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					FINANCING JATROPHA
    DEVELOPMENT
   Antonio Tomás Parsons

   Cazenave & Asociados S.A.



                               1
    Our Approach on Financing Jatropha Development




1. A brief introduction on our company.




2. Our relationship with Jatropha




3. A cost benefit approach to financing Jatropha development.




                                                                2
                                                               The Company
   Founded in 1969

   Cazenave Creates and Manages ag-industrial business.

   Cazenave provides Managing, Consulting, product development and Auditing Services to:

                       agricultural    companies

                       ag-   industries

                       banks

                       insurance    companies

                       export   firms

                       other   ag-related companies




                                                                                            3
                           CAZENAVE & ASOCIADOS S.A.
•   FAID 2011                      Commoditie Production Trust
                                   Commoditie Production Trust
•   FIDEIAGRO 2009
                                  Bluberry Trust
•   Berries del NOA 2005
                                  Bluberry Trust
•   Berries del NOA 2007
                                  High Oleic Production Agreement with
•   High Oleic Sunflower              Farmers.
•   SAMSA                         Prod Girasol Alto Oleico Prod/Dow

•   CA (SAMSA)                    Commodities Production for Glencore
                                  Durum wheat production.
•   Trigo Candeal. Molinos
                                  Seed Royaltie Management
•   C&M
                                  Intersowing Canola and Soybeans
•   Research and Development
•   Patagonia Bioenergía          Biodiesel
•   Plant.a.Bío                   Jatropha R&D and Management in

•                                     Brazil
                                  Investment Projects
•   ASAP
                                  ASAGIR-MAIZAR-FPC (Crop
•   Institucionales                   Associations)
•   Farm management
                       Personel directly employed : 80 people
                       Invoicing: U$S / AÑO :337.420.000
                                                                         4
                  Plant.A.Bio Lda



CAZENAVE & ASOCIADOS S.A.

Background: Cazenave & Asociados (CASA), one of PlantaBio founders, is a leading agribusiness
management, consulting, and investment firm, established in 1969 in Buenos Aires, Argentina. With
thirty eights years of experience in the agribusiness industry, CASA is a well recognized authority
in the agribusiness field.




 Lartirigoyen y Compañia
 Managing 130,000 hectares in Argentina. Edible Oil Production




PHONEUTRIA BIOTECNOLOGIA. Genetics Company producing AND
analysis reactives.




                                                                                                      5
                  Plant.A.Bio Lda.




     A Company Located in Minas Gerais, Brazil.


Develops Jatropha Technology and Manages Plantations




                                                       6
Project Location: Non edible crops area




                                          7
  PATAGONIA BIOENERGIA Snapshot

            Overview                               Production Cost Comparison
                                   (US$ per ton)


 Patagonia Bioenergia S.A.                                    $1,006      $1,019
                                                                                     $1,109
                                                                                                  $1,167


  (“PBE”) is a San Lorenzo,                         $782


  Argentina-based
  development-stage biofuels
                                     $357




  company                          Argentina       Argentina   U.S. Soy   Malaysia     Brazil        EU


       • 250,000 Mtons/year
                                   Jatropha           Soy                  Palm         Soy       Rapeseed



         (MTPA) biodiesel
                                 Source: Credit Suisse estimates based on public company data and broker
                                 reports.


         plant currently under
         construction to come
         online by July 2008     Projected Jatropha plantation in
                                 Argentina and Paraguay: 40.000 ha.
       • Expansion capacity of
         an additional 250,000
         MTPA



                                                                                                             8
          Patagonia Bioenergia and Jatropha

In order to ensure feedstock PBE has started a number of
   activities.

• Starting a Nursery and a collection of Jatropha curcas and
  macrocarpa from different provenances.

• Plans to plant, with Cazenave's assistance, 40,000 hectares in
  Argentina and Paraguay.

• Is working on agreements with farmers providing equity, not
  loans, and effectively assuring feedstock for the future.




                                                                   9
Financing Alternatives. A Cost Benefit Approach

Within the various financing alternatives that will
benefit farmers, two approaches can be analyzed.
• Direct assistance providing seeds, agricultural
  chemicals, financing different costs and insuring a
  market for production.
• Developing improved genetic material, and superior
  crop husbandry practices.
A cost benefit analysis of each alternative will help to
establish priorities in the use of scarce available
financing.



