The challenge

Current estimates suggest that degraded Amazonian lands feed approximately 200 million cattle. Brazil is the world’s largest exporter of beef, supplying about a quarter of global beef exports – however, this figure is still marginal to the amount of beef consumed domestically. Traditional cattle ranching practices in Brazil are problematic not only because of their size, but also because they reduce soil nutrient levels, over time causing the land to become useless for cattle ranching. This forces ranchers to encroach into new areas in order to continue production.

The Amazon region, in particular, has suffered greatly from deforestation driven by cattle ranching, accounting for upwards of 80% of total deforestation in the Amazon since the late 1960s. Approximately 45 million hectares of the Amazon rainforest that has been deforested is now cattle pasture. There are proven cattle intensification methods that can support the long-term use of pastureland with little or no loss of fertility or productivity – but sustainable intensification relies on capital and high-quality technical assistance, which does not exist in many regions.

The project

 Pecuária Sustentável da Amazônia (PECSA)  was a cattle ranching management and partnership company founded in 2015 as a spin-off to a local non-governmental organisation, Instituto Centro de Vida (ICV), to test a cattle intensification model. The organisation was doing this through partnerships with farmers who offer to lease their land and part of their herd for seven to 10 years, in return for a share of the revenue created through intensification. PECSA took on the management of farms, including any investment required for pasture reform and rotational grazing, nutritional supplements, infrastructure, reforestation in areas not compliant with the Brazilian Forest Code, and farm hand training.

The company had partnerships with six farms, managing around 40,000 hectares, including 17,000 hectares of natural protected area and around 45,000 cattle. Working with an environmental focus, PECSA established zero-deforestation agreements with farmers and demanded zero deforestation from calf suppliers, verified through GIS monitoring and satellite images before every calf purchase. The model aimed to create revenue by transitioning farms into semi-intensive production farming systems with support from capital received from investors.

P4F support

P4F supported PECSA to scale its activities based in three areas:

  1. Transition to a new production system: technical support in nutrition, herd acquisition and upgrading farmers’ partnerships. 
  2. Operational excellence: engaging an independent consultant support to improve PECSA’s management and operational processes, including implementation of a new information management system to improve monitoring and the efficiency of the operation.
  3. Preparation for scale-up: develop a business plan and funding strategy to scale operations. 

Impact

In order to increase the amount of land under sustainable management, P4F helped PECSA implement a sustainability assurance system (including cattle traceability for cattle ranching intensification) in partnership with Imaflora (a non-governmental organisation) and the Sustainable Agriculture Network (a coalition of non-profit conservation organisations).

Economic and social value: Producers were paid a percentage of the cattle sales, calculated based on sales before the PECSA intervention. PECSA required their suppliers to commit to preventing the existence of modern slavery, and staff were provided with training in new technologies that could lead to improved skills and salaries.

Environmental value: The PECSA model aimed to reduce the carbon impact of producing beef by around 80% compared to traditional cattle ranching. They also aimed to restore around 10,000 hectares of forest across the six farms and required suppliers to not engage in deforestation and comply with Brazil’s national forest code.