IDB and Marfrig end talks on $200m sustainable loan

A worker cuts beef joints at the Marfrig Group slaughterhouse in Promissao, 500 km northwest of Sao Paulo October 7, 2011. REUTERS/Paulo Whitaker

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SAO PAULO, Feb 23 (Reuters) – The Inter-American Development Bank (IDB) and Brazilian meatpacker Marfrig Global Foods SA (MRFG3.SA), owner of U.S. brand National Beef, have broken off talks over a 200 million dollars related to the environment. targets, the IDB said on Wednesday.

The failure of the proposal highlights an uphill battle for the Brazilian beef industry, the world’s largest exporter, to overcome concerns that it contributes to deforestation of the Amazon rainforest through its network of opaque suppliers and poorly regulated.

In a statement, the IDB said it conducted a due diligence last year on Marfrig’s “Verde+” program, which is designed to improve the sustainability of its Brazilian beef supply chain.

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The IDB said that as part of its internal review process, Marfrig and the lender reached “a mutual agreement that the terms were not ideal for moving forward with the loan.”

Marfrig said the suspension of talks over the IDB loan was due to “disagreement between the parties over the proposed financial terms”.

Brazil has one of the largest cattle herds in the world, which has grown dramatically in the Amazon region in recent years as herders expand into illegally deforested land, thanks to weaker environmental enforcement under the President Jair Bolsonaro.

Meatpackers such as Marfrig have stepped up vetting of their direct suppliers to ensure they are complying with environmental laws, but it has proven more difficult to track the status of “indirect suppliers” supplying cattle to these ranches. .

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Reporting by Ana Mano and Jake Spring in Sao Paulo; Editing by Matthew Lewis and Kenneth Maxwell

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