Cattle are still driving deforestation in the Amazon - but a new wave of cash crop agriculture for palm oil and other commodities is on its way. Photo: Kate Evans for Center for International Forestry Research (CIFOR) via Flickr.
Palm oil - the new threat to the Amazon
20th October 2014
Deforestation in the Brazilian Amazon has been sharply reduced in recent years, writes Alex Kirby. But analysts say that palm oil and other cash crops are set for a major expansion, while high demand for beef, and administrative chaos, may undermine efforts to reform the ranching sector.
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.
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.
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% - although the Brazilian government's figures show that losses rose again by 29% in the year to 31 July 2013.
By 2022, 700,000 hectares of palm oil?
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.
Ranching - the problem has not gone away
The beef industry, meanwhile, which had caused nearly 75% of earlier deforestation, has continued to grow rapidly.
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%, 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% in 2011 to 37% 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.
Administrative chaos favours poor lsand management
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 fertilizers, machinery and other investments, which cost about R$50,000 annually.
Researchers have argued that by taxing cattle on conventional pasture and by subsidising semi-intensive cattle rearing, Brazil could curb up to 26% 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.
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.
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.
Alex Kirby writes for Climate News Network.
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