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BRASILAGRO – COMPANHIA BRASILEIRA DE PROPRIEDADES AGRÍCOLAS

Publicly-Held Company

Corporate Taxpayer ID (CNPJ/MF): 07.628.528/0001-59 Corporate Registry (NIRE): 35.300.326.237

MINUTES OF THE FISCAL COUNCIL’S MEETING HELD ON SEPTEMBER 3, 2010

Date, time and venue: The meeting was held on September 3, 2010, at 3:00 p.m., at the Company’s headquarters, located at Avenida Brigadeiro Faria Lima, 1309, 5º andar, in the City and State of São Paulo. Call Notice and Attendance: Messers. Renato Parreira Stetner, Breno Takeshi Miyahara Lara and Anthonny Dias dos Santos, sitting members of the Company’s Fiscal Council, attended the meeting. Mrs. Mariana F. de Souza Rezende was invited to attend the meeting to serve as secretary. Presiding: Chairman: Renato Parreira Stetner and Secretary: Mariana F. de Souza Rezende. Agenda: To analyze, discuss and remark on the Company’s Management Report and Financial Statements referring to the period ended June 30, 2010. Resolutions: After analyzing, examining and discussing the documents and information presented by the Company, and following clarifications provided by the Independent Auditors and Management over recent months, the members of the Fiscal Council issued the following report: 1. Pursuant to the Fiscal Council’s regulation and to legislation in effect, the Fiscal Council of Brasilagro Companhia Brasileira de Propriedades Agrícolas is primarily responsible for independently supervising the integrity of the financial statements in terms of their compliance with legal and regulatory requirements and of the performance, independence and quality of the Independent Audit, and is ultimately entrusted with submitting the annual financial statements and Management’s report, together with the Fiscal Council’s report, to the Annual Shareholders’ Meeting. 2. Assessments of the Fiscal Council were based on discussions and information received from Management, Independent Auditors, reviews of internal controls as a result of verifications, the work of Independent Auditors and Independent Auditors’ analyses. 3. Management is responsible for preparing the financial statements and establishing the procedures necessary to ensure the quality of processes that generate the information used to prepare the statements and reports. Management is also responsible for establishing and supervising the internal control system and monitoring its risks. In this sense, Management presented clarifications regarding tax payment of taxes according to Exhibit I hereto.

http://www.brasil-agro.com/brasilagro/web/conteudo_en.asp?idioma=1&tipo=20158&conta=44&id_arquivo=154146

http://www.brasil-agro.com/brasilagro/web/conteudo_en.asp?idioma=1&tipo=20158&conta=44&id_arquivo=154146

4. PricewatherhouseCoopers Auditores Independentes is responsible for auditing the Company’s financial statements and ensuring that all material aspects of the Company’s equity and financial position are duly presented pursuant to generally accepted Brazilian accounting practices and with the rules issued by the Brazilian Securities and Exchange Commission (CVM). 5. The following are notable activities pursued by the Fiscal Council, among others:

(a) Periodic meetings and other procedures when necessary, duly recorded in meeting

minutes, and the inclusion of Company departments, such as the Finance and Control Departments, and implementation of the Independent Auditors’ recommendations.

(b) Quarterly meetings to review the respective Quarterly Financial Statements (ITRs).

(c) Awareness of the Independent Auditors’ planning for fiscal year 2010, of the degree of relevance and areas of risk identified by the auditors, and of the results of audit procedures applied to the Company’s primary operations and the evidence obtained from such, including areas requiring attention and ongoing recommendations from detailed reports concerning such.

(d) The Fiscal Council met with the Independent Auditors specifically to obtain clarifications regarding the report on financial statements for the period ended June 30, 2010 and also to discuss other relevant matters detailed in Exhibit II hereto.

6. Final considerations.

To best comply with corporate-governance and due-diligence practices, the Fiscal Council releases the financial statements with the following notes:

Ownership and Environmental Status: The ownership and environmental status of the Company’s farms is essentially regular, with a level of pending issues that is in line with Brazilian rural lands in general. As detailed in Exhibit III hereto, the Company’s attorneys and consultants are handling these pending issues.

