Agricultural Law 2026

Definitive global law guides offering comparative analysis from top-ranked lawyers

Definitive global law guides offering comparative analysis from top-ranked lawyers

Contributing Editor Domicio dos Santos Neto Santos Neto Advogados

Practice Guides

Agricultural Law

Contributing Editor Domicio dos Santos Neto Santos Neto Advogados

2026

Chambers Practice Guides For more than 20 years, Chambers Global Guides have ranked lawyers and law firms across the world. Chambers now offer clients a new series of Practice Guides, which contain practical guidance on doing legal business in key jurisdictions. We use our knowledge of the world’s best lawyers to select leading law firms in each jurisdiction to write the ‘Law & Practice’ sections. In addition, the ‘Trends & Developments’ sections analyse trends and developments in local legal markets. Disclaimer: The information in this guide is provided for general reference only, not as specific legal advice. Views expressed by the authors are not necessarily the views of the law firms in which they practise. For specific legal advice, a lawyer should be consulted. Content Management Director Claire Oxborrow Content Manager Jonathan Mendelowitz Senior Content Reviewers Sally McGonigal, Ethne Withers, Deborah Sinclair, Stephen Dinkeldein, Vivienne Button and Sean Marshall Content Reviewers Lawrence Garrett, Marianne Page, Heather Palomino, Alison Moore, Adrian Ciechacki and Michael Irvine Content Coordination Manager Nancy Tsang Senior Content Coordinators Carla Cagnina and Delicia Tasinda Content Coordinator Joanna Chivers Head of Production Jasper John Production Coordinator Genevieve Sibayan

Published by Chambers and Partners 165 Fleet Street London EC4A 2AE Tel +44 20 7606 8844 Fax +44 20 7831 5662 Web www.chambers.com

Contents

INTRODUCTION Contributed by Domicio dos Santos Neto and Frederico Favacho, Santos Neto Advogados p.4

BRAZIL Law and Practice p.11 Contributed by Santos Neto Advogados Trends and Developments p.26 Contributed by Ernesto Borges Advogados

JAPAN Law and Practice p.31

Contributed by Nishimura & Asahi Trends and Developments p.48 Contributed by Nishimura & Asahi

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INTRODUCTION

Contributed by: Domicio dos Santos Neto and Frederico Favacho, Santos Neto Advogados

Santos Neto Advogados is a Brazilian law firm with more than 30 years of experience and a team of 78 professionals, with offices in São Paulo and Ribeirão Preto. The firm has a strong focus on agribusiness, advising clients across the agricultural value chain, including rural producers, co-operatives, trading companies, financial institutions, investors and agri- business businesses. Its practice covers rural credit and agribusiness finance, structured finance, capital markets, commercial and corporate matters, interna- tional trade, tax, environmental matters, restructuring and disputes. The firm advises on complex transac-

Contributing Editor

Co-Author

Frederico Favacho is a partner at Santos Neto Advogados, focusing on agribusiness, corporate matters and international trade. He advises clients on complex corporate and agribusi- ness matters, with particular experi-

ness, project finance, trade finance, capital markets, derivatives and banking and finance practices, and has particular experience in agribusiness financing structures. He was formerly a professor of Commer- cial Law at the University of São Paulo and Fundação Armando Álvares Penteado (FAAP), and is a lecturer and author on trade finance and corporate law. He is recognised by Chambers and Partners as a Star Individual for Agribusiness in Brazil.

ence in transactions involving the agricultural sector. He previously served as Senior Legal Counsel at Bunge, acting as a senior legal business partner and advising on M&A transactions. Frederico is a profes- sor and arbitrator, and serves as a consultant to the National Association of Grain Exporters (ANEC), the National Association of Cotton Exporters (ANEA) and the Brazilian Agribusiness Association (ABAG). He is a member of CBAR, CIArb and FOSFA.

Santos Neto Advogados 418, Funchal Street 22nd floor São Paulo – SP Brazil Tel: +55 11 3124 / 3070 Email: Elvis.ferreira@santosneto.com.br Web: www.santosneto.com.br

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INTRODUCTION Contributed by: Domicio dos Santos Neto and Frederico Favacho, Santos Neto Advogados

Agribusiness at the Crossroads: Conflicts, Trade Realignments and New Frontiers in a Post-VUCA World Challenges for agribusiness worldwide For decades, the VUCA framework – an acronym for Volatility, Uncertainty, Complexity and Ambiguity, coined by the U.S. Army War College in the aftermath of the Cold War – served as the dominant conceptual lens through which strategists, policymakers and busi- ness leaders mapped the challenges of an unpredict- able world. It was a useful shorthand: it captured the sense that the future had become harder to read, that cause and effect were increasingly difficult to trace, and that the rules governing markets, geopolitics and technology were in constant flux. For much of the first two decades of the 21st century, agribusiness operated in a world that was, in essence, a VUCA world – one characterised by commodity price cycles, climate variability, shifting trade flows and the gradual tightening of environmental and food safety requirements. Challenging, certainly, but navigable by those with the right information, the right relationships and the right legal and financial structures. That world no longer exists. It has been replaced by something qualitatively different: a condition that strategists and scholars have variously labelled BANI (Brittle, Anxious, Non-linear and Incomprehensible) or, in the terminology popularised by economist Klaus Schwab of the World Economic Forum, a “polycri- sis” – a state in which multiple systemic shocks occur simultaneously, interact with each other in unpredict- able ways, and produce consequences that are dis- proportionate to and qualitatively different from the sum of their individual parts. In a polycrisis, it is not enough to understand each risk in isolation. The Strait of Hormuz closure drives up fer- tiliser prices at the precise moment when an emerging El Niño threatens crop yields. A landmark trade agree- ment between the EU and Mercosul enters into force at the exact moment when the EU bans Brazilian animal products over antimicrobial non-compliance. A tariff investigation launched in Washington reshapes export competitiveness for the very commodities that China has simultaneously committed to buying from a com- peting producer. Biofuel mandates create new demand

