Despite Brazil having made great strides in reducing logging in the Amazon region, a US study says the country faces a renewed threat to its forests.
The report’s authors − who focused on the Amazon states of Mato Grosso and Pará, where they interviewed ranchers and meat processors − say the cost of raising beef cattle is prompting many ranchers to consider switching to crops such as palm oil.
The study by Datu Research, a global economic research firm based in Washington DC was commissioned by the Environmental Defense Fund.
After decades of deforestation, it says, efforts to curb the losses have been working. Between 2005 and 2013, the rate of loss fell by nearly 80 per cent − although the Brazilian government’s figures show that losses rose again by 29 per cent in the year to 31 July 2013.
The beef industry, meanwhile, which had caused nearly 75 per cent of earlier deforestation, has continued to grow rapidly.
Curb on emissions
Researchers have argued that by taxing cattle on conventional pasture and by subsidising semi-intensive cattle rearing, Brazil could curb up to 26 per cent of the global greenhouse gas (GHG) emissions caused by the loss of forests. This in turn adds up to about one-fifth of all human-caused GHG emissions.
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Pressure from Western companies requiring deforestation-free supply chains for beef from the Amazon risks being overwhelmed by big increases in demand from non-Western countries
But the forests face problems from another quarter. The authors of the Datu Research study say pressure from Western companies requiring deforestation-free supply chains for beef from the Amazon risks being overwhelmed by big increases in demand from non-Western countries.
Russia’s recent embargo of Western beef, for example, means it has increased its demand for Brazilian beef by over 10 per cent, creating alternative markets that do not require deforestation-free operations.
The amalgamation of the meat processors has reduced the ranchers’ bargaining power. The market share of the three largest processors − JBS, Marfrig and Minerva − grew from 24 per cent in 2011 to 37 per cent in 2013.
The study’s authors also say many small and medium-size processors report that, unlike their big competitors, they have restricted access to finance, which reduces their ability to monitor deforestation.
Poor regulation of cattle-raising is another problem − expensive for those ranchers who comply with the rules, yet allowing those who ignore them to escape with impunity. Licensing agencies sometimes lose entire applications, and illicit cattle operations can still enter legitimate supply chains.
It is not difficult, the report says, to circumvent a system that is meant to track cattle from ranch to slaughterhouse. Falsified documents showing the origin and destination of cattle are easily obtained, and cost as little as R$200 (about US$85).
A major factor in prompting ranchers to fell the forests is the harsh economic dilemma they face. The study found that the cost of going deforestation-free on 145 hectares is R$412,000 (US$167,000), nearly double the R$217,500 cost of simply clearing forest for beef production.
And while newly-deforested land can sustain cattle for at least five years at no further cost, managing pasture properly is expensive because it needs fertilisers, machinery and other investments, which cost about R$50,000 annually.
Land tenure is another problem. Several ranchers told the authors they had been waiting, sometimes for more than 20 years, to receive legal title to their land. Without a title, banks will not lend ranchers the money they need to change to a deforestation-free operation.
Foreign demand
The study found that deforestation driven by land speculation is increasing rapidly in Brazil. A further concern is the growing foreign demand for a range of crops whose cultivation requires the removal of trees. The Federation of the Industries of the State of São Paulo says production of four crops alone − soya, corn (maize), sugarcane and palm oil − will need more than 10.5 m more hectares of land by 2023.
Palm oil is fairly new in Brazil, but it is well placed to grow faster than any other commodity. The government of Pará estimates that, by 2022, palm oil plantations for biofuel will cover 700,000 ha, which would make Brazil the world’s third largest producer, behind Indonesia and Malaysia.
The study says that that only already-degraded land should be used for palm oil, so that producers do not end up illegally clearing new land.
Deforestation in the Amazon region has a considerable impact on the world’s climate as the forest is a vital carbon “sink”, soaking up greenhouse gases. If it stopped acting as a sink and became instead a source of carbon, the consequences could be profound.