In addition, pursuant to Exhibit IV hereto, the Fiscal Council, by majority vote, has voted on the following, with one dissenting vote by Anthonny Dias dos Santos: The Consulting Agreement entered into between the Company and Paraná Consultora de Investimentos S.A. on March 15, 2006 was rigorously honored during the period ended June 30, 2010. Pursuant to the material fact published on July 26, 2010, the independent members of the Board of Directors, through its approved the proposal to rescind the agreement to be submitted to the shareholders at the Company’s Annual Shareholders’ Meeting. Regarding the terms of the Agreement, the Fiscal Council has voted as follows:

The Agreement was entered into on March 15, 2006, before the Company went public,

which occurred on April 28, 2006. In terms of the IPO, the Agreement and its importance to increase the feasibility of the Company’s business model were widely disclosed. Investors who chose to become Company shareholders did so fully aware of the Agreement and its impact on the Company’s financial situation. Additionally, an addendum was added to the Agreement on December 17, 2008 whose terms had been duly approved at the Shareholders’ Meeting held on November 14, 2008, with shareholders directly or indirectly related to Paraná not permitted to vote; consequently, the terms of the addendum in question were approved exclusively by minority shareholder votes. All necessary information regarding the agreement was always available to the Company’s investor and shareholders, who freely exercised their business judgment.

Based on the aforementioned reviews and discussions and on the detailed referenced works, the majority of the members of the Fiscal Council, with one dissenting vote by Anthonny Dias dos Santos, pursuant to Exhibit IV hereto, voted that Management’s report and financial statements for the period ended June 30, 2010 are adequate in all material aspects and it recommends they be forwarded to shareholders for resolution at the Annual Shareholders’ Meeting. Closure: As there were no further issues to be addressed, these minutes were drawn up, approved and signed by all members of the Board of Directors in attendance.

São Paulo, September 3, 2010.

______________________________

Renato Parreira Stetner Chairman

______________________________

Mariana F. de Souza Rezende Secretary

______________________________ Renato Parreira Stetner

______________________________ Anthonny Dias dos Santos

______________________________ Breno Takeshi Miyahara Lara

EXHIBIT I

TO THE MINUTES OF BRASILAGRO - COMPANHIA BRASILEIRA DE

PROPRIEDADES AGRÍCOLAS FISCAL COUNCIL’S MEETING

HELD ON SEPTEMBER 3, 2010.

Management’s responses to the questions posed by the Fiscal Council regarding taxes for the

period ended June 30, 2010:

1. Which taxes are you liable to pay according to calculations and the application of

legislation in effect?

Federal (Income Tax, Social Contribution, Rural Land Tax, Rural Fund), state (Value-

Added Tax) and municipal (Municipal Real Estate Tax) taxes.

2. Do you fully comply with the current regulations in calculating these taxes?

Yes, we comply with regulations in calculating these taxes.

3. In controversial cases, do you consult internal and external attorneys?

We retain the services of Luiz Paes and PwC.

4. Are taxes, tax offsets, social contributions and tax incentives handled according to the

best accounting practices and to current legislation? If not, what are the disparities

between the Company’s practices and provisions set forth in the legislation? What

explanations does Management present?

We apply the best market practices.

We follow the Income Tax Regulation to apply accounting practices for Corporate

Income Tax, Social Contribution on Net Income, and withholding and deferred taxes.

We also use the regulations of each state or city in which we operate for direct taxes,

such as the Value-Added Tax and Service Tax.

EXHIBIT II


PROPRIEDADES AGRÍCOLAS FISCAL COUNCIL'S MEETING


Pricewaterhousecoopers Auditores Independentes’ Independent Auditor Mr. Wander

Rodrigues Teles’s responses to the questions posed by the Fiscal Council:

1. Did you face any restriction to the scope of your work?

We did not face any restriction to the scope of our work performed in the period ended

June 30, 2010.

2. Were internal and managerial controls considered adequate?

Yes. We visited Araucária and Cremaq Farms, and we evaluated their internal

controls, with no exceptions.

3. Are generally accepted accounting practices applicable to all material aspects of the

analyzed financial statements?

Yes, they are.

4. Were contingencies evaluated correctly, including with regard to confirmations from

attorneys handling the cases?

Yes, we requested confirmation from all attorneys, and their responses were evaluated.

This result was compared to the amount reported, with no exceptions, and no relevant

exposure was found regarding contingencies.

5. Has the senior reviser completed his/her review? If so, was any additional

explanation/analysis required?

No, the review is under way and should be completed by August 27.

6. Did those officers responsible for the financial statements ensure that such were

properly prepared?

In a forthcoming letter on behalf of Management, the Management will ensure that the

financial statements were properly prepared.

7. Are taxes, tax offsets, social contributions and tax incentives handled according to the

best accounting practices and to current legislation? If not, what are the disparities

between the Company’s practices and provisions set forth in the legislation? What

explanations does Management present?

Yes, they are. There are no relevant tax incentives applicable to the Company.

8. Were credits from income tax and social contribution duly recognized, that is only in

cases where credits were deemed as probable?

Yes, they were. To that end, there is a management plan to recover these taxes which

is being discussed and monitored by PwC.

9. Did you meet the conditions to record deferred income tax and social contribution

from temporary differences and tax loss carryforwards?

Yes, we did.

