Brazil Banks Enlist to Combat Deforestation
Brazil is enlisting bank managers to combat deforestation by enforcing new rules for rural credit applicants. Banks must check for deforestation on farms using satellite data. If deforestation permits are missing since 2019, government-funded loans may be denied. The rule impacts Brazil's agribusiness sector and could influence upcoming elections.
In a bold move to battle deforestation, Brazil is turning to an unlikely ally: bank managers. Under a new policy effective Wednesday, banks are required to verify if applicants for rural loans have any deforestation on their farms. This is achieved using government tools and satellite data.
If deforestation is detected on Brazilian farms post-2019, applicants must provide proof of deforestation permits to secure government-funded credit. The initiative, hailed by environmental advocates, marks a strategic pivot in Brazil's attempt to curb rampant deforestation in the Amazon.
The new regulation, however, faces resistance from Brazil's powerful agribusiness sector, which argues the policy unfairly shifts responsibilities and could affect upcoming elections. Despite opposition, the policy represents President Lula's commitment to reducing deforestation by 2030.
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