precisely when traditional commodity markets are over- supplied. No single one of these dynamics, taken alone, would be exceptional. Taken together, arriving in the same compressed timeframe and interacting across supply chains, regulatory frameworks, financial mar- kets and geopolitical alliances, they constitute exactly the kind of polycrisis environment that has rendered the old VUCA vocabulary insufficient. The world of agribusiness has not merely become more complex. It has become more “polychromatic” – exhibiting multiple, simultaneous frequencies of dis- ruption that interfere with one another in ways that make traditional risk management and scenario plan- ning inadequate tools for navigating what lies ahead. In this global scenario, the world turns with concern to the issue of food security in its various fundamental aspects: availability, access, utilisation and stability, seeking greater food production at lower costs and ensuring access to it for an increasingly large portion of the world’s population. However, this necessary effort faces an unexpected challenge: a process we can call “deglobalisation”, stemming from a growing wave of neoprotectionism, a crisis of multilateralism, leading to a weakening of the role of the World Trade Organization, hindering the global integration of food chains, and resulting in higher costs for end consumers while reducing pro- ducers’ profits. Neoprotectionism manifested itself in the form of non-tariff barriers, sometimes disguised as countries’ concerns about environmental issues. Regulatory divergence in biotech approval timelines, food safety standards, and sustainability labelling requirements is creating an increasingly fragmented and costly compliance landscape for producers and exporters operating across multiple markets. Despite these difficulties, the challenge of food secu- rity remains central as the global population continues to grow, and millions of people remain vulnerable. With a particular focus on tropical agriculture, new technologies capable of increasing productivity are becoming indispensable. However, despite technologi- cal advances, the challenge of balancing sustainability with economic viability persists. Emerging environmen-

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INTRODUCTION Contributed by: Domicio dos Santos Neto and Frederico Favacho, Santos Neto Advogados

tal demands – especially in export-oriented production chains, with the creation of incentive mechanisms for producers, such as full traceability, less emission-inten- sive techniques, or qualification to operate in the car- bon market – often impose high implementation costs and, without adequate market compensation, may only serve to create more pressure and lower income for producers while exacerbating regional inequalities. Dealing with the challenges Growing demand, climate shocks and shifting trade patterns are redefining how agribusiness scales. Around the world, producers aim to decouple output growth from land expansion by investing in efficiency, better inputs and data-driven agronomy. At the same time, trade disruptions and logistical bottlenecks have encouraged supply chain diversification, exposing concentration risks in products and destinations that affect resilience and the cost of capital. Therefore, public policies are key for setting incen- tives and shaping risk allocation. Toolkits commonly include credit lines and guarantees, premium subsi- dies for insurance, fiscal signals and multi-year plan- ning frameworks. Some jurisdictions prioritise produc- tivity and infrastructure; others emphasise biodiversity, water stewardship or labour standards. Divergent definitions, supervisory mandates and approval pro- cesses can create friction for cross-border operators, making early policy mapping essential to bankability. Land use, environmental permitting and water rights have moved from backdrop to decisive investment variables. Projects increasingly need to evidence compliance and traceability in order to meet domes- tic rules and the expectations of trade partners and financiers. Ownership, tenure and access restrictions – particularly for non-residents – can affect feasibility, security packages and valuation. Water governance adds another layer: in many jurisdictions, allocation, quality and scarcity risks directly influence project design, operating costs and long-term resilience. ESG considerations now shape market access and the cost of capital. Buyers and lenders seek auditable policies that connect production to nature-based solu- tions, lower emissions and credible social safeguards. Taxonomies, disclosure regimes and sustainability-