10. Did the independent auditor duly analyze all derivative operations? Were all their

effects, depending on evaluation, duly taken into consideration and handled according

to generally accepted accounting principles?

Yes. Currently, derivative operation amounts are not significant, but we acknowledged

and evaluated the reported operations. As in the previous year, the Company does not

use hedge accounting (that is to say variations in the instruments’ fair value are

recorded on a monthly basis). Additionally, we confirmed with financial institutions

with which the Company operates, and no additional operations were identified other

than those reported.

11. Were the payments to Paraná Consultoria de Investimentos duly made?

Yes, they were.

12. Are there any adjustments to make?

Yes, but the amounts are immaterial (approximately R$700,000)

EXHIBIT III




Report on the status of real estate registers and environmental reserves corresponding

to the Company’s lands.

Report on the environmental situation of the Company’s lands.

EXHIBIT IV




One dissenting vote by Anthonny Dias dos Santos.

Report on the Environmental Status of Farms (Licenses, grants, etc)

FARM PROCESS AGENCY STATUS PROTOCOL No. DATEESTIMATED

DATE

DEADLINE

(DAYS)REMARKS

Sole Environmental

License

(LAU)

SEMAIn progress

(Partially)

105.469/2005

105.726/2005

105.763/2005

2005 - -LAU in progress by Katayama.

SEMA: awaiting reports from SEMA-MT

inspection (5/05/2010).

Degraded Area

Recovery Plan

(PRAD)

SEMA/

Prosecutor

Office

In progress

Conduct Adjustment

Term (TAC)

SEMA/

Prosecutor

Office

In progress

Exemption from

Operating License

(LO)

Issued 9.984/2010 06/10/2010 Issued

Deforestation

LicenseStopped - - - -

Awaiting reply and submission of

proposal/budget

Well Concession Started - - - -Collecting documents to submit protocol

to SEMARH

Plant Highway - Stopped - - - -

The highway stretch is being redefined

to avoid neighboring areas; Confirm

areas' value and forest type to be

deforested; Provide technical project

prior to bridge - suspending the

environmental feasibility study.TAC / PRAD IBAMA In progress 046/08 11/28/08 11/28/11 - Regular.

Chaparral

Forestry (License

for Forest Clearing

(ASV) + Consent to

Lease Legal

Reserve)

IMA Filed (In progress) 2009-012364/TEC/ASV-0696 3/26/09 7/26/09 120Awaiting inventory conclusion ASV;

Milaré's report sent to IMA's PROJU.

Operating License

(LO)

(Oper.+ Harvest

10/11)

Filed (In progress) 2009-012485/TEC/LO-0043 3/27/09 9/27/09 180*

Official letter filed to adjust area to be

licensed (LO); Official letter filed

together with copy of ASV process;

Awaiting IMA to release TR of

environment study.

Location License

(LL)Initiated - - - -

We are arranging a map and petitions,

satellite imaging and documents.

Subsequently, formalize IMA process,

noting inventories have already begun

to be taken and the Environmental

Management Program (PGA) is under

way.

Alto Taquari

- 12/01/2008 12/31/13

Araucária

SEMARH

No maturity

-

Chaparral

IMA

Well Concession INGA Filed (In progress)

Proc. nº 8.737/07

Proc. nº 6.838/07

Proc. nº 7.550/08

- - - Awaiting copy of process.

Well Concession INGA Renewal in progress

Proc. Nº 2.504/01-SEM

(Irrigation Grant 250m³/h)

Proc. 7.550/08

12/24/06

In process of changing ownership to

Brasilagro (CH).

TCA Finished - 10/09/2009

Larissa:

. Awaiting municipal SEMMARH

ordinance which deals with the

agreement executed.

. Published in Official Gazette on

6/29/10Defense - Notice

No. 0003, series CIn progress - 06/10/2010 - - André/ Larissa: negotiate new TAC.

TCA In progress - - - -Larissa: Forward SEMMARH Draft and

publish it on Official Gazette

CremaqOperating License

(LO)SEMAR Filed (In progress) 3.352/08 7/23/08 1/23/09 180

LO: Estim.: approx. 30 days.

Awaiting definition of area reg. 113 and

40 to adjust LO.

Demonstrate legality reg. 113 and 40 -

INTERPI. Area removed from Licenses/

Permits.

Awaiting definition.Deforestation

LicenseSEMAR Issued 01.00103-09 10/15/09

Issued - PENDING inclusion of area

reg. 113 and 40 (Luchesi).

Federal Technical

Registration (CTF)IBAMA In progress - - - -

Awaiting (tax) password to proceed with

yard registration (fiscal).

