Ganaderia

 Jurisdicional    -­‐  Experiencias  Tempranas  

en  Acre  y  Mato  Grosso,  Brazil    

 
Tathiana  Bezerra  
Lawyer  &  Policy  Analyst  
 
October  22,  2013      
Who we are:

Earth Innovation Institute (www.earthinnovation.org)

An independent research and policy institute, born in Brazil;

formerly IPAM International Program (IPAM=Amazon
Environmental Research Institute)
 Who we are:

•Earth
Leader ofInstitute
Innovation “Forests, Farms, and Finance”
(formerly IPAM - International Program)
Consortium
Earth Innovation Institute
(formerly IPAM
International Program)

Earth
Innovation
Institute
(formerly IPAM International Program)
 Forests, Farms and Finance Consortium:
•  Supporting transitions to sustainable supply chains and,
eventually, sustainable “jurisdictions” (municipalities,
departments, nations) by linking markets, domestic policies,
and finance

•  Developing financial mechanisms with new and existing

pools of capital to create incentives for sustainable
production and to reduce the barriers to accessing financing

•  Supporting “low-emission rural development”: more food,

more forest, fewer emissions, better rural livelihoods

•  Priorities: Brazil (beef and soy), Colombia (beef, palm oil,

sugarcane), Indonesia (palm oil)
The Global Context

Growth  in  Demand  >  Growth  in  Supply  

Hunger,  Land-­‐Grabbing,    
Deforesta=on,  Emissions    
 The Promise of Livestock Sustainability:

•  Increased productivity and higher profits

•  More competitive and greater access to markets
•  More efficient, productive use of natural resources
in a world of resource scarcity
 The Challenge of Livestock Sustainability:

•  High costs of monitoring performance of livestock

systems at the farm/ranch/finca level
•  Lack of price premiums for sustainable beef, dairy
•  Lack of finance and technical support for the
transition to sustainability
•  Cattle continue to be used for demonstrating
“productive use” to claim land (role in land
speculation) and/or as “insurance” in tough
economic times (fairly liquid investment)
The challenge of sustainability: a profusion of
initiatives (the example of Mato Grosso)

*  

*  
*  =jurisdic=onal  
 Overcoming these Challenges:

•  Systemic, jurisdiction-wide approaches to livestock

sustainability that deliver benefits to sustainable
livestock producers (examples: Acre, Mato Grosso)

•  Translating environmental performance (for

example, the decline in deforestation and CO2
emissions) into real benefits for livestock producers

•  A simple jurisdictional performance metric that

unites fragmented approaches to sustainability
 Key Terms

•  Jurisdictional approach = Approach taken at the jurisdictional

level, eg a municipality, a department, and even a nation

•  REDD+ = Reducing Emissions from Deforestation and Forest

Degradation
Increased agricultural production is achievable while
reducing deforestation (Mato Grosso)
12.0 30.0
Desmatamento Anual
Annual  Deforesta=on    
Cattle Herd

(millions of tons or millions of heads)

Annual  DeforestaIon  (thousands  of  Km2)  

10.0 25.0

Mato Grosso’s Production

8.0 20.0

Soy Production

6.0 15.0

4.0 10.0

2.0 5.0

0.0 0.0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Why a jurisdiction-wide sustainable cattle
program?

•  Quicker pathway to large-scale sustainable production

•  Lower costs than certifying individual farms
•  Greater potential for alignment of policies and market-
driven initiatives
•  Greater potential for delivering performance-based
benefits to livestock producers
•  Create sustainable supply at scale and lower transaction
costs for buyers (eg. Consumer Goods Forum)
Governmental support to LED-R through
innovative transfer programs
•  Transfer mechanisms between
governments
–  Municípios Verdes (Pará State)
–  ICMS Verde
Problem: No direct benefit to farmers

•  Opportunity in Colombia:
–  Tailored approach – take lessons from
neighbors and be the leader
–  Generate benefits to farmers
Early jurisdictional approaches to
sustainable livestock– Acre, Brazil
•  ACRE SISA Program
–  System for Incentive for Environmental Services (SISA) Law
approved in 2010
–  Jurisdictional Program on Cattle Intensification under
development
–  2012-2013:
•  Key stakeholders at the table
•  Bottlenecks identified
•  Scenarios for cattle expansion free of deforestation

–  Next Steps:
•  Develop system for delivering benefits to sustainable farmers

•  Key points for Colombia:

–  Monetize the emission reductions and environmental assets
–  Increase production and generate benefits for farmers
 Cattle Intensification Leads to Higher
Productivity and Profits, albeit with
Higher Costs (Acre)