linked covenants increasingly condition pricing and eligibility for transactions, while climate-related trade requirements can create de facto entry barriers. Con- sistent ESG implementation tends to raise productivity and open premium markets, provided targets, metrics and monitoring are transparent and verifiable. Outlook The agribusiness sector will still be under great pres- sure, from the increasing world population growth, the climatic emergency or geopolitics. Some important movements will happen in the coming months and years that may shape the future, such as the entry into force of the European Union Deforestation Regulation, the EU-Mercosul Partnership Agreement, the consoli- dation (or not) of the BRICS alliance, China’s invest- ments in Latin America, and Trump’s tariffs policy, among others. Several of these developments have already materialised and are reshaping the competi- tive landscape for agribusiness globally in ways that demand urgent attention from producers, investors and legal advisers alike. The paragraphs below examine the principal drivers: • the impact of armed conflicts on input costs and producer margins worldwide; • the new geopolitical architecture of trade agree- ments and the tensions it generates between mar- ket opening and unilateral regulatory action; • China’s structural pivot toward protein self-suffi- ciency and its consequences for global soybean flows; and • the emerging opportunities in the biofuels and bioinputs economy as the energy transition reshapes demand for agricultural commodities. The impact of armed conflicts The US–Iran war, the Strait of Hormuz crisis and the compression of agricultural margins worldwide The most immediate shock to the cost structure of global agribusiness in 2026 has come from an armed conflict far from most of the world’s principal farm- ing regions. On 28 February 2026, the United States and Israel launched co-ordinated military operations against Iran, triggering a closure of the Strait of Hor- muz that has constituted the largest disruption to global energy supply since the 1970s energy crisis.

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INTRODUCTION Contributed by: Domicio dos Santos Neto and Frederico Favacho, Santos Neto Advogados

Brent crude surged from approximately USD70 per barrel to over USD110 at the peak, and the closure of the waterway – through which approximately 30% of globally traded fertilisers normally transit, alongside 20% of LNG and 27% of internationally traded oil – sent fertiliser prices sharply higher across every major agricultural producing region. FOB granular urea, a bellwether for nitrogen fertilisers, rose from USD400– 490 per metric ton before the conflict to approximately USD700 per metric ton within weeks, and prices for diammonium phosphate (DAP) surged well above their February 2026 benchmark of USD622 per short ton. The shock has been global in scope precisely because the Gulf region is so structurally dominant in fertilis- er production: countries exposed to the disruption account for nearly 49% of global urea exports and approximately 30% of global ammonia exports. The consequences are most acute in countries that are both major agricultural producers and heavily import- dependent for fertilisers. • Brazil is the world’s largest fertiliser user, at approximately 49 million metric tons in 2025, 85% of which is imported. The country saw urea import volumes fall by 33% in the initial weeks of the crisis, and faces the additional challenge that the conflict began at the precise moment when producers must purchase inputs for the 2026–27 planting cycle. • India is one of the world’s largest rice and wheat producers, and faces exposure through import dependence and also through reduced domestic manufacturing capacity linked to disrupted LNG feedstocks. • Sub-Saharan Africa, where over 90% of fertiliser is imported, faces the most acute vulnerability. • In the United States, early surveys by the Ameri- can Farm Bureau found that approximately 70% of farmers were unable to afford all the fertiliser they needed for the 2026 crop, and a coalition of 54 agricultural groups urged the administration to provide emergency market relief. Critically, the 2026 episode has emerged in an envi- ronment of structurally compressed margins across producing regions: unlike the 2022 fertiliser shock, which coincided with a sharp rise in commodity prices

that partially offset the cost increase, fertiliser price increases in 2026 have not been matched by com- mensurate commodity price gains, squeezing profita- bility across the global soybean, corn and wheat belts simultaneously. If the Strait of Hormuz remains dis- rupted through the fall of 2026, modelling by research- ers at North Dakota State University suggests that global urea availability could tighten materially, with agricultural producing nations competing for reduced supply at elevated prices into the key forward-booking windows for the 2026–27 season. The conflict has also confirmed a structural vulnerabil- ity that pre-existed it: the global fertiliser market lacks the kind of co-ordinated strategic reserves that exist for oil, making supply disruptions harder to manage and price spikes harder to moderate. New geopolitical alignments: trade agreements, tariff threats and market access challenges Beyond the immediate input cost shock from the Strait of Hormuz crisis, global agribusiness is navigating a new and more complex geopolitical architecture of trade relationships – one that combines unprecedented market-opening through bilateral and plurilateral agree- ments with the simultaneous erection of new regula- tory, tariff and sanitary barriers by the same trading partners. The defining feature of this landscape is not that any single trade arrangement is exceptional, but that market access gains and market access losses are arriving simultaneously, creating a net outcome that is ambiguous and jurisdiction-specific. The pattern is visible across the major agricultural trade relationships of the world. The US–Brazil bilat- eral relationship illustrates the tension between trade and geopolitics acutely. On 15 July 2025, at the direc- tion of President Trump, the US Trade Representative (USTR) initiated an investigation under Section 301 of the Trade Act of 1974 into a broad range of Brazilian trade practices, covering: • digital trade and electronic payment services;

• preferential tariff arrangements; • anti-corruption enforcement; • intellectual property protection; • ethanol market access; and • illegal deforestation.

