests otherwise legally at risk of deforestation; buyers of carbon credits would effectively pay for this reduction of likely GHG emissions, in exchange for the right to make claims about their support of GHG impacts (with the type of potentially allowable claim determined by the type of credits issued under voluntary market or compliance market frameworks, and rules regarding high-integrity use of these credits.) The potential volume of funding available to CONSERV from this source would depend on a variety of factors including the carbon stocks of forest assets of participating farms, and evolving carbon market prices. To ensure high-quality credit issuances, CONSERV would also need to nest its carbon accounting within Mato Grosso’s and Brazil’s federal jurisdictional carbon crediting approaches, whether under a central or decentralized framework. Success may therefore be linked to the success of these other programs, and related policy and environmental enforcement efforts (Abakah et al., 2025; Fu et al., 2023).
In implementing CONSERV, taxes were not a difficult, since the donations that financed it enjoy benefits when compared to commercial or industrial activities. The lack of definition regarding the tax profile of some green finance alternatives, such as carbon markets, makes it difficult to develop projections.
Preliminary calculations estimating the amount of avoided deforestation attributable to CONSERV (in the context of Mato Grosso’s under-development credit submission to ART-TREES) suggest that a nontrivial portion of CONSERV’s funding could be covered by carbon credit sales, assuming widespread recruitment and long-term participation in the program. Using historic data from PRODES to estimate crediting volumes likely for Mato Grosso (MT) state under the ART-TREEs standard, and legal-vs.-illegal deforestation percentages in the state from Instituto Centro de Vida, we estimate a rough baseline rate of expected legal deforestation across the state of ~3%/year (or less). Using this estimate suggests that a scale-up of CONSERV to protect nearly all of Mato Grosso’s forest assets (~3.1 Mha) by 2030 might only be eligible to receive on the order of one tenth of MT’s potential credit revenues, though many uncertainties in credit volume calculations and approaches underlie this estimate. Using an illustrative carbon price series (rising from USD$10/ton to USD$20/ton between 2024 and 2030), and an illustrative per-hectare payment range between R$200/ha/year and R$800/ha/year, this attributable credit volume might provide only 11–46% of modeled per-hectare payment funds needed between 2024 and 2030.
Barring a significantly higher price for CONSERV’s carbon credits, these calculations suggest it is unlikely that CONSERV’s full costs, including additional operations and transaction costs, could be covered by crediting alone. However, if prices do rise significantly (as recently signed Jurisdictional REDD+ − JREDD+ purchase agreements with prices closer to $15/ton suggest is possible), CONSERV could stand to benefit significantly from including this type of funding source in its portfolio. This mechanism is therefore suggested as a valuable complement to other revenue streams to support resilience.
Discussions with CONSERV participants suggest that the long-term nature of contracts aiming to ensure carbon credit permanence, and transparency in measuring greenhouse gas stocks, are the aspects of this funding approach that producers view with the most caution. Contracts requiring farmers to commit to activities and land use changes across four decades seem fraught with uncertainties, and at odds with their ability to make reliable estimates concerning needs around future agricultural activities. There are also concerns about the viability of carbon credits in the Cerrado Biome regions of Brazil, since this ecosystem’s potential GHG value (largely in soils) is not captured well by crediting methodologies that focus only on the carbon value of aboveground vegetation (Englund et al., 2017). The REDD+ (Reducing Emissions from Deforestation and Forest Degradation) and restoration projects are much more attractive to the Amazon Biome (Terra et al., 2023).
The current methodologies and standards for GHG credit programs find some opportunities when their analysis is based on the flux, instead of stocks. Deforestation risk, and historical rates of deforestation are some of the approaches that could work, if the opportunity cost to producers is covered.
