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Investor Presentaiton

TERRITORIAL CLASSIFICATION SYSTEM ACCORDING TO LAND USE DYNAMICS 13 FIGURE 2 - SPATIAL RESULT OF TERRITORIAL CLASSIFICATION SYSTEM Considering the breadth of Brazilian territorial diversity, a municipal classification system was defined on a national scale and according to the development stage of the agriculture and animal husbandry market and the local land market. This classification considered: → the evolution of the municipality's total surface area allocated to agriculture and animal husbandry - the variation of the area used for agriculture and animal husbandry between 2006 and 2017; → the remaining area of native vegetation - the proportion of native vegetation, including legal nature reserves and permanent preservation areas, in relation to the area used for agriculture and animal husbandry in 2017; → productivity - the ratio between agriculture and animal husbandry's gross production value and the total area allocated for these purposes in 2017; → the transition from pasture to crops - the reduction of pasture areas and the expansion of agricultural areas; → the condition of available infrastructure - the percentage of establishments with access to electricity. In expansion In transition Stagnated Consolidated In crisis Municipal class Definition In expansion Municipalities demonstrating a considerable expansion in their total surface area allocated to agribusiness, with significant remaining native vegetation or lower levels of native vegetation, but whose agribusiness productivity levels remain low. MOST MUNICIPALITIES WITH AN EXPANDED AGRIBUSINESS AREA ARE FOUND IN THE LEGAL AMAZON OR MATOPIBA. Source: original research results. In transition Stagnated Consolidated In crisis Municipalities with moderate remaining native vegetation and moderate to high agribusiness productivity levels. Municipalities with a stable or decreasing total surface area allocated to agribusiness, and with significant remaining native vegetation. Municipalities with a stable or decreasing total surface area allocated to agribusiness, and with little remaining native vegetation and high agribusiness productivity levels. Municipalities with a stable or decreasing total surface area allocated to agribusiness, little remaining native vegetation and low agribusiness productivity levels. DEFORESTATION AND LAND PRICE DEPRECIATION The deforestation that occurred in Brazil from 2011 to 2014 reduced the value of land stock in 2017 by 5%, compared to what would have been obtained in the absence of deforestation. This percentage represents US$ 27.1 billion, or an average price reduction of US$ 77.57 per hectare. The depreciation rate reached 25% of the value of land stock in municipalities where the agricultural frontier expanded - an amount equivalent to US$ 16.5 billion, or an average price reduction of US$ 195 per hectar. 4 The Legal Amazon comprises the states of Rondônia, Acre, Amazonas, Roraima, Pará, Amapá, Tocantins, Mato Grosso and part of the state of Maranhão (west of the 44th meridian), as indicated in Article 2 of Complementary Law No. 124 of 3 January 2007. HOW DOES BRAZILIAN AGRIBUSINESS BENEFIT FROM DEFORESTATION?
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