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INTRODUCTION Contributed by: Domicio dos Santos Neto and Frederico Favacho, Santos Neto Advogados

After public hearings in September 2025 and formal consultations in April 2026, the USTR issued a deter- mination on 1 June 2026, finding that several Brazilian practices are unreasonable and burden US commerce, and proposing a 25% additional duty on Brazilian-ori- gin goods, with a statutory deadline of 15 July 2026 for responsive action. The proposed measure is in addi- tion to a pre-existing 10% baseline tariff applied under Section 122 since February 2026. While many key agricultural export categories – including beef, coffee, orange juice, soybeans, corn and cocoa – appear in the proposed exemption annex, products such as fish, ethanol and a range of processed food items remain exposed, and the overall uncertainty creates significant risk premiums for exporters and their trading partners. The EU–Mercosul front presents an equally paradoxi- cal picture. The EU–Mercosul Partnership Agreement was signed on 17 January 2026 after more than two decades of negotiations, and provisionally entered into force on 1 May 2026, creating the world’s largest trading zone by population at approximately 700 mil- lion people and triggering tariff reductions across a broad range of goods. However, just two weeks after the agreement took effect, the European Commission voted unanimously to remove Brazil from the list of third countries authorised to export animal products to the EU – a decision taking effect on 3 September 2026, and covering beef, poultry meat, eggs, aqua- culture products, honey and casings. Brazil is the only Mercosur country affected; Argen- tina, Paraguay and Uruguay retain their authorised status. The stated ground is Brazil’s failure to demon- strate compliance with EU requirements on antimicro- bial use throughout the full lifetime of the animals from which exported products originate – requirements that apply uniformly to all third-country suppliers regard- less of their bilateral trade commitments. Brazil cur- rently lacks a nationwide individual animal traceability system capable of verifying this requirement, with a fully operational system unlikely before 2032. The case illustrates a dynamic that recurs across multiple regulatory frameworks: trade agreements open tariff gates while regulatory standards – on food safety, sustainability and labour – provide alternative mechanisms through which the same markets can be

effectively closed. The EU’s Regulation on Deforesta- tion-Free Products (EUDR) exemplifies this dynamic at a broader, multi-commodity level. Twice delayed (with mandatory compliance now set for 30 December 2026 for large and medium operators, and 30 June 2027 for micro and small operators), the EUDR requires export- ers of cattle, cocoa, coffee, soy, palm oil, rubber and timber to demonstrate that their products were not produced on deforested land after 31 December 2020. The regulation applies globally to all suppliers to the EU market, affecting producers in Latin America, Southeast Asia and Africa alike. Its benchmarking system, which classifies countries by deforestation risk, creates reputational and market access conse- quences that extend beyond the formal compliance requirements, and the compliance burden falls dis- proportionately on smallholder producers across all affected geographies. Alongside these challenges, however, the same period has seen meaningful advances in trade inte- gration. The EFTA–Mercosul Free Trade Agreement, concluded in July 2025 and signed in Rio de Janeiro in September 2025, creates a combined market of approximately 290 million people, eliminates or reduc- es tariffs on nearly 99% of trade value, and opens new channels across agriculture, services and investment. The Mercosul–Singapore Free Trade Agreement (the bloc’s first with a Southeast Asian economy) entered into force for Paraguay and Singapore on 1 February 2026, and for Uruguay on 1 March 2026, opening a gateway to the Asia-Pacific region across a bilateral goods trade of USD11.9 billion. These agreements, alongside the EU–Mercosul deal, reflect a world in which trade integration is expanding its geographic scope – but in which the benefits of that integration are being conditioned, contested and sometimes immediately offset by unilateral regulatory or tariff action from the very same partners. China’s pivot toward protein self-sufficiency and its consequences for global soybean markets Perhaps the most structurally significant demand-side development reshaping global agricultural trade over the medium term is China’s sustained and accelerat- ing effort to reduce its dependence on imported soy-

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INTRODUCTION Contributed by: Domicio dos Santos Neto and Frederico Favacho, Santos Neto Advogados

beans – a shift that carries systemic implications for the structure of global oilseed markets, the viability of export-oriented agricultural expansion, and the price assumptions embedded in land values and rural credit across the Southern Hemisphere. China is currently the world’s largest soybean importer by a substantial margin, accounting for approximately 60% of global soybean imports and having absorbed a record 111.83 million metric tons in 2025. Its pur- chasing decisions are the single most important vari- able in global soybean price discovery. Two concur- rent developments are now reshaping those decisions in ways that will be felt not only in Brazil and Argentina (together responsible for approximately 66% of glob- al soybean exports), but across every market whose dynamics are linked to oilseed pricing, including live- stock feed, vegetable oil and biodiesel. • The first is a series of bilateral purchase com- mitments with the United States that redirect a material share of Chinese soybean imports away from South American suppliers. Following a sum- mit between Presidents Trump and Xi in October 2025, China committed to purchase at least 12 million metric tons of US soybeans in the final two months of 2025, and at least 25 million metric tons annually in each of 2026, 2027 and 2028. A further expansion in May 2026 committed China to at least USD17 billion per year in US agricultural products across the same period, beyond the soybean volume commitments. The 25 million metric ton annual soybean target represents approximately 22% of China’s projected total imports, partially reversing the reorientation of Chinese sourcing that occurred during the 2025 trade war, when China directed record volumes to South American sup- pliers. South American soybean exports to China in 2026 are already projected to decline materially relative to 2025 peaks as a result. • The second and more structurally durable develop- ment is China’s domestic food security strategy. The 2026–2030 Five-Year Agricultural Plan sets targets to increase total grain production from 700 to 715 million metric tons, with a stretch goal of 750 million tons, and places particular emphasis on reducing dependence on imported protein. The Ministry of Agriculture’s Three-Year Action Plan to

