Chinese demand for Brazilian beef raises deforestation risk

Southern Brazil eyes lucrative Chinese market, displacing ranches to the Amazon to meet domestic demand
<p>Cattle ranching is a major driver of deforestation in the Brazilian Amazon (image: <a href="">CIFOR</a>)</p>

Cattle ranching is a major driver of deforestation in the Brazilian Amazon (image: CIFOR)

Last year the Brazilian beef industry broke its own records. It exported 1.6 million tonnes, up 11% compared to the previous year, according to the Brazilian Association of Beef Exporting Industries (Abiec).

But while the industry celebrated, the numbers rang alarm bells for environmentalists.

“Livestock is the major driver of Brazilian deforestation,” said forest engineer Paulo Barreto, of the Amazon Institute of People and the Environment (IMAZON). Barreto stressed that the boom in exports puts extra pressure on forests since domestic production almost matches consumption. “If it were only for the domestic market, this would not happen.”

According to IMAZON, 40% of new cattle herds are in the Amazon. Approximately 80% of the recently deforested will be used for livestock, with 20% of new beef going abroad, along with 80% of leather.

Much of this growth goes to China, the top buyer of Brazilian beef. It purchases almost a quarter of all exports and numbers are rising fast. Last year, China purchased 50% more Brazilian beef than in 2017 —the steepest increase in volume of any importer.

After eight years of decline, deforestation in the Amazon region began to grow again in 2012, when beef exports grew 7.8% compared to the previous year, according to Abiec.

Decoupling deforestation and growth

Brazilian agribusiness fiercely fights environmental protection agencies’ efforts to curb deforestation, claiming that the industry is vital for economic growth.

Last year, its caucus in Congress supported the successful presidential candidacy of Jair Bolsonaro, who called the agencies “fine factories”. Bolsonaro’s new agriculture minister pledged to create a “more favourable” environment for agribusiness.

However, deforestation in the Amazon is not a necessary evil for economic development. A recent study by the University of São Paulo’s Institute of Energy and Environment showed that agricultural production in the rainforest can be highly inefficient in terms of land use.


the value of Brazilian agricultural products that come from the Amazon

The 750,000-square-kilometre area of the Amazon that has been deforested for cattle ranching – a land mass twice the size of Germany – contributes only 14.5% of the total value of Brazilian agricultural products. São Paulo state produces almost the same value with a quarter of the farmland.

The Amazonian areas were most often deforested illegally, with around 65% used for low-productivity pasture, which counts less than one head of cattle per hectare, according to the Amazon Environmental Research Institute (IPAM).

Mapping supply chains

The process of tracing cattle reared on deforested land to international markets is inhibited by logistical and other issues. There is still no evidence that beef coming from pastures in deforested parts of the Amazon goes to China, for example.

Given the transport costs, meat produced in the south of Brazil is more competitive for the Chinese market since it is closer to major ports with links to Asia, such as Santos in São Paulo State.

However, researchers believe that because the south now caters for foreign beef demand, the Amazon may have increased production to supply the domestic market.

“It is a type of indirect effect,” said Barreto. “The connection is very strong.”

Global Canopy, an NGO, maps supply chains associated with deforestation in tropical forests. The organisation compares data to identify which Brazilian municipalities produce beef that ends up in China.

“Our idea is to connect businesses and go to the municipality where the meat originates, thereby connecting the origin of the meat to deforestation,” said Simone Bauch, Global Canopy’s Director for Latin America. However, tracing is difficult because, as Bauch pointed out, “cattle move”.

According to Christina MacFarquhar, one of the scientists responsible for the mapping, nine of the top twenty companies surveyed produce cattle for the Chinese market. The other 11 feature in the leather supply chain.

We believe in the power these companies have to influence and encourage Brazil to change

Beef purchasers include companies like the Kai Bo supermarket chain, one of the largest importers, and retail giant China Resources National, operated by CR Vanguard.

Global Canopy’s project will also investigate how committed companies are to implementing good practices and preventing deforestation.

“Basically, the results are not positive, since we did not find anti-deforestation policies on the Chinese companies’ websites,” said MacFarquar, who concedes that the movement to eliminate deforestation from supply chains is new in China.

There is, however, some evidence that Chinese companies are willing to improve sustainability in agricultural supply chains.

Jun Liu, chairman of China’s largest food processor COFCO, announced in a January article that coincided with the World Economic Forum in Davos, Switzerland, that the company would support tougher rules on trading soy that is cultivated in deforested areas.

While Global Canopy’s mapping project does not try to dissuade Chinese and other international companies from buying beef associated with deforestation, they encourage them to drive changes in the meat supply chain that could help prevent it.

“We believe in the power these companies have to influence and encourage Brazil to change,” MacFarquar said.

Greenhouse gases

Deforestation has become a growing international concern because of the carbon emitted when trees are felled, which causes climate change.

In 2016 Brazil featured seventh in the list of the world’s biggest greenhouse gas emitters. According to the Working Group for Zero Deforestation, over half of Brazil’s emissions are caused by deforestation.

According to the watchdog Climate Observatory, fertiliser use and methane produced by livestock also contribute planet-warming gasses. The last report from the Intergovernmental Panel on Climate Change stressed the urgent need to completely halt deforestation, which could be one of Brazil’s main contributions in the fight against global warming.


the unconditional emissions cuts Brazil pledged to achieve by 2025

As part of its commitments under the Paris Agreement, the previous Brazilian government pledged to cut its emissions by 37% by 2025 and 43% by 2030.

While Brazil’s new administration stopped short of pulling out of the Paris Agreement, it is highly unlikely to advance policies that will lead to lower emissions. Last week, president Bolsonaro said Brazil “does not owe the world anything” when it comes to the environment.

Bolsonaro’s uncooperative stance could put more emphasis on the private sector to advance sustainability in food production. Researchers even believe that as well as protecting forests, sourcing deforestation-free beef could be good for business.

MacFarquar said consumers worldwide are increasingly opting for brands with clear policies on the environment and sustainability:

“This is not just about saving the planet and the forests but about saving your finances and your business.”