FRA agrees that Brazil Regulations could boost Agricultural investment

Business Monitor International (BMI) has predicted that investment in forestry and agriculture in the Amazon region will be boosted as a result of the new forestry regulations giving people more control over land rights.

Brazil is one of the largest producers of soybeans and cattle in the world and the controversial new rights handed to land owners will make these areas of agriculture more attractive as investment options. This is according to international researchers at BMI whose view is also backed by Forestry Research Associates (FRA), a research and analysis consultancy specializing in forestry investment.

FRA’s analysis partner, Peter Collins, said, ”These new regulations have come at a time when the demand for beef and soy are growing in emerging markets. The regulations mean that more land could be given over to these agricultural activities, which is bound to attract more investment in to the region.”

However, FRA is keen to promote a more sustainable option of investing in non-native forestry plantations in the Amazon region. These plantations, run by firms like Greenwood Management, involve focusing on fast-growing species that are not native to the region. As a result, timber products from these species are more sustainable alternative to the wood from the natural rainforests, which are vulnerable.

“Managing forestry sustainably is something we support,” claimed Mr Collins, who added, “Investing in these plantations, investors can cash in on the growth in demand for raw materials from emerging markets without contributing to the degradation of the region’s rainforests."

There has recently been pressure on Brazilian pressure Dilma Rousseff to veto some of the new provisions, which could lead to a reducing in the farmers’ ability to expand the amount of land given over to agriculture. There continues to be people in favor of the new regulations and those against, the latter of which claim that the regulations will undo all the good work that has been done to reduce deforestation.