3.2 Leveraging demand for climate-responsible supply chains: the commodities sector models
A new standard of relationship with the ecosystem has been emerging in recent decades as the link between forest loss and climate change has become more clear. Consumers and societies are increasingly willing to recognize institutions that make efforts to modify or offset the “ecological footprint” of their activities. While policy changes may be necessary to drive real market change (Mazzucato, 2014), such policies are beginning to come into existence. A prominent example of this is the EU Deforestation Regulation, which requires that importers eliminate the deforestation footprint of 7 key commodities sold into Europe (including important Brazilian export commodities like soy, beef, and chocolate). While some details of implementation of this law remain to be seen, CONSERV could position itself to play a key role in enabling Brazil’s commodity traders and other supply chain actors to navigate the law’s challenging requirements around transparency and retain the ability to sell to the European market.
Funding on this basis could take the form of either (or both) pre-competitive funding from self-interested commodity traders seeking to preserve market access and reduce climate impacts, or post-competitive funding in the form of price premiums for agricultural products differentiated by CONSERV’s producer’s zero-deforestation practices (and certified accordingly). We provide calculations illustrating the potential scale of each option below.
Pre-competitive funding could take the form of a small contribution of revenues by the majority of large trading companies, such as those that have expressed interest in reducing Brazilian deforestation through channels like the Soft Commodities Forum. Illustrative calculations using the 2023 gross production value of Mato Grosso’s main four agricultural commodities (soy, beef, corn, and cotton, together accounting for 92% of MT’s R$173 billion total gross) show that an annual contribution of 0.39–1.54% of this gross value could fund annual payments of between R$200/ha and R$800/ha for 3.1Mha of forest asset conservation. Given that these percentages are well within range of the average annual variation in MT soy and beef commodity prices over the past decade, a net revenue change of this size would be expected to fit comfortably into typical expectations of annual revenue variability for large multinational commodity companies. A time-bound series of annual sectoral contributions (from 2024 to 2030) from 1 to 4% of gross production value per year (using the Mato Grosso Institute of Agricultural Economics-IMEA’s forecast prices to 2030) could capitalize an interest-bearing fund able to support the same 3.1Mha of annual per-ha payments between R$200 and R$800 by 2030 in perpetuity, assuming 5% annual interest and IMEA’s forecasted price series for soy and beef through 2030. This same size of fund could also be capitalized instead with a one-time contribution of between 8 and 30% of the 2023 4-crop sector gross. The framework of opportunity cost applies primarily to medium and large-scale farms. Based on our discussions with supply chain stakeholders, the small farms, with their distinct economic structure, necessitate a different approach: besides payment, one that incorporates elements such as technical support and food security considerations.
In the case of time-bound annual contributions from the sector, partial reinvestment of the interest from this fund in early years before 2030 could reduce the size of needed contributions overall; this is optimized when the reinvestment starts high and declines to 0% by 2030 as more farms are enrolled in CONSERV. Such reinvestment of fund interest could also help to balance out a slow ramp-up of annual contribution size, if companies were recruited to the effort over time instead of starting payments all at once. Using interest as payment, the fund could be administered by a joint board with representatives of society including farmers, local communities, universities and government.
Enabling the state-wide success of CONSERV could be leveraged into tangible market benefits to the sector, if CONSERV were scaled in a manner that enabled these companies to meet the emerging market access requirements in the EU. Given the expectation of challenging transparency and traceability requirements–including the expected requirement for segregated supply chain infrastructure–it might be easier for companies to meet and monitor these requirements at a jurisdictional scale, by quickly expanding CONSERV to include the vast majority of MT farms (or focusing the scale-up to include whole municipalities at a time). While rapid whole-jurisdiction scaleup in Mato Grosso would come with logistical challenges, this effort to act cooperatively could allow the whole jurisdiction to achieve meaningful deforestation avoidance, benefiting all farmers and traders.