Definite Grant Issued1.020/09

1.021/09- - -

Silo License - - - - - Awaiting LO issuance

Displacement Legal

ReserveUnder assembly - - - -

In process of preparing relocation

project; design maps of Before and

After of the relocation RL

Term: 4 years = 12/24/2010

-

Cremaq

Term: 10/15/10

SEMAR

Chaparral SEMMARH

Chaparral

Operating License Issued 334/2010 06/04/2010

Location License -

LLNot initiated - - - -

Issued 0047/2008 3/14/08

Ref. area 1,660.00 ha

Awaiting ASV petition and response of

conditions.

. Verify how and if possible to renew

past-due Deforestation License.

In progress - - - -

Issuance within 30 days, referring to

regularization of deforested area

2,120.00 ha.; Obtain protocol number

In progress - - - -

Issuance within 30 days, referring to

area of 2,367.00 ha; Obtain protocol

number

Well Concession Not initiated - - - -

Incident Report -

FireIn progress - - - -

We submitted the incident report and

pictures from affected areas, as well as

maps and satellite images for defense;

We will prepare a technical complaint to

be filed with the SEMA-MA

Operating License

(LO)

(A=10,565.67 ha)

IMAFiled

(In progress)2009-018588/TEC/LO-0075 07/06/2009 01/06/2010 180*

Send CD with inspection pictures to

IMA; Obtain copy of the inspection

report

Location License

(A=4,876.71 ha)IMA Under assembly - - - -

To do:

. LL map

. Descriptive petition

. Formalize IMA process.

IMA: Finishing inspection report

Forest Clearing

(A=4,876.61 ha)IBAMA In progress 02006-001563/07-75 9/17/07 3/17/08 180

Agreed: IBAMA needs LL to issue UAS

Permit

Coal License (rend.)IMA/

CEPRAMIn progress - -

Furnace LicenseIMA/

CEPRAMIn progress - - - -

Irrigation Grant INGA Completed7.562/08

(Grant 4,000m³/h)6/14/09 Awaiting copy of processes.

Horizontina SEMAR

Jatobá

-

Term: 2 years = 6/14/2011

Term: 5/11/2012

Forest Clearing

Term: 3/14/2009

Horizontina SEMAR

Operating License

(A=3,064 ha)SUPRAM Filed (In progress) 18056/2009/001/2010 - - -

Obtain ICMBio consent; Obtain

inspection conditions; Obtain pending

issues (Notice)

Prior License,

Location License,

Operating License

(A= remaining)

SUPRAM Under assembly - - - -

Forest Clearing

(A=remaining)SUPRAM Under assembly - - - -

Estimated protocol depends on the

Legal Reserve map.

Obtain consent / certificate State Forest

Institute (register remaining process and

present it to prosecutor).

Well Concession IGAM Filed 015954/2009 - - -

IMA Issued - - Ok

IBAMA Filed2009-035455/TEC/DASV-

018112/17/09 5/17/10 180

IBAMA: process returned to Barreiras

for inspection.

Forestry (ASV) IMA/ IBAMA Not initiated - - - -

RVFRIMA/

CEPRAMNot initiated - - - -

LS Extensive Cattle

RaisingIMA Issued IMA Ordinance No. 12.815 5/20/10

Well Concession INGA Issued INGA Ordinance No. 311/2010 4/23/10

Extension of

Simplified License -

Cattle Raising

(SC)

Not initiated - - - -

ASV (PR) Not initiated - - - -

AQC Under assembly - - - -

. Prepare process.

. Collect documents

IMA/ Joselice: forward guide

Deforestation Information Register (RCI)

and Controlled Burning Authorization

(AQC).Relocation RL - - - - - Not to be pursued at this time

Waiver of LO SEMA - - - - - Confirm need for LO License.

Official Notice/

InjunctionIBAMA In progress

We sent the official notice and now we

await IBAMA's decision

Inspection INCRA CompletedINCRA's acknowledgement of the farm

as a Large Production Property

* Counting commenced subsequent to process' additional EIA / RIMA protocol.

São Pedro

Nova Buriti

Nova Buriti

PreferênciaForestry (Exemption

from ASV)

Preferência

Term: 3 years = 5/20/2013

Term: 1 year = 4/23/2011

IMA

Registration Registered area Total real estate area* Registered Legal Reserve

% of legal reserve based

on total real estate area * Onus and encumbrances Ownership Status

ARAUCÁRIA FARM 9682.4164 ha 20.94%

Babilônia Farm 19964 9,342.3464 ha Yes - 1868,69,13 ha

Morrinhos Farm 21433 340.07 ha Yes - 159,07 ha




CHAPARRAL FARM 37,181.88 ha 7.439,3636 ha = 20%

São João Farm 6267 7,000.0000 ha No None

Brejo Verde Farm 6253 2,000.0000 ha No None

Brejo Verde 2 Farm 6252 500.0000 ha Yes - 100 ha None

Brejo Verde 3 Farm 6251 1712.4994 ha No None

Brejo Verde Farm - Part I 6256 500.0000 ha No None

Cachoeira Farm 6405 10,000.0000 ha No None

Cachoeira II Farm 6413 2,561.6814 ha No

There is a lawsuit to cancel the transfer

of ownership of this property (Court

Records no. 277/2009 - district of

Correntina, state of Bahia; see

attorneys' report)