Reduce Soybean Meal in Feed, launched in 2023, targets a reduction in the share of soybean meal in compound livestock feed from approximately 17% at its peak to 10% by 2030. According to Goldman Sachs analysis published in December 2025, measures already implemented (including substitution of soybean meal with alterna- tive protein sources and improvements in feed-con- version efficiency) reduced Chinese soybean demand by approximately 15 million metric tons between 2021 and 2024; Goldman projects a further reduction of up to 42 million metric tons between 2030 and 2035 through continued substitution and livestock genetic improvements. A government-backed outlook released in April 2026 projects Chinese soybean imports to decline from 111.83 million metric tons in 2025 to 82.55 million metric tons by 2035 – a reduction of 26.2% that, if realised, would be the largest structural demand reduction in the history of globally traded oilseeds. The aggregate impact on global agricultural trade pat- terns would be profound: commodity prices, acreage allocation decisions and infrastructure investment models across South America, the United States and the Black Sea region have all been calibrated to the assumption of continuously expanding Chinese demand. A sustained structural decline would require a fundamental recalibration of those models, and the adjustment is unlikely to be smooth or linear. Biofuels and bioinputs: the energy transition as a structural opportunity for agricultural commodity markets Against the backdrop of compressed commodity pric- es, rising input costs and tightening market access in traditional destinations, the global energy transition is emerging as one of the most consequential structural opportunities for agricultural commodity markets in the coming decade. The convergence of three major regulatory move- ments – the IMO’s Net-Zero Shipping Framework, the EU’s suite of decarbonisation mandates for transport, and the global expansion of sustainable aviation fuel requirements – is creating entirely new demand vec- tors for the very commodities most exposed to price

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INTRODUCTION Contributed by: Domicio dos Santos Neto and Frederico Favacho, Santos Neto Advogados

pressure today: sugar, soybeans, vegetable oils and corn. These demand vectors are distinctive in being driven by regulatory mandates and energy security imperatives rather than discretionary consumption, making them structurally more durable and less cycli- cal than traditional commodity markets. The International Maritime Organization approved a draft Net-Zero Shipping Framework at its MEPC 83 session in April 2025, setting targets to reduce the car- bon intensity of international shipping by at least 40% by 2030 and achieve net-zero greenhouse gas emis- sions by or around 2050. The formal adoption vote was adjourned to October 2026, but major shipping companies have already committed to fleet decarbon- isation programmes ahead of the formal regulatory trigger. The Framework’s greenhouse gas fuel inten- sity standard creates compliance incentives for biofu- els – including biodiesel and hydrotreated vegetable oil (HVO) derived from soybean oil and other vegetable oils – as drop-in transitional fuels capable of reducing life cycle emissions without vessel modifications. In Europe, the FuelEU Maritime regulation entered into force in January 2025, mandating a 2% reduction in the greenhouse gas intensity of fuel used by ships trading in European ports, scaling to 6% by 2030 and 80% by 2050; early evidence from the Port of Rotter- dam shows biofuel blend volumes holding year-on- year in the first quarter of 2026 as conventional fuel volumes fell sharply. A complicating design feature for vegetable oil producers is that FuelEU Maritime bars crop-based biofuels from compliance eligibility for vessels trading in European waters, incentivis- ing instead waste-derived feedstocks such as used cooking oil. This creates a bifurcated global demand picture: waste-derived feedstocks command a com- pliance premium in European maritime markets, while crop-based biofuels find growing demand in non- European shipping markets, domestic road transport mandates and aviation. The aviation sector represents the most favourable structural opportunity. Global SAF mandates are accelerating – the EU’s ReFuelEU Aviation regulation, ICAO’s CORSIA programme and the US Clean Fuel Production Credit are collectively creating demand for a fuel that represented less than 0.5% of global

aviation fuel consumption in 2026 but for which the International Air Transport Association projects a need for 500 million tonnes annually by 2050. The feedstock pathways most immediately scalable are HEFA (Hydroprocessed Esters and Fatty Acids), fed by vegetable oils and animal fats, and ATJ (Alcohol- to-Jet), derived from sugarcane, corn, and cellulosic ethanol. Countries with both significant biomass feed- stock bases and established biofuels infrastructure – Brazil first among them, but also the United States, Argentina, Colombia, Indonesia and Malaysia – hold a structural comparative advantage in meeting this demand. At its 82nd Annual General Meeting in Rio de Janeiro in June 2026, IATA identified Brazil as hav- ing the potential to produce approximately 12 million tonnes of SAF by 2030 – five times estimated global production in 2026 – by leveraging its sugarcane etha- nol base and soybean oil supply chains. Alongside liquid biofuels, the bioinputs sector (encom- passing biological nitrogen fixation, biostimulants, biopesticides and biofertilisers derived from microbial and plant-based sources) is emerging as a parallel strategic vector, made more urgent by the Strait of Hormuz crisis. As synthetic fertiliser prices spike and supply chains become geopolitically fragile, the sub- stitution of chemical inputs with biological alternatives becomes both an agronomic necessity and a sup- ply chain resilience imperative for producing regions worldwide. The challenge for both vectors – biofuels and bioinputs – is to align the regulatory, certification and invest- ment frameworks needed to deploy these technolo- gies at the scale and speed that the energy transition and food security agendas require. That alignment is itself a legal and governance challenge, requiring the development of new contract structures, sustainabil- ity certification systems, carbon-credit mechanisms and project finance models that can bridge the gap between existing agricultural value chains and the new markets opening up through decarbonisation mandates. The market will continue to reward issuers who evi- dence compliance, manage data well and align incen- tives across the chain – pairing innovation with legal clarity to support food security and climate goals.

