By Alastair Stewart
DTN South America Correspondent
SAO PAULO, Brazil (DTN) -- A solitary cow saunters across a massive termite mound-pocked field just outside Santarem, an Amazon port city on the east side of the rainforest.
This isn't the kind of ranching that has made Brazil the world's No. 1 beef exporter, and it is the type of low-intensity farming that has to disappear if the industry is to reduce its impact on the forest and reduce carbon emissions.
The majority of rainforest that is cleared is turned into pasture -- about 63% of the 290,000 square miles cleared between 1988 and 2012, according to government data.
The wider Amazon region is home to approximately 70 million head of cattle.
As such, beef is often classified as the biggest driver of deforestation, although cattle can often be used as a means to occupy land as much as it is to make money.
The beef industry caught huge criticism for its impact on the forest over the last decade but, like the soy industry, Brazil's meatpackers have made progress to reduce their footprint.
The turning point came in June 2009 when the main meatpackers signed an accord not to buy beef from illegally cleared areas in order to avoid a R$2 billion ($740 million) lawsuit brought by government environmental agencies and local public prosecutors.
The companies involved in the agreement account for about 80% of cattle purchases in the Amazon region.
Unfortunately, the other 20% is bought by small beef operations that often don't ask questions and sell on the local market.
"Those small operations represent a small part of the sector, but hurt the image of the industry as a whole," said Fernando Sampaio, executive director at the Brazilian Beef Exporters Association (Abiec).
While it's true that most logged forest becomes pasture, there is a reverse process that isn't taken into account, beef industry heads complain.
Many of the pastures are worked so sparsely and are neglected to the extent that they go beyond degeneration and forest is regenerated.
Approximately 64,000 square miles of former Amazon pasture is returning to its natural form, said Mauricio Nogueira, a beef analyst at the local Agroconsult farm consultancy,
"We already have zero deforestation but this regeneration isn't counted," he notes.
The Forestry Code is seen as even more vital to create sustainable ranching in the Amazon than for soy production.
That's because land titles in the Amazon are a mess. Few have paperwork and cattle owners can have difficulties obtaining credit and selling cattle. This situation pushes many farmers into illegality, which in turn means they have a lot less to lose by getting involved in illegitimate clearance, said Abiec's Sampaio.
While greater accountability will hopefully reduce the impact of small farmers with a few head of cattle, the trend for intensification will help reduce the environmental footprint of big commercial ranches.
The trend for higher-intensity ranching is borne out of necessity.
Stricter environmental controls in the Amazon and in the surrounding Cerrado, Brazil's savanna region, mean less new land is becoming available, while the spread of grain farming is reducing pasture on the Cerrado. Offering far higher returns than low-intensity ranching, soybeans have claimed 47 million acres of pasture since 1990.
The trend is being fueled by cheap government credit. According to Caio Rocha, agriculture development secretary at the Agriculture Ministry, the federal government will finance reforming 37 million acres of degraded pasture at a cost of $12 billion by the end of the decade.
Meanwhile, Brazilians have started embracing feedlots. Confinement remains relatively rare in Brazil, but Rabobank expects lot capacity to double to 9 million head over the next 10 years.
Agriculture is Brazil's No. 1 carbon-emitting industry due to deforestation, but also in significant measure because of pasture degradation and cattle methanol and nitrous emissions.
Intensification will mean better-kept pastures as well as lower slaughter ages, cutting gas emissions.
Further incentives to lay off the forest will come if a carbon market can be established to offer credits for regenerating forests.
The UN Framework Convention on Climate Change is discussing the REDD+ (Reducing Emissions from Deforestation and Forest Degradation) mechanism, under which the market could be created.
But targets need to be set and methods of compensation established for such a system to work, notes Rodrigo Lima, general manager at AgroIcone, a farm policy consultancy.
Of course, the farmers who illicitly clear land in the Amazon are not part of this process. For them, cattle are often more a means of occupying land than anything else.
The only means of eradicating this occupation is greater government monitoring and police action.
"But it is easier to pressure the beef industry than the government, so the lobby will continue," said Agroconsult's Nogueira.
Alastair Stewart can be reached at firstname.lastname@example.org
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