Chaparral Farm 6255 652.9700 ha Yes - 130.60 ha None

Chaparral I Farm 6254 4,900.0000 ha No None

Chaparral II Farm 6249 686,8000 ha Yes - 140 ha None

Chaparral II _ 1 Farm 6257 3,600.0000 ha No None

Fazenda Chaparral III 6462 3,000.0000 ha No None




PREFERÊNCIA FARM 16.830 ha 20%

Preferência Farm 20200 6,000.0000 ha Yes - 1,200ha None

Sanconrado Farm 5798 10,830.0000 ha Yes - 2,166ha None

All properties are registered under the

Company's name.

1- All properties are registered under

the Company's name; 2- Although

some properties have a registered legal

reserve, this information does not

reflect the farm's reality, since the

current legal reserve is under location

approval review before the

environmental agency (see attorneys'

report from Milaré law firm )


Company's name.

REPORT OF THE STATUS OF THE REAL ESTATE AND ENVIRONMENTAL RESERVES OF THE COMPANY'S PROPERTIES




CREMAQ FARM 32.702,4390 ha 27.80%

Bumerangue Farm 91 2,650.0000 ha Yes - 1862.34ha Yes - BNB Mortgage

Cacimba Farm 2579 40.0000 ha

Yes - See registration

91/40/113/868/1578 None

Cajufrutos Farm (Buriti Torto) 40 602.6501 ha Legal Reserve Area None

Cajufrutos Farm 113 4,173.2500 ha Legal Reserve Area None

Cajufrutos Farm (Caximbo) 868 426.8749 ha Legal Reserve Area None

Cajufrutos Farm 1578 10,227.0000 ha Yes - 2,055.40ha None

Cajufrutos II Farm 2570 2,604.5500 ha


91/40/113/868/1578 None

Chapada do Caju I Farm 2569 1,210.4610 ha


91/40/113/868/1578 None

Chapada do Caju II Farm 2567 39.8488 ha


91/40/113/868/1578 None

Chapada do Caju I Farm 2382 1,250.0000 ha


91/40/113/868/1578 None

Jatobá I Farm 2381 1,250.0000 ha


91/40/113/868/1578 Yes - BNB Mortgage

Jatobá Farm 2571 1,299.3190 ha


91/40/113/868/1578 Yes - BNB Mortgage

Jatobá Farm (Dividido Farm) / Ipê Farm 2568 40.0000 ha


91/40/113/868/1578 Yes - BNB Mortgage

Sol Nascente I / II Farm 2379 961.5000 ha


91/40/113/868/1578 Yes - BNB Mortgage

Sol Nascente I / II Farm 2566 934.8280 ha


91/40/113/868/1578 Yes - BNB Mortgage

Sol Nascente III Farm 2572 39.9752 ha


91/40/113/868/1578 Yes - BNB Mortgage

Volta Grande I Farm 2380 1,250.0000 ha


91/40/113/868/1578 Yes - BNB Mortgage

Volta Grande III Farm (Condomínio Farm) 2551 40.0000 ha


91/40/113/868/1578 Yes - BNB Mortgage

Volta Grande II Farm (Condomínio Farm) 2552 1,112.3410 ha


91/40/113/868/1578 Yes - BNB Mortgage




ALTO TAQUARI FARM 5266,09

Araçatuba Farm 10138 763.7000 ha No None

Amparo Farm 826 893.6000 ha Yes - See registration 20817 None

Ariranha Farm 10136 611.1000 ha No None

Barra Funda Farm 823 302.4000 ha Yes - See registration 20818 None

Esperança Farm 822 329.1000 ha Yes - See registration 20816 None

Morro Farm 10137 340.1000 ha No None

Morro I Farm 825 549.6000 ha Yes - See registration 20817 None

Pinguim Farm 824 607.3000 ha Yes - See registration 20817 None

Suporte Farm 285 200.0000 ha Yes - See registration 20820 None

Legal Reserve Area 1382 70 ha LR offset of registration 822 None

Legal Reserve Area 1383 358.1288 ha

LR offset of registration 824 /

825 / 826 None

Legal Reserve Area 1384 60.6231 ha LR offset of registration 823 None

Legal Reserve Area 1385 100 ha LR offset of registration 285 None


Company's name.