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BRAZIL

Colombia

Ecuador

Brazil

Peru

Brasilia

Bolivia

Law and Practice Contributed by: Domicio dos Santos Neto, Frederico Favacho, Henrique Erbolato and Fernando Ferreira Santos Neto Advogados

Rio de Janeiro São Paulo

Paraguay

Chile

Argentina

Contents 1. Agricultural Market Overview P.13 1.1 Key Economic Indicators p.13 1.2 Main Crops and Supply Chains p.13

6. Legal Advisory and Market Practice P.19 6.1 Role of Legal Advisers in Transaction Structuring p.19 6.2 Legal Opinions and Market Acceptance p.19 6.3 Due Diligence and Documentation p.20 6.4 Legal Practice and Risk Allocation p.20 7. Taxation and Incentives in Agribusiness P.20 7.1 Tax Regime for Rural Operations p.20 7.2 Tax Benefits and Incentives p.21 7.3 Taxation of Financial and Capital Instruments p.22 8. Dispute Resolution and Enforcement P.22 8.1 Enforcement of Agribusiness Contracts p.22 8.2 Litigation and Arbitration Trends in Agribusiness p.23 8.3 Creditor Protection and Collateral Enforcement p.23 8.4 Disputes in Uncompleted Transactions p.24 9. Recent Developments and Future Trends P.24 9.1 Regulatory and Legislative Developments p.24 9.2 Market Adaptation and Investor Sentiment p.24 9.3 ESG and Sustainability p.24

1.3 Export Profile and Global Trade Role p.13 2. Legal and Institutional Framework P.13 2.1 Agriculture-Sector Policies and Planning Instruments p.13 2.2 Agriculture-Sector Finance p.14 2.3 Key Authorities and Supervisory Bodies p.14 2.4 Interaction With Other Areas of Law p.15 3. Land Ownership, Use and Environmental Compliance P.15 3.1 Rural Land Use Regulation p.15 3.2 Foreign Ownership Restrictions p.15 3.3 Environmental Requirements p.16 4. Legal Concepts and Regulatory Definitions P.17 4.1 Definition and Scope of Agribusiness p.17 4.2 Conflicts Across Regulatory Instruments p.17 5. Financial Instruments and Financing Structures P.18 5.1 Agriculture-Sector Credit Instruments p.18 5.2 Export Financing Structures p.18 5.3 Capital Market Instruments p.18 5.4 Investment Funds and Securitisation p.18 5.5 Collateral Structures and Guarantee Models p.19

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BRAZIL Law and Practice Contributed by: Domicio dos Santos Neto, Frederico Favacho, Henrique Erbolato and Fernando Ferreira, Santos Neto Advogados

tions involving rural receivables, agribusiness securi- ties, structured financing, guarantees and investment structures, as well as contentious matters involving agricultural businesses and their creditors. Recent work includes advising on rural credit and struc- tured finance transactions, capital markets offerings backed by agribusiness receivables, and judicial restructuring proceedings involving major Brazilian agribusiness companies. The firm combines sector- specific knowledge with multidisciplinary expertise to address the transactional, regulatory and contentious aspects of agribusiness. Frederico Favacho is a partner at Santos Neto Advogados, focusing on agribusiness, corporate matters and international trade. He advises clients on complex corporate and agribusiness matters, with particular experience in transactions involving the agricultural sector. He previously served as Senior Legal Counsel at Bunge, acting as a senior legal business partner and advising on M&A transactions. Frederico is a professor and arbitrator, and serves as a consultant to the National Association of Grain Exporters (ANEC), the National Association of Cotton Exporters (ANEA) and the Brazilian Agribusiness Association (ABAG). He is a member of CBAR, CIArb and FOSFA.

Authors

Domicio dos Santos Neto is a founding partner of Santos Neto Advogados, with 26 years’ experience in advising investors on financial transactions and security packages in Brazil. He leads the firm’s agribusiness, project finance, trade finance, capital markets, derivatives and banking and finance practices, and has particular experience in agribusiness financing structures. He was formerly a professor of Commercial Law at the University of São Paulo and Fundação Armando Álvares Penteado (FAAP), and is a lecturer and author on trade finance and corporate law. He is recognised by Chambers and Partners as a Star Individual for Agribusiness in Brazil.

