AGROPECUÁRIA RONCADOR LTDA

INTEGRATING CROP & LIVESTOCK

Roncador’s Landscape Protection Plan (LPP) is based on the company’s farming system which integrates crop production (predominantly soy) with livestock production (i.e. Integrated Crop and Livestock or “ICL”) on all of the farm’s productive areas. Impact targets linked to the ICL model include soy and cattle productivity improvements as well as annual information sharing activities to support the replication of this blueprint within the sector. In 2022, the farm achieved record-high soy and beef production, benefiting from productivity enhancements through the ICL model and favorable market conditions related to costs and prices. Soy production demonstrated a productivity increase of approximately 8% compared to the 2019 baseline (61.41 bags/hectare compared to 57 bags/hectare) bucking the national trend reporting negatively climatic and high production cost impact. Cattle production showed strong growth with 55% increase in productivity against the 2019 baseline (2.3 Unit of Animal/hectare compared to 1,48 Unit of Animal/hectares). Although cattle sales were strategically reduced due to low prices (vis-à-vis cost of production), as prices have improved the company is expected to benefit from this increase in 2023.

CORPORATE GOVERNANCE IN AGRI-BUSINESS

Fazenda Roncador (as well as Grupo Roncador) has been an established family-owned business, initially set up by Pelerson Soares Penido, and then run by his son and thereafter his grandsons since 1971. &Green was notified that Mrs. Rosa Penido Dalla Vecchia, the controlling shareholder of Roncador Group passed away in 2021 triggering a restructuring of the company and farming operations. To this date the restructuring is still not yet completed (although it is expected to conclude in 2023), as it requires a high degree of bureaucratical steps before judicial authorities, as well as a number of legal, tax and corporate actions.  

Family businesses are the backbone of Latin-America’s economy, as they support approximately 60% of the region’s GDP (reference article linked here). This is even more significant in agribusiness as most of corporate farms in Brazil, including S&E companies, are still ran as first or second-generation family businesses, similar to Roncador. As a result, succession and governance are of particular importance for financing institutions like &Green, who invest in these sectors and regions.   

COURT CASE WITH INCRA

In May 2021, Roncador lost ownership and possession of over 4,500 hectares of native forest to the National Institute of Colonization and Agrarian Reform ( INCRA ), following a long-standing judicial dispute. &Green has been monitoring the forested area to assess its impact. Recent satellite images compared to 2020 show evidence of material degradation, although the area is not yet deforested. Forest alerts indicate that the unprotected forest is being exploited, likely for small-scale wood extraction. This case highlights the potential role of private sector actors like Roncador in forest protection in Brazil.