Success in scaling up CONSERV would in turn distinguish CONSERV’s agricultural products on the global market, and secure access to markets like the EU that are starting to require demonstrable avoidance of land conversion. This accomplishment could be reasonably expected to earn a price premium, which could further offset the long-term costs of operating CONSERV, or even provide a return to the program and its investors. Based on IMEA’s data estimating per-hectare productivity, per-unit prices, and per-hectare production costs for the 4 largest crops in Mato Grosso in 2019–2021, we estimate that an average price premium of between 2.3 and 9.1% could fully cover per-hectare annual payments of between R$200 and R$800 across 3.1Mha of forest assets on MT’s private farms; prices fall within the range of R$200–R$800 due to variations in the opportunity cost of land.2
Based on conversations with both CONSERV’s participants and companies potentially interested in supporting CONSERV, a generational shift is driving increased recognition among potential program partners of the need to incorporate sustainability practices like CONSERV into business portfolios and institutional strategies. While those outside of this shift group may be more skeptical of the inherent value of corporate sustainability efforts, there is nonetheless also a growing understanding of the material risk of failing to align with growing global demands for these changes, solidifying in societies across all regions of the globe (Kim and Lee, 2023; Mariani and Borghi, 2023). Environmental, social, and governance (ESG) responsibility has become a fundamental requirement for institutions seeking to attract and retain resources in the current landscape—although monetizing it remains an unfinished effort. CONSERV could provide a simple scheme to meet these growing legal and consumer demands, and leverage them to ensure market access and captured value for farmers, commodity traders, and other program supporters.
3.3 Leveraging climate risk resilience: the sustainable credit model
Incorporating climate risks into financial portfolio management is a critical but newly developing area of work. Scientific studies over the last decade have begun to quantify the scale of negative impacts from deforestation and cleared native vegetation to the long-term resiliency of Brazilian agriculture, raising the alarm in MT and elsewhere (Costa et al., 2019). Protecting the remaining forest landscapes should be expected to have benefits to the financial returns of the region’s farmers and lenders, in that conservation would reduce the potential for additional crop productivity losses (Flach et al., 2021). This tangible ecosystem services value of conservation could be leveraged as a financial incentive for landowners and lenders–if they are aware of the risk they face, and if they are legally able to make changes to respond to it accordingly.
Brazil’s agricultural lending space is notoriously complex (Assunção and Souza, 2018; World Bank Group, 2020). The landscape of rural credit options includes loans mandated by law (so-called directed resource lending), which include some low-interest-rate lending programs aimed at supporting the adoption of sustainable practices (such as the ABC + program.) However, availability and uptake of these mandatory lending programs have not historically met the scale of Brazil’s climate challenges, nor are these agriculture loans typically made contingent upon a commitment to avoid deforestation (Lopes and Lowery, 2015). This model proposes to compensate CONSERV participants for protecting their legally vulnerable forests by providing access to discounted lending, a mechanism which could take a variety of forms. The team examined both a direct reduction in interest rate of a loan already accessible to the participant (a “discount rider”), and access to a special CONSERV lending program, potentially cross-subsidized by small increases to the rates offered to non-CONSERV participants. In conversations with producers, we arrived at the assumption that access to these discounted credit lines would take the place of direct per-hectare payments to farmers, as they would ideally provide both an indirect payment (via reduced operating costs) and a tangible long-term financial benefit (by enabling participating farms to shift toward sustainable intensification and other beneficial practices they might be hesitant to risk adopting). These investments would ideally increase the farm’s overall profits in the long term, while reducing the pressure for future deforestation in the process.
The challenges of this model involve both the quantification of future climate risk to individual farms and financial institutions, and the difficulty of enacting potential changes to the complex laws, regulations, and accepted norms that govern actions in the lending market. For example, a financial institution voluntarily converting a large number of loans to a sub-market rate of return, even on the premise of reducing their future financial risk, could face challenges related to the perceived violation of the institution’s near-term fiduciary duties to shareholders. However, there may be potential for existing government lending programs to be expanded and modified to add new incentives specifically for CONSERV participants. Subsidies to cover the lost return on investment for these loans (whether as direct grants or capital from philanthropic sources, or perhaps even exchanges of carbon credits as an investment vehicle) could also help for-profit financial institutions compensate for lost returns from lowering interest rates for enrolled producers, if a non-profit loan administrator could not be recruited or developed.