Henrique Erbolato is a partner at Santos Neto Advogados with experience in tax consulting and litigation before judicial and administrative courts. He advises clients on tax matters related to

Fernando Ferreira is a partner at Santos Neto Advogados and has more than 15 years’ experience in dispute resolution and bankruptcy and restructuring. He advises clients on civil litigation, civil liability, commercial

business structuring and restructuring, M&A, corporate reorganisations, and inbound and outbound foreign investment. Henrique has advised clients across several industries, including infrastructure, healthcare, technology and telecommunications, and previously served as an administrative judge at the Taxpayers Council of the Municipality of São Paulo. He has also worked at leading Brazilian and international law firms, and at Ericsson. Henrique is a member of the Tax Management International Forum.

and consumer matters, debt recovery and restructuring proceedings, with particular experience in the agribusiness sector. Fernando has worked on some of the most significant judicial restructuring proceedings involving Brazilian agribusiness, and has participated in discussions before Congress concerning amendments to the Brazilian Bankruptcy Law, as well as judicial proceedings concerning the eligibility of individual rural producers for bankruptcy protection. He holds a Master’s degree in Civil Procedure Law from PUC/SP.

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BRAZIL Law and Practice Contributed by: Domicio dos Santos Neto, Frederico Favacho, Henrique Erbolato and Fernando Ferreira, Santos Neto Advogados

Santos Neto Advogados 418, Funchal Street 22nd floor São Paulo – SP Brazil Tel: +55 11 3124 / 3070 Email: Elvis.ferreira@santosneto.com.br Web: www.santosneto.com.br

1. Agricultural Market Overview 1.1 Key Economic Indicators

1.3 Export Profile and Global Trade Role Agribusiness is the most internationalised sector of the Brazilian economy, responsible for 27% of GDP, 20% of jobs and almost half of the country’s exports. Total Brazilian agribusiness exports reached USD148.4 billion in 2024 (considering the USDA agribusiness classification), consolidating the country as the third largest exporter of agro products in the world, behind the European Union and the USA. This performance was driven mainly by the growth in shipments of soy, meats (beef, pork and poultry), sugar, corn and coffee. An analysis of the sector’s trade data shows a high concentration in both products and destination mar- kets. Soybeans and meat alone account for 54% of Brazilian agribusiness exports. As for the des- tinations of these products, China and other Asian countries absorb approximately half of Brazil’s agri- cultural exports. Despite the high concentration in a few products and destinations, the Brazilian strategy has achieved very positive results in the agribusiness trade balance. In addition to leading the world market share of the main exported agricultural commodities, exports of processed agricultural items have also grown at an average annual rate of 8.4%, surpassing Brazil’s main competitors, such as the USA and the European Union. 2. Legal and Institutional Framework 2.1 Agriculture-Sector Policies and Planning Instruments Key Policy Instruments Brazilian agricultural policies are developed nation- ally by the Secretariat of Agricultural Policy (SPA), an

According to data from the Food and Agriculture Organization of the United Nations (FAO), in 2021 the world produced approximately USD6 trillion in agribusiness products at current values, with Brazil accounting for 2.6%, equivalent to USD158 billion and ranking 5th in the world for production in terms of value. Considering the value of the main agrifood commodities consumed in the world, Brazil accounts for 10.3% of all production, behind only China, the United States and India. The entire agrifood chain contributes over a quarter of Brazil’s overall economic output (estimated at roughly 23% to 26%), according to data tracked by Cepea. The total monetary value of farm-gate and livestock output is projected at over BRL1.5 trillion, demonstrating strong domestic pro- duction volumes. Brazil utilises roughly 30% of its land area for farming and pasture, standing as a top Brazil is a global agricultural powerhouse and leads the world in the export of several key commodities in the agricultural sector, such as soybeans, cotton, beef and orange juice. It is already the largest exporting country in the world (when not considering economic blocs such as the European Union), surpassing its biggest competitor in the international food trade – the USA – since 2023. The Brazilian agricultural supply chain functions through an integrated, highly scaled network spanning inputs, production, processing and export logistics. global producer of grain and protein. 1.2 Main Crops and Supply Chains

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BRAZIL Law and Practice Contributed by: Domicio dos Santos Neto, Frederico Favacho, Henrique Erbolato and Fernando Ferreira, Santos Neto Advogados

agency directly subordinate to the Brazilian Ministry of Agriculture and Livestock. The SPA’s role includes: • developing policies for rural credit, marketing sup- port, storage and supply of agricultural products; • promoting studies, diagnoses and assessments of the effects of economic policy on agricultural production systems; • conducting the Rural Insurance Premium Subsidy Programme; and • preparing and disseminating the Agricultural Zoning of Climatic Risk and the Agricultural and Livestock Plan (PAP), which is a planning and man- agement instrument for public policies for Brazil- ian agriculture. The PAP consolidates government actions, programmes and guidelines for the sector, which are essential for decision-making by rural producers and other economic agents involved in agribusiness. Rural Credit and the Harvest Plan In terms of public policy for the promotion of Brazilian agriculture, the policies to highlight are Crédito Rural (Rural Credit), Plano Safra (the Harvest Plan) and the Agro Law, which regulates private investment. Rural credit is available to rural producers, family farmers, co-operatives and other entities linked to the sector, based on obligations imposed on financial institutions (public banks, private banks, credit unions) that oper- ate specific lines of financing such as PRONAF and PRONAMP, among others. The Harvest Plan is published annually and offers lines of credit, incentives and agricultural policies for medi- um and large producers at subsidised interest rates. 2.2 Agriculture-Sector Finance Brazil’s primary agricultural financing framework is rooted in the National Rural Credit System and enhanced by modern legislative milestones such as the “Agribusiness Law” (Law No 11.076/2004) and the package integrating the Economic Freedom Law and the Agribusiness Law (Law No 13.986/2020); it has fundamentally transformed how the country’s vast agricultural sector secures capital. The objective of this legal framework is to expand access to private investment by refining regulations governing the Rural Product Note ( Cédula de Produto Rural – CPR), which

