1. Investing in Production Agriculture in Western Bahia Stanley T. Stairs Stairs Dillenbeck Finley New York, NY stairs@stairsdillenbeck.com

2. 2 Background Commercial production agriculture is migrating from the northern hemisphere to the southern hemisphere Population pressure Environmental concerns Recreational pressure High land costs (subsidies) High production costs World demand for meat and grains is increasing Agribusiness must meet the demand for production of food and generation of energy

3. 3 Brazil 62 million hectares under cultivation An additional 90 million hectares of grazing land are suitable for cultivation, plus raw cerrado land By comparison, the U.S. has 131million hectares under cultivation Brazil is among the world leaders in agricultural commodity production for export (soy beans, cotton, corn, coffee, sugar cane, papaya, beef, poultry) Brazil: investment grade; low inflation and moderate growth

4. 4 Requirements Land Water Labor Management Technology Capital Equity Bank loans Seller financing Collateralized crop loans Infrastructure Ag Inputs and Equipment Favorable Legal Regime

5. 5 The Value Proposition: Cerrado Increasing world demand for food and fiber (China and India) Less expensive and available farmland Low cost production Consistent land appreciation (developed vs. undeveloped) Cash discounts GMO/Monsanto revolution favors large producers Portfolio diversification

6. 6 Why Western Bahia? Topography Water Rainfall (dryland farming) Wells and rivers (irrigation) Infrastructure Support facilities Commodities traders Ag input suppliers Equipment suppliers Reasonably priced and available farmland Quality of land titles

7. 7 Principal Risks Traditional farming risks Political and social risks Presidential and Congressional Elections in 2010 Environmentalists M.S.T. Tribal claims Anticipated opinion of Federal General Counsel Leftist political initiatives Investment guidelines? Political risk insurance Inadequate infrastructure Land title risks (title insurance?)

8. 8 Corporate Agribusiness vs. Entrepreneurial Farmers Multigrain Adecoagro SLC “Indiana Jones” Howell Farms International

9. 9 “If food is becoming the new fuel, then Brazil will become the next Saudi Arabia.” Roberto Rodrigues, former Agriculture Minister “The future of commercial agriculture is in Brazil. You can either join us for the photo session or wait to see the pictures when they are published in the history books.” Roberto Rodrigues, former Agriculture Minister Food for Thought