Property has not yet been transferred to

the Company due to the fact that the

Seller has yet to present the registration

georeference, a process currently under

way with the INCRA; According to

information provided by Katayama, the

georeference at INCRA is pending with

regards to the legalization of the legal

reserve. The legalization procedure is

currently before the SEMA, awaiting the

issuance of a certificate of approval.

The farm still does not have the reserve

index required by law, and that is why

Katayama is regularizing this situation.




JATOBÁ FARM 31605,8716 ha 20.03%

Jatobá IV Farm 5,202 31605.8716 ha Yes - 6333.0832 ha None




FAZENDA NOVA BURITI 24.190,7002 ha

Fazenda Buriti 14033 30,637.00 ha None

13237 1,299.31 ha None

12221 1,556.00 ha None

Vale do Cocha Farm 18395 3,064.0269 ha Yes - 600ha 20% None




SÃO PEDRO FARM 2447,2925 ha 20.00%

São Pedro cattle and crop raising 20644 2,447.2925 ha Yes - 489.1ha None




HORIZONTINA FARM 14.358,5322 ha

Horizontina Leste III 1745 1,475.1465 ha No None

Horizontina Leste I e II 1744 12,883.3857 ha Yes - 3477.95 ha 26% None

* Approximate amounts

The farm was not transferred to the

Company; however, the 1st Addendum

to the Purchase and Sale Agreement

was approved and it obligates the seller

to grant the Farm's deed no later than

September 30, 2010;

Vale do Cocha Farm is already has not

yet been transferred to the Company

due to the fact that the Seller has yet to

present the georeference of the area we

purchased with these 3 registrations

(14,021.3633 + 4,250 ha of registration

14,033 and the entirety of registrations

12,221 and 13,237) - The Georeference

process is duly under way at INCRA.

Awaiting issuance of certificates from

the federal agency.

Note: Property duly registered under the

Company's name.

Recently purchased farm, pending the

final payment installment, subject to

presentation of the final deed of

purchase and sale by the Sellers. For

that purpose, we are awaiting the estate

inventory from the former owner or the

court order that authorizes the estate to

sell the property in question, as well as

the presentation of all certificates

required by law for the transfer of

property ownership to the Company.

São Paulo, July 22, 2010

- 1 -

São Paulo, September 3, 2010.

STATEMENT OF DISSENTING VOTE – FISCAL COUNCIL‟S REPORT

As a member of the Fiscal Council of Brasilagro – Companhia de Propriedades Agrícolas

(“Brasilagro” or “company”), before the honorable members, officers and shareholders of this

Company, I hereby express my opinion on Management‟s annual report, and for the record provide

additional information that I deem necessary and useful for the shareholders‟ meeting vote, and

vote on the financial statements to June 30, 2010 (“fiscal year”), pursuant to article 163 of the

Corporation Law.

I – ADDITIONAL INFORMATION

On August 11, 2010, I sent a letter to the Company‟s Management (“Letter”) with my legal

considerations regarding the consulting agreement (“Agreement”) entered into between the

Brasilagro and Paraná Consultora de Investimentos S/A (“Paraná”), wherein I requested

clarifications and also suggested that the Company‟s Management endeavor to obtain reimbursement

of the amount paid to Paraná during this fiscal year, and also to avoid payment of the fine if the

shareholders„ meeting of Brasilagro were to choose to rescind the Agreement, underscoring the fact

that Brasilagro would not pay any fine were Paraná to effect said rescission.

I also take this opportunity to express my considerations to Management concerning the consulting

agreement entered into between Paraná and Brasilagro.

I.I – SUMMARY OF FACTS INVOLVING THE TRANSACTION BETWEEN THE

BRASILAGRO E PARANÁ

Pursuant to its Bylaws/Articles of Incorporation, the corporate purpose of BrasilAgro is to explore

opportunities in agricultural production and in real estate appreciation, which is similar to the

purpose set forth in the Agreement entered into between Paraná and Brasilagro.

Paraná is the Company‟s related party, due to the fact that Paraná is owned by Brasilagro‟s controlling

shareholders.

Pursuant to agreement entered into between the related parties, Brasilagro agreed to a once-yearly

payment of the fees for Paraná‟s consulting service, calculated based on BrasilAgro‟s paid-in capital,

which corresponds to 1% of the Company‟s paid-in capital stock as calculated on June 30, 2006,

duly restated.

The term of the agreement is indefinite and the agreement may be terminated without just cause by

either party. If Brasilagro rescinds the agreement, the Company must pay a fine (“fine”) to Paraná

totaling R$4,316,000.00, duly restated, on the payment date. However, if Paraná rescinds the

agreement, with or without just cause, no amount shall be paid to BrasilAgro upon termination.