                                                           10
               Production cost & Gross Margin

  Jatropha at 4 x 2 m Spacing Production Costs and Gross Margin

                                                                         Year Six
FIRST YEAR -
                     Unidade     Qtde       Times/ha   USD      USD/ha   USD/ha
  Lime aplication    USD/ha                    1,00     41,00    41
  Land Marking      Labour Day     0,81        1,00     13,50    11
  Digging piting    Labour Day     3,12        1,00     13,50    42
  Fertilizing       Labour Day     1,78        1,00     13,50    24        24
  Planting          Labour Day     1,74        1,05     13,50    25
  Spraying          Labour Day     3,50        2,00     13,50    95        95
  Lime                 kg         1000,00      1,00     0,09     90
  Fertilizer           Kg         150,00       1,00     0,45     68        68
  Ant Killer           Kg          6,00        1,00     5,30     32
  Fungicide             L          1,00        1,00     5,00      5         5
  Insecticide           L          1,00        1,00     15,00    15        15
  Weeding           Labour Day     3,12        3,00     13,50    42        42
  Saplings            Unid        1250,00      1,05     0,10     125
  Harvest              Hd                      1,00     23,00     0       104
  TOTAL Cost USD/ha                                              614      352
Yield Tons / ha                                                           4,00
Price Usd/ Ton          140,00                                            140
Income USD/HA                                                             560
Gross Margin USD/ha                                                       208
                                                                                    11
               Gross Margin Sensitivity Analysis



            Jatropha Gross Margin Sensitivity Analysis

                ITEM                        Gross Margin USD/ha                   Var %

Expected Yield, Cost and Price                             208                      0

      Yield Increase 50%                                   436                    110

      Price Increase 50%                                   558                     80

     Cost Decrease 50%                                     384                     32

     Yield and Price have, by far, a bigger impact on profit than direct costs.
        Since price is market dependant we must aim at improving yield.
                                                                                        12
 Impact Of Genetics & Crop Husbandry on Yield


  How much help can we expect from genetics?
• Experience shows us that with species with a short
  history in genetic development, the impact of
  selecting superior individuals from existing
  populations is far superior than that obtained by
  applying conventional genetics to readily available
  materials.

• Exotic crops introduced to a production area rarely
  can show the genetic variation that can be found
  where the species is originated.


                                                        13
 A good example is the differences in yield potential
 found in 20 years Soybean variety releases in Argentina,
 where soybean is not indigenous, (Ganancia Genética en Soja en
 Argentina entre 1980 y 2000, Diego Santos et all INTA Paraná May 2006),
 with those found in 60 Cristalino Colorado landraces of
 the INTA Pergamino Germoplasm Bank in Argentina,
 (Estudio de Variabilidad en Poblaciones Nativas de Maíz. Rafael Defacio et
 all INTA, Pergamino Buenos Aires 2005),   in South América
 where maize is indigenous.



INTA: National Institute of Agriculture Technology
                                                                              14
•In soybeans these studies reported a 14,4 kg/ha per
year yield increase due to genetics (0,7%), and a
further 8,6 kg per year due to environment, mainly
crop husbandry.


• In the 60 maize materials difference in yield were
470% (Maximum to minimum) with good climatic
conditions, and 597% with adverse, dry, weather.




                                                       15
• In Jatropha, large scale studies on yield due to
  genetic material and environmental conditions have
  yet to be developed.
• The scarce information at present available, indicates
  that important yield improvement could be obtained
  by selection and further genetic improvement.
• Scouting for different genetic material of an
  important number of provenances, is the first step
  towards obtaining superior individuals for immediate
  use through cloning and as a basis for a genetic
  improvement program.
• In Brazil Plant.a.Bio Ltda is developing a scouting
  program and in Argentina Patagonia Bioenergia is
  engaged in a similar one.
                                                           16
• The results of these programs, and other similar
  ones, the world over, would be enhanced by adequate
  financing and cooperation among international
  organizations and national, public and private,
  research centers and companies.

• Seed and cuttings, certified free from diseases, must
  be readily available for private and public research
  institutes and companies.




                                                          17
• Collections must be compared utilizing adequate
  tests with statistical analysis.



