Can Amazonian Beef Be Sustainable?

The second article in a three-part series exploring the growing pressures facing the Amazon forest and its people. Read part one, "In Brazil, Violence Looms at the Forest Edge".

One of Brazil's largest beef-export companies is expanding its Amazon operations, thanks in part to funding from the World Bank's private sector arm, the International Finance Corporation. The IFC says its investment is part of an historic effort to make cattle ranching in the region more sustainable, but many environmentalists are skeptical.

The $90 million investment will help Bertin Ltda., Brazil's leading beef and hide processor, expand its slaughterhouse in the southern Amazonian state of Pará-an area marred by illegal deforestation and ranch expansions, some of which have turned violent in recent years. To ensure that the cattle are not raised on illegally acquired land and without harm to the forest, Bertin has agreed to demand environmental permits for each lot of livestock that enters the facility.

"This will result in more efficient use of pasture land, and ultimately raise suppliers' income and reduce pressure on critical forest resources," said Karina Manasseh, an IFC spokeswoman.

Environmentalists, however, have raised concerns that the project lacks transparency and that the investment will only worsen deforestation, exploitative labor, greenhouse gas emissions, and illegal land grabbing. The IFC has acknowledged that these issues are potentially problematic with Bertin's operations, but it says the new system will prohibit the processing of cattle purchased from ranches that do not follow the strict regulations.

The debate comes as Brazil's livestock industry is booming, especially in the Amazon. In 2003, Brazil became the world's largest exporter of beef, and second in overall beef production according to a report from Amigos da Terra, the Brazilian affiliate of Friends of the Earth. Ten million Amazonian cattle were slaughtered last year, 46 percent more than during 2004.

The growth in global demand for beef was the primary cause of a 60 percent increase in deforestation during the later months of 2007. And as the ranches have expanded over the past decade, forest clearings contributed between 9 and 12 billion tons of greenhouse gas emissions, the Amigos da Terra report said.

Bertin's ability to monitor whether its suppliers comply with the IFC's environmental and labor criteria is dependent on an internal tracking system that the slaughterhouse will administer. A pilot project has begun that will include about 500 ranchers, but it is not yet clear how Bertin will ensure that each ranch is accurately disclosing the origins of its cattle, including how and where it was raised.   

Critics of the IFC scheme say it will be near impossible to determine whether ranchers are selling cattle raised on sustainable pastures. "Bertin has many potential suppliers of beef; it's very difficult to keep track of all these small ranchers, even the big ones," said Robert Goodland, a former World Bank advisor and now a senior fellow at the World Resources Institute. "And Bertin doesn't really want to check up too thoroughly, otherwise it wouldn't be able to get all the beef it needs. So there's no incentive to follow the law."

Amigos da Terra director Roberto Smeraldi also criticized the IFC investment, saying the sites chosen for the Bertin project's environmental assessment did not accurately reflect the potentially wide-sweeping damage to the region that the expanded operation could bring. "[The IFC] cannot just have this type of superficial approach to what's the end use of their money when...you have all sorts of issues of legality for the environment, labor rights, land tenure," Smeraldi said.

Daniel Nepstad, an ecologist with the U.S.-based Woods Hole Research Center, is organizing the sustainable purchasing operations for Bertin through the Amazon Institute for Environmental Research. He said the slaughterhouse could easily have found non-IFC funding. But Bertin opted to follow the IFC guidelines to better position itself as a responsible producer in a competitive global market, Nepstad said. "Capital for this company is insignificant."

Nepstad says the project will ultimately force ranchers who follow illegal practices to sell their cattle to slaughterhouses that are located farther away, and that often offer lower compensation, than Betin's operation. He says this will provide further incentives for ranchers to comply with the IFC's and other guidelines.

Yet in the Amazon, as elsewhere, it may still cost more to play by the rules. If ranchers want to convert already-cleared land into pasture, this requires the use of fertilizer and significant water resources, at a price tag four times higher than if they were to illegally clear new land. "It's cheaper to deforest new areas than to invest in recuperating," Smeraldi said.

Nepstad said proper incentives need to be made available to convince ranchers to stop deforestation, such as national or international conservation funds. "We need to make it viable for land owners to legalize their operations," he said.

Ben Block is a staff writer at the Worldwatch Institute who covers everything environmental for Eye on Earth. He can be reached at bblock@worldwatch.org.