Also pursuant to the agreement, either party may rescind the agreement with just cause but, if

BrasilAgro is deemed liable for such, the Company shall pay the aforementioned fine to Paraná, which

shall not occur if the cause is attributed to Paraná. It is worth noting that if Brasilagro wishes to

terminate the agreement with just cause, Paraná shall not be charged any fine; and if Brasilagro wishes

to rescind the Agreement without cause, it shall compensate Paraná. However, if Paraná terminates the

Agreement with just cause, Brasilagro shall compensate Paraná; and if Paraná wishes to rescind the

agreement without cause, it shall not be charged any fine.

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I.II – COMMON PURPOSE – DUTY/FUNCTION OF CONTROLLING SHAREHOLDER

The first fact that stands out in the agreement between Brasilagro and Paraná is that the

shareholders of Paraná are Brasilagro‟s controlling shareholders and officers.

The legislation sets forth the controlling shareholder‟s function and duties in the sole paragraph of

article 116 of the Brazilian Corporation Law, The law sets forth that the controlling shareholder must

use his authority to “enable the Company to fulfill its purpose and achieve its corporate goals.

The controlling shareholder also has duties and responsibilities to the company’s other

shareholders and employees and to the community in which it operates, whose rights and

interests the controlling shareholder must genuinely respect and meet.”

It is clear that the controlling shareholder has the legal function/duty to enable the company fulfill its

purpose and achieve its corporate goals; therefore, the fact that the Company has contracted a

consulting company owned by Brasilagro‟s controlling shareholder and some of its officers, who

already had the legal duty to fulfill Brasilagro‟s corporate purpose, may be considered against the

law. By contracting the same corporate purpose, which the controlling shareholder is obligated to

fulfill, the controlling shareholder may be acting against the law since the agreement itself may be

considered unnecessary.

I.III - LACK OF EQUITY IN THE RELATIONSHIP BETWEEN THE RELATED

PARTIES HEREIN

The fine set forth in the agreement for rescission purposes, which is beneficial only to Paraná,

demonstrates the agreement‟s unbalanced nature, and consequently, lack of equity in this transaction

between the related parties, considering that said fine is excessively onerous to Brasilagro.

In addition to the fine, the obligation that Brasilagro has to pay the agreed amount, regardless the

results obtained from the relationship, is another point that is considered unequal. Regardless of the

result of the consulting services rendered by its own controlling shareholders, Brasilagro must

continue to pay the amount equivalent to one per cent (1%) of the Company‟s capital stock,

regardless of the amount of net equity. It is also worth mentioning that the fees paid in advance by the

Company to Paraná in August 2009, referring to the year ended June 30, 2010, amounted to

R$6,749,601.41, that is almost R$7 million was paid to the controlling shareholder by a company

that recorded, in the current fiscal year, a loss of R$15,834,000.00. Moreover, pursuant to the

agreement, should Brasilagro not see any results from the relationship with the related party, the

Company may rescind the agreement only if it pays a fine currently corresponding to over

R$5,000,000.00.

I.IV – COMPLIANCE OF THE CONTRACTUAL RELATION IN QUESTION WITH LAW

No. 6404/76

Article 117 of the Brazilian Corporation Law sets forth one of the acts classified as illegal under the

1976 legislation, which is the abuse of power. Said rule serves as an example1 and implies many

other cases, namely: guiding the company towards a purpose other than its corporate purpose or one

that jeopardizes national interest, or leading the company to favor another company to the detriment of

the minority shareholders‟ interest in the company's profits or equity, or to the domestic economy.

1 Professor Fran Martins understands that the rule serves as an example. The honorable Professor states that the Legal

Justification is clear in stating: “By illustrating the most common forms of abusive exercise of power in article 117, the law does not

exclude other cases, which precedent and the application of law must duly evidence.” (sic) Cf. in Comentários à Lei das S.A., p. 103.

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Pursuant to legislation, corporate illegality occurs when he controlling shareholder violates the

duty/power set forth in the sole paragraph of article 116 of the Brazilian Corporate Law. Hence, the

article reads as follows:

“The controlling shareholder must use its authority to enable the Company to

fulfill its purpose and achieve its corporate goals. The controlling shareholder

also has duties and responsibilities to the company‟s other shareholders and

employees and to the community in which it operates, whose rights and interests

the controlling shareholder must genuinely respect and meet”

From the categories of abusive of power set forth in paragraph 1 of said article 117 of the Brazilian

Corporation Law, items (a) and (f) are significant for the purposes of this study. Item (a) includes: to

lead the company to favor another Brazilian or foreign company to the detriment of the minority

shareholders in the company‟s profits or equity. On the other hand, item (f) includes: to contract the

company, directly or through a third party, or through a company in which it holds interest, under

conditions that are biased or not equal.