is the primary instrument used by rural producers to raise private funds, as well as other financing vehicles such as FIAGROs, CRAs and FIDCs. In addition to streamlining traditional production financing operations backed by collateral such as land, crops and other assets, the new legislation also optimises the fundraising process for various initia- tives, including regenerative agriculture and environ- mental conservation and preservation, while intro- ducing significant changes to the sector’s financial operations and collateral arrangements. 2.3 Key Authorities and Supervisory Bodies Agricultural Authorities Agribusiness in Brazil is subject to a distributed regu- latory framework involving federal ministries, regula- tory agencies, public authorities and financial regula- tors. The Ministry of Agriculture and Livestock (MAPA) is the principal federal authority for agricultural policy and sectoral regulation, including matters relating to agricultural production, animal and plant health, agri- cultural inputs, agricultural policy, and the promotion of agribusiness. Financial and Capital Markets Regulators The Central Bank of Brazil ( Banco Central do Brasil – BCB) and the National Monetary Council ( Conselho Monetário Nacional – CMN) are particularly relevant to rural credit and agribusiness finance. The BCB co-ordinates and supervises compliance with the rural credit framework, while the CMN establishes the applicable regulatory rules through the Manual of The Brazilian Securities and Exchange Commission ( Comissão de Valores Mobiliários – CVM) regulates the capital markets structures used in agribusiness, including investment funds and securitisation struc- tures falling within its jurisdiction. The National Insti- tute for Colonization and Agrarian Reform ( Instituto Nacional de Colonização e Reforma Agrária – INCRA) is relevant to rural land ownership, registration and transactions involving foreign parties. Rural Credit and related resolutions. Land and Environmental Authorities Environmental regulation is referred to federal, state and local authorities, including the Brazilian Institute

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of Environment and Renewable Natural Resources ( Instituto Brasileiro do Meio Ambiente e dos Recur- sos Naturais Renováveis – IBAMA) and state environ- mental agencies, depending on the activity and the applicable allocation of competencies. ANVISA has responsibilities relating to health and food safety, and participates in the regulatory framework applicable to pesticides, together with MAPA and the environmental authorities. CONAB, a public company linked to the Ministry of Agrarian Development and Family Farming, contributes to agricultural market intelligence, public stocks, food supply policies and price support mechanisms. The regulatory framework is therefore decentralised, and the relevant authority depends on the nature of the activity or transaction. This is particularly important for transactions involving multiple aspects of agribusi- ness, where financial, land, environmental, health and commercial regulations may apply simultaneously. 2.4 Interaction With Other Areas of Law Agribusiness is a complex activity, ranging from rural production to the marketing of products, involving issues such as rural property and land use, contracts, environmental legislation and labour relations. In this sense, agribusiness relates to different aspects of the law: • agrarian law is the legal basis for agribusiness, regulating rural property, land use, leasing and rural credit, among other matters; • environmental law regulates pollution control, the use of pesticides and sustainable agricultural practices; • tax law regulates taxation on rural production and the marketing of products; • civil and commercial law regulates the purchase and sale of inputs, agricultural products and the structuring of business involving contracts and commercial relations; • labour law regulates the rights and duties for rural workers; • intellectual property rights regulate the ownership of new cultivars, seeds and agricultural products; and

• international law regulates the international trade of agricultural products.

3. Land Ownership, Use and Environmental Compliance 3.1 Rural Land Use Regulation

Constitutional, agrarian, environmental and land use regulations govern the use of rural land in Brazil. The Brazilian Constitution recognises the social function of property as a fundamental principle applicable to rural property, and rural land is subject to require- ments relating to its productive use, compliance with applicable environmental rules and the observance of labour and other social obligations. Rural land use is also subject to specific restrictions arising from environmental legislation, including rules governing Permanent Preservation Areas ( Áreas de Preservação Permanente – APPs), Legal Reserves and the conversion of native vegetation to alternative land uses. The Brazilian Forest Code (Law No 12,651/2012) establishes minimum Legal Reserve requirements, which vary according to the location and characteris- tics of the property, including higher requirements for properties located in the Legal Amazon. Depending on the location and nature of the activity, state and municipal regulations can also affect the use of rural land. In addition, specific requirements may apply to the use of water resources, vegetation suppression, environmental licensing, pesticides, and activities conducted in protected or strategically rel- evant areas. Non-compliance with applicable requirements may result in administrative sanctions, civil liability and, in certain circumstances, criminal liability. Rural proper- ties may also be subject to expropriation for social interest where the constitutional requirements relating to the social function of property are not complied with. 3.2 Foreign Ownership Restrictions Brazilian law imposes restrictions on the acquisition and leasing of rural land by foreign individuals and entities, and by certain Brazilian entities deemed

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