Lessons from Latin America: Using less, earning more

Abílio Rodrigues Pacheco is a landowner in the Brazilian state of Goiás who works for the Brazilian Agricultural Research Corporation (EMBRAPA). At the recent Green Business Forum in Asunción, Paraguay, he described an experiment he conducted.

On 500 hectares of degraded land, Pacheco planted rows of eucalyptus saplings along 15-meter-wide strips of cultivated fields. He mixed soy crops with corn and grass, and, once the crops had been harvested, introduced beef cattle. The results, even after just a few years, are impressive. His farm is more fertile, uses less water and yields more. Cattle weight is also up, with 270 kilograms of beef per hectare compared to the Brazilian average of 105. On top of that, Pacheco is earning revenue from selling lumber.

He is now working with 50 local dairy farmers in Goiás, who are experiencing a similar uptick in production. “And by convincing their neighbors with their own successes,” he said, “we have a technological transfer method that we consider to be very efficient.”

How – or whether – the production of agricultural commodities can become ‘greener’ and more sustainable was a major question raised throughout the summit, especially given its backdrop of South America, which supplies much of the world’s beef as well as soybeans used in livestock feed.

“Latin America is the region with the most biodiversity in the world,” said Leo Heileman, UN Environment director for Latin America and the Caribbean. “But we are losing that wealth because we are feeding the world. If we want to use less land, less water and less energy, we have to improve yields.”

Paraguay relies almost exclusively on meat and soy products for export earnings – a reliance mirrored in the commodity-dependent economies of its neighbors as well, and not always to the best effects. In Brazil, cattle ranching has led to massive deforestation, slave labor practices, and conflict as forest dwellers are pushed out to make room for fields of grass that quickly degenerate into degraded land. This echoes the findings of a major recent report on the food system, which emphasized how reductions in meat consumption could play a shockingly large role in avoiding catastrophic climate change.

As Pacheco’s example demonstrates, silvopasture, or agroforestry, may well an answer to these social and environmental ills, giving both financial and environmental gains.

For Nicolas Kompalitch, CEO of Canopy Energy, a French company specializing in renewable energies, one of the biggest challenges is indeed convincing ranchers to plant trees. His firm has been working in Paraguay’s Chaco region, where deforestation is claiming 246,000 hectares every year, by promoting the use of a legume called pongamia (Pongamia pinnata).

By planting a minimum of 200 pongamia trees per hectare, landowners could solve a number of their environmental issues, said Kompalitch. According to the results of its Chaco pilot project, this can bring a 10 percent increase in meat yield. Canopy can also use the pongamia fruit to produce oil for biodiesel, reducing the carbon footprint of soybean, rapeseed and palm oils that are currently used for fuel.

“Convincing ranchers has been a problem,” he said. “They still don’t understand the economic benefits of trying a different system. We need incentives to help us do that.”

Environmental laws that work, tax credits for ranchers moving toward agroforestry, and long-term financing are just a few such incentives needed. One potential bright spot has been the recent announcement by Dutch financial institution Rabobank that it will provide loans for projects related to land restoration, said Paola Agostini, lead environmental economist in the World Bank’s Environment and Natural Resources Global Practice. “This is a major breakthrough for our landscape restoration initiative,” she said, “because one of the things we lack the most is credit.”

Government action in Brazil has also made a big difference in the beef industry there, said Taciano Custodio, executive manager for sustainability and compliance at Minerva Foods, the country’s largest beef exporter and third-largest meat company, with operations spanning the continent.

Since 2008, Custodio said, Minerva has signed three important public agreements regarding the sourcing of its meat. The company “has been investing in a supply-chain management system that can guarantee that all of our products are not linked to beef production in areas embargoed by the government, protected areas, deforested areas and indigenous lands.”

Custodio agreed that while Minerva’s international clients insist on buying a sustainable product, some companies geared toward the domestic market are not in compliance.

“There are two sides to the coin: the players who consider those criteria in order to buy and therefore provide not only healthy, high-quality food but also security on the social and environmental side; and the parallel market, the people who are buying cattle without any criteria.”

But, he added, the opportunity is there to engage with the public sector, private initiatives, and civil society to restrict and transform the latter.

“Speaking from the industry side, I see no other way,” he said. “Producing sustainable beef is the only way. Having respect for the environment, the animal and the land – I totally believe this is the path, and I believe that in South America we are heading in this direction.”