Photo: MailsonPignata/iStock/Getty ImagesGlobo Rural | 19 January 2026
Brazil plans to have Arabs as partners in pasture recovery
By Camila Souza Ramos
Brazil’s Ministry of Agriculture intends to present a proposal for land investment in Brazil to Arab sovereign wealth funds in February aimed at converting degraded pastures into areas for planting crops. Since foreign land ownership is legally restricted in the country, the idea is that foreign investors can participate as minority shareholders in agribusiness investment funds (Fiagros) and partner with Brazilian landowners.
Banco do Brasil will draft the proposal together with the ministry. The plan is to create a scheme to attract foreign capital to finance the Caminho Verde Brasil program, which aims to recover degraded pastures.
Over the past three years, the administration has been studying options to raise funds for the program, which aims to transform 40 million hectares of degraded land — equivalent, today, to half of the total degraded pastures in Brazil — into cultivated or forest areas. The challenge is to find a large volume of resources at a low cost, since converting degraded areas is expensive, and subsidized resources currently offered by the National Treasury are scarce.
The talks are still preliminary, but in an environment of high interest rates, which practically make it impossible for producers to raise funds, the option of attracting direct equity investments rather than borrowing has gained strength within the ministry. One way to enable the participation of foreigners is to have them as minority shareholders, which would comply with current legislation. One legal restriction is, for example, the rule obligating foreigners who buy large areas for exploration to submit the operation to Congress.
“If this project succeeds, it [will be] a source of financing without financial cost and without currency variation,” said Carlos Ernesto Augustin, special advisor to the Ministry of Agriculture and responsible for the Caminho Verde Brasil program.
According to him, the difficulty in obtaining credit from abroad is the cost of bringing the money into Brazil, a task that requires currency hedging operations that, in practice, cancel out the benefit of lower interest rates in foreign markets. “It has not been easy to solve the conversion problem,” he said.
The itinerary for the Middle East roadshows is expected to include Saudi Arabia, the United Arab Emirates, and Qatar. The mission is expected to meet with representatives of the region’s major sovereign wealth funds, such as the Saudi SALIC and the Emirati Mubadala.
According to Augustin, Arab countries have already shown interest in preliminary contacts, seeing the plan as a way to guarantee food security for their populations. The ministry is also considering discussing the possibility of foreign countries, through local trading companies, establishing preferential purchase agreements for the production from farms in which their sovereign wealth funds have a stake.
And instead of receiving income from financing, sovereign wealth funds could profit from the appreciation of the assets in the converted areas. A hectare in Mato Grosso converted from degraded pasture to cropland can appreciate up to five times, considering that today a degraded pasture area is worth the equivalent of 200 sacks of soybeans per hectare, and a cropland area is worth 800 to 1,000 sacks per hectare, Augustin said.
In this Fiagro model, the Ministry of Agriculture is evaluating the possibility of Banco do Brasil joining the governance of the investment vehicle, potentially even participating as a shareholder.
According to Augustin, this investment model can attract both producers who have pasture but lack the resources to convert it, and producers who currently have liquidity constraints, need an injection of resources, and have land to convert.
He believes that once Arab funds engage in this project, other countries may also show interest, such as China or European nations. For now, Arab investors have shown the most interest in the idea.
The Ministry of Agriculture also intends to discuss ways to attract capital from other regions. To attract European capital, whether low-interest loans or equity, Brazil would have to offer environmental benefits, such as guaranteeing the preservation of vegetation beyond what is required by the Brazilian Forest Code, Augustin said.
In parallel, the ministry has also been exploring the possibility of receiving low-cost financing from international organizations, but said that the talks are still in the early stages.