Aligning rural credit with sustainable practices: environmental indicators for agricultural policies

This study examines the interface between rural credit policies and environmental sustainability objectives in Brazil, focusing on the 2023/2024 Harvest Plan and the 2024–2027 Pluriannual Plan (PPA). The analysis reveals that, despite normative advances, the integration of credit incentives with environmental performance indicators remains limited by operational gaps, regional concentration of resources, and deficiencies in monitoring systems. We argue that the use of the ratio between Total Factor Productivity (TFP) and Greenhouse Gas (GHG) Emissions as a sustainability metric is promising but requires methodological refinements and greater transparency. Our proposals include the official recognition of certified sustainable agricultural practices, smart territorial prioritization based on geospatial criteria, and the enhancement of territorialized Monitoring, Reporting, and Verification (MRV) systems. To operationalize credit targeting, we developed a Territorial Priority Index based on the normalization and combination of three variables: emissions-adjusted TFP, area of degraded pastureland, and a reduced history of sustainable credit.