On the farm level, producers who joined CONSERV’s pilot program have validated the idea of credit lines with favorable interest rates or terms as a potential option for participant compensation. On the whole-program level, other private and public actors have expressed interest in programs to help farmers transition toward sustainable practices, including commodity traders who have articulated the need for new incentives to support conservation as well. As discussed in the final section, a blended finance approach could leverage the support of public, private, and philanthropic actors to provide the capital needed to support this model.
3.4 A holistic strategy for positioning CONSERV
CONSERV is a simple, flexible mechanism (Stabile et al., 2022) which could position itself in a variety of ways to meet the needs and concerns of potential participating and funding partners. Combining some or all of the mechanisms discussed above could in turn create a flexible and resilient program able to scale as quickly as new participants can be vetted and enrolled. The Figure 2 illustrates how the variety of mechanisms discussed in previous sections could be linked together with other resources and support from regional actors to create a resilient financial framework for CONSERV’s development, providing benefits for farms and other program partners alike.
Figure 2
The financial support of commodity sector actors, especially the pre-competitive payment mechanisms, may provide the most direct pathway to capitalizing a fund that could support CONSERV’s near-term scale-up and long-term development through diverse means. By temporarily diverting a small percentage of revenues–an amount that falls well within expected normal annual fluctuations due to price variability–the sector’s actors could preemptively protect their own global market access, while investing directly in future climate resilience by stemming the loss of critical native vegetation. These funds and the interest they would generate could support per-hectare conservation payments for a rapidly expanding cohort of enrolling farmers joining CONSERV; such a fund could also provide a capital base for sustainable intensification loans in exchange for longer-term conservation agreements. The expected return for these companies on this “investment” in CONSERV would potentially include both a short-term pathway to legal compliance and market differentiation, and improved long-term resilience of agriculture in the regions where CONSERV is implemented and native vegetation is preserved.
In Mato Grosso, the Produce Conserve Include Strategy calls for the expansion of technical assistance to farms and rural communities, as part of promoting sustainable intensification and social inclusion. In addition to any programs for technical assistance that the state or federal government may establish, there are currently other philanthropic programs emerging that are exploring sustainable lending models and support for intensification in the region. If strategic alliances can be built among these other programs, CONSERV might position itself as a point of entry to a broader landscape of forest asset conservation support – recruiting farmers quickly to halt legal deforestation with initial per-ha payment incentives, then helping place participating farmers into the long-term sustainable credit program or other enduring conservation option that best meets their unique needs.
4 Final considerations
The importance of Brazilian agriculture to the country’s economy draws heightened attention and interest from various social actors regarding its resilience capacity. It is essential to be creative in seeking solutions that create a real positive impact on productive structures while also remaining attractive investment options for capital in search of appreciation. For this reason, the combination of production and conservation must be grounded in empirical experiences that involve producers from conception to implementation of these solutions.
According to Brazilian law, properties may only clear a portion of their vegetation. The government has various mechanisms to curb deforestation that violates this law, but lacks instruments to address changes in land use and cover that occur within legal bounds. For this reason, Conserv is a pioneering alternative and represents additionality in the Brazilian context. In this sense, the persistence of vegetation that could legally be cleared is tied to the financial incentive for its preservation, as the pressure to allocate it to other (profitable) uses does not cease. Furthermore, the monitoring system developed in the Project allows for controlling the risk of leakage, given the contractual commitment to conservation.
The three business models presented were validated by producers as potentially feasible. However, the willingness of these producers to adopt new scientific-based approaches relies in part on the ability to build a long-term relationship with institutions like CONSERV, based on trust. Another very important lesson was that the opportunity cost based on market information alone appears to underestimate the motivations of such producers, who generally recognize that they live in an agricultural landscape made possible by science and technology. While individual motivations and circumstances will vary, producers may be more willing to participate in a program like CONSERV than traditional economic views of opportunity cost alone might suggest. These findings align with other recent evidence of farmer attitudes around native vegetation conservation, payments for ecosystem services, and access to sustainable loans, for example from states such as Mato Grosso do Sul (Borges and Falcette, 2024).