Both aforementioned assumptions determine that operations involving related parties, mainly the

controlling shareholder, must observe strictly equal conditions or proper compensation.

Under the first assumption, the controlling shareholders‟ action is not deemed fair if the operation‟s

outcome is less advantageous to the company than it would have been had the operation been carried

out by an independent party, without conflict of interest. Under the second assumption, the

controlling shareholders‟ action is not deemed fair if the operation‟s outcome is less advantageous to

the company than it would have been had the operation been carried out in the market by independent

agents2.

By analyzing the agreement in question, we can assume that the agreement has not observed the

“strictly mutual conditions” to which the legislation refers; thus, the agreement does not pass the

aforementioned fairness tests, which leads one to conclude that the contracted in disregard to

standards generally adopted in the market for similar transactions, and it would have not been

signed were the parties independent.

I.V – EFFECTS OF THE RELATIONSHIP ANALYZED HEREIN

Although the Company‟s independent Board Members have already approved the proposal to

rescind the agreement referred to herein, as published by the Company on July 26 2010 and to be

submitted to Brasilagro‟s shareholders‟ meeting, the agreement has already affected the Company‟s

financial statements, which the Fiscal Council has examined and commented on.

It is unquestionable that the financial statements were negatively impacted by the expense referring

to the amount of R$6,749,601.41 paid to Paraná, recorded in the financial statements, based on the

2 “Unfairness in a self-dealing transaction may be identified in one or both of two related ways: by comparison of the transaction to a

hypothetical other-dealing transaction or by comparison to actual transaction in a well-functioning competitive market. Thus, a

self-dealing transaction is unfair to the referent corporation or of group of investors if the outcome to them is less advantageous than the outcome would have been if the transaction had been agreed to, on their behalf, by a rational, well-informed decision maker who was

independent and loyal, that is, not affected by a conflict of interest. This is the arms‟ –length bargain comparison. It is a hypothetical

exercise, but it is very useful when unquestionably comparable market data are not available. Alternatively, or in addition, a self-dealing transaction is often adjudged unfair to the referent corporation or group of investors if the outcome to them is less advantageous than the

outcome of clearly comparable transactions between independent parties in a reasonably competitive market. This is the competitive market

comparison”. (in Robert Charles Clark, Corporate Law, LB, Boston-Toronto, 1986, p. 147).

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monthly accounting of the item in the amount of R$562,466.78.

I.VI – MANAGEMENT’S REPLY

As previously explained, I received a reply letter from Management last night and, in my opinion,

the answers were not convincing and explanatory enough to change the essence of the

aforementioned considerations.

Management justifies that the agreement has been essential to legally establish Brasilagro given the

need for qualified and experienced consultants with a extensive technical knowledge in the market in

which the Company operates in a Company initially created with no previous structure.

However, Management does not respond to the point raised in item I.II above, thus not explaining the

(il)legality of the fact that its own controlling shareholder contracted a company with the same

corporate purpose in the light of its legal duty/power pursuant to sole paragraph of article 116 of

the Brazilian Corporation Law.

With regards to the contractual inequality described in item I.III above, Management has not

justified the questionable clauses, which are (i) the one establishing a rescissory fine only for

Brasilagro; and (ii) the one adjusting the fixed amount, related to the Company‟s capital stock, to be

paid to Paraná regardless of the financial results reported by Paraná. Management only stated that it

understood the Agreement had been entered into under mutually equal terms.

I.VII – SUGGESTIONS PRESENTED BY ME

Bear in mind that, as a Board member, I suggested the Company‟s Management endeavor (i) to

seek reimbursement of the amounts paid to Paraná in the period ending June 30, 2010; and (ii) to avoid

payment of a possible fine to Paraná.

The Company‟s Management did not accept my suggestions presented in the foregoing paragraph,

thus alleging that the agreement is legal and valid. It is also worth highlighting that, with regards to

item (ii) above, a simple act to rescind the agreement initiated by Paraná would be enough to avoid

payment of the fine. Furthermore, with regards to item (i), reimbursement from Paraná could serve as a

“waiver” of the already received amount.

II - CONCLUSION

In the light of the foregoing, I hereby cast my vote regarding the Fiscal Council Report, pursuant to the

information expressed herein, which I deem necessary and useful for the vote to be made at the annual

shareholders‟ meeting to examine the financial statements referring to the period ended June 30, 2010.

I also hereby express my disagreement with the financial statements presented, given the

R$6,749,601.41 I considered unjustifiably paid to Paraná.

I further underscore that this is my individual opinion, to the best of my knowledge and belief.

Sincerely,

Anthonny Dias dos Santos OAB/RJ 114019

CRC/RJ 094837/O-7

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