• Since Environment is responsible for great part of
  traits, a short cut in selection would be obtained by
  screening collection materials using molecular
  markers, in order to ensure diversity in compared
  materials.




                                                          18
    Some traits to be evaluated in collection trials

•   Yield
•   Increased oil in percent of dry seed weight
•   Oxidative stability of the oil and the fruit
•   Oil composition and quality (cetane number, iodine value,
•   cloud point, saponification number, etc…)
•   Fruit and seed size
•   Branching patterns.
•   The existence of male sterile individuals.
•   Number of fruit per inflorescence
•   Number of inflorescence per plant
•   Diterpen phorbol esters content
•   Curcin content




                                                                19
• Superior individual stock can be made available by
  cloning.

• Micropropagation, or tissue cultures, with the use of
  biorreactors would accelerate this process
  considerably.

• Training local personnel in the use of biorreactors and
  insuring the availability of adequate protocols will
  require financing.
• Plant.A.Bio’s tissue culture research is not at present
  complete and would benefit with agreements with
  other research centers.


                                                            20
 Once superior, genetically differentiated
 individuals, are detected and made available
to the scientific community, including private
 enterprise, conventional breeding programs
can be developed from an advantageous start
                     point.




                                                 21
     Financing research on Jatropha crop husbandry,
particularly on plant nutrition, would ensure sustainability
               and increase farmers income.

                           Jatropha
     Item          %     Yield and nutrient extraction Kg/ha
     Capsules     100       3930        5895        7860
     Seed          76       3000        4500        6000
     Water      0,8 to 6    134         200          267
     Nitrogen       6       236         354          472
     Phosphorous 1,13        44          67           89
     Potash       0,75       29          44           59
     Calcium      0,47       18          28           37
     Magnesium    0,78       31          46           61
                                                               22
• Recycling expeller cake adequately treated and enriched with a
  limited amount of elements would insure plant nutrition at low
  cost- It is also a clear pathway to sustainable agriculture. (We
  would be “Exporting” about half of captured CO2, and none of
  the nonrenewable nutrients).

• The cost of replacing nutrients extracted by a six ton seed crop
  with conventional inorganic fertilizers is above 300
  U$D/hectare.




                                                                     23
 Other research efforts, that, with the benefit of financing, would rapidly impact
                          on improving farmers income




• Research on Arbuscular Micorriza Fungi. This agent
  contributes by increasing the roots ability to extract
  nutrients, like Phosphorous and Potassium, that
  otherwise would be in the soil in unavailable forms.
• In Brazil the inoculation of Jatropha with this
  symbiotic agent is at present under study. (Fungos
  Micorrízicos Arbusculares em Plantios de Pinhão Manso, Jatropha
  curcas L. A.M.X Carvalho. XXXI Congreso Brasileiro de Ciencia do Solo,
  2007).
• In this report the author, as an antecedent leading to
  this study, quotes increases of 5% to 290% in yield of
  annual species, due to correct inoculation with
  Micorriza
                                                                                     24
    Research efforts that, with the benefit of financing,
    would rapidly impact on improving farmers income II



Research on other simbiotic or non simbiotic bioprimers
and bioprotectors.

•   Beauvaria sp.
•   Tricodermas,
•   Pseudomonas,
•   Azospirillum.




                                                            25
 Summary of Actvities with great potential of improving
        farmers wellbeing through financing.

• Scouting for superior materials.

• Ensuring availability of those materials to official and private
  research institutes and companies.

• Developing micropropagation tissue culture on a large scale.

• Development of environmental friendly plant nutrition.

• Working on symbiotic or non symbiotic microorganisms that
  favor plant nutrition and act as bioprotectors.




                                                                     26
  FINANCING JATROPHA DEVELOPMENT

Scarce financial resources should preferably be allotted
to research programs with greatest potential impact on
farmers income and welfare.

Agreements among international financing agencies and
official an private research centers and companies
would benefit farmers through a reduction in time
needed for research.

Agile and free circulation of information, technology
and disease free certified genetic material will be
conductive to obtaining results in a relatively short
lapse of time.                                             27
  THANK YOU !
   Antonio Tomás Parsons

atparsons@e-cazenave.com.ar




                              28

				
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