Stocking  
Rate  (AU*/ Produc=vity   Produc=on   Cost  per  ha  
System   ha)   (kg/ha/year)   cost  ($/kg)   ($/ha/yr)  

Tradi=onal   1   68   1.4   97  

Improved   1.5   130   3x   1.1   141   2x  

Advanced   2.5   208   0.9   189  

*AU  =  animal  units  

Early jurisdictional approaches to
sustainable livestock– Mato Grosso, Brazil

•  Mato Grosso
–  Brazil’s largest agricultural state and
former champion of deforestation
–  Farmers who engage in conservation
activities can benefit from REDD (art. 14,
§ 1º)
•  Farmers currently skeptical
–  Potential for monetizing historical
emissions reductions to create a “carbon
premium”
 Mato Grosso’s Environmental Asset, Still Un-
monetized: emissions reductions of 1.2 billion tCO2

14,000
Desmatamento
Avoided
evitado
Deforestation
12,000
Deforestation Reduction =
Average Annual Deforestation

Emissions Reductions of 1.2 GtCO2

Average Deforestation
10,000
1996-2005

8,000

6,000

4,000

2,000

-
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source:  Nepstad  et  al.  2013  Phil  Trans  Roy  Society  

Hypothetical approach for developing a
“carbon premium” for livestock producers:

•  Allocate CO2 emissions reductions across

sectors using REDD law
•  Engage buyers of ER’s
•  Establish criteria for distribution of
emissions reductions within beef sector
•  Example: Qualifying producers are in municipios
that have reduced deforestation 50%, are
registered in CAR & complying with Forest Code
•  Design/implement finance mechanism for
delivering payment/incentive directly to
qualifying producers, tied to production
Jurisdictional Performance: The Sustainable Growth Index

Nepstad,  Irawan,  et  al.  In  press.  Carbon  Manag.  

Linking Jurisdictional Performance to Benefits

Nepstad,  Irawan,  et  al.  In  press.  Carbon  Manag.  

The vision: multiple incentives & benefits for high SGI
 Public capital can reduce risks for commercial
investment into sustainable production

ODA for
agriculture
Scale of Implementation/Adoption

Domestic Commercial
public agriculture finance
spending on (trade credit, private
Climate agriculture loans for
finance/ agriculture)
REDD

Sustainable supply chains

Risk mitigation Mature market for sustainable commodities

Time
Integrated finance in Acre can allow it to
monetize its emissions reductions and fund
sustainable cattle*
Amazon KFW
Fund US
$16M
Donors, compliance US$33M
Virtuous markets
Cycle
Financial or other Demonstrates
support emissions reductions

FNO
US$81M
Low PRONAF Acre State
Carbon US$29M Brazil
Agriculture
(ABC)
Supports Creates
sustainable cattle emissions
production reductions
Increased
productivity, Sustainable
Supply chain
reduced cattle
emissions
*Among other low-emissions rural development activities
 Colombia has opportunity to support sustainable
production by aligning agricultural finance
Financing  for  Agriculture  in  2013  
$4,000   •  Align loans with sustainability
$3,500   criteria related to zero
deforestation production;
$3,000  
Millions  (USD)  

$2,500   •  Provide better loan terms (lower

interest rates, longer payback
$2,000   periods) for semi-intensification
$1,500   linked to reduced deforestation
$1,000   •  Facilitate access to credit for
$500   producers/supply chains in low
deforestation jurisdictions and
$0  
those who meet simple metrics
FINAGRO   Other   Commercial   ODA                             related to sustainability;
Credit   FINAGRO   suppliers   (2011)  
Support   and  trade  
credit  
 Integrated and efficient finance can help
achieve sustainable production at scale
Scale of Sustainable Cattle Production

Markets
•  Robust demand
•  Restricted access for
unsustainable products
Public Sector
•  Provide incentives for
sustainable production •  Make capital investments
•  Mitigate risk •  Achieve higher productivity,
•  Lower cost of capital competitiveness and
Supply Chains profitability coupled with
•  Zero deforestation production
Nascent market Mature market
Time
 Conclusions:
•  The world needs more food, fuel, fiber production with less
deforestation and fewer emissions
•  It is possible to increase production while lowering deforestation: a
critical role for livestock intensification
•  Sustainable supply chain initiatives tend to operate independently of
policies and at the scale of individual properties, slowing progress
•  Jurisdictional approaches to sustainability can lower costs and provide