The CONSERV pilot experience provides grounding for a previously blue-sky concept to avoid legal deforestation in the most productive agricultural region of Brazil. The producers became partners in a relationship of trust with an NGO that helped to materialize a tangible program; this program recognized and rewarded their wish and effort to preserve the vegetation that can be legally deforested. We are living in a transitional period in which institutions at all levels are reimagining their future within a low-carbon economy. This is the new foundational reality upon which societies must plan and act. For this reason, there is a growing interest in innovative financial products, resilient production strategies, and dynamic ways to estimate and compensate the value of environmental services (no longer viewed as infinite and inexhaustible). CONSERV offers a flexible pathway toward meeting these emerging needs.
Statements
Data availability statement
The original contributions presented in the study are included in the article/supplementary material, further inquiries can be directed to the corresponding author.
Author contributions
ÁB: Writing – original draft, Writing – review & editing. AGu: Writing – review & editing. CG: Writing – review & editing. AGa: Writing – review & editing. GC: Writing – review & editing. LS: Writing – review & editing. BP: Writing – review & editing.
Funding
The author(s) declared that financial support was received for this work and/or its publication. We would like to acknowledge the financial support from Norway’s International Climate and Forest Initiative (NICFI) through grant BRA-19/0009 and from the Ministry of Foreign Affairs from the Netherlands through the grant 4000003512, for making the research possible. The authors also acknowledge the financial support from the Farmer First Cluster (FFC) initiative, led by the Soft Commodities Forum (SCF) in partnership with the WBCSD (World Business Council for Sustainable Development), for making this publication possible.
Acknowledgments
We would like to thank other current and former staff members from IPAM who contributed in the conceptualization of CONSERV and who contributed to the early stage of this work.
Conflict of interest
The author(s) declared that this work was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.
Generative AI statement
The author(s) declared that Generative AI was not used in the creation of this manuscript.
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All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher.
Footnotes
1.^For exemple: https://www1.folha.uol.com.br/ambiente/2025/08/apos-projeto-de-ong-proprietarios-rurais-conservam-vegetacao-nativa-alem-da-obrigacao-legal.shtml; https://www.canalrural.com.br/agricultura/produtores-mantem-areas-preservadas-mesmo-apos-fim-de-pagamentos-do-projeto-conserv/; https://ciclovivo.com.br/inovacao/inspiracao/produtores-rurais-mantem-conservacao-mesmo-sem-pagamento/.
2.^This calculation assumes that the area of forest assets receiving payments is just less than the area of producing land on enrolled farms across CONSERV’s portfolio, which MT spatial data suggests is realistic; for simplifying purposes we also assume all farms are producing one of MT’s 4 major crops, proportional to gross production value share.
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Summary
Keywords
avoided deforestation, conservation, ecological transition, green finance, innovative finance, Legal Amazon, sustainable agriculture
Citation
Batista ÁM, Guimarães AL, Gerbode C, Garcia AS, de Castro Oliveira G, de Sousa LVF and Pietracci B (2026) CONSERV: financial mechanisms to avoid legal deforestation and promote sustainable agriculture in Brazil. Front. For. Glob. Change 9:1715607. doi: 10.3389/ffgc.2026.1715607
Received
29 September 2025
Revised
07 January 2026
Accepted
18 February 2026
Published
27 February 2026
Volume
9 - 2026
Edited by
Matthew Chidozie Ogwu, Appalachian State University, United States
Reviewed by
Sebastian Mayr, University of Freiburg, Germany
Rafael Barty Dextro, University of São Paulo, Brazil
Updates
Copyright
© 2026 Batista, Guimarães, Gerbode, Garcia, de Castro Oliveira, de Sousa and Pietracci.
This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
*Correspondence: Álvaro Maia Batista, alvaro.batista@ipam.org.br
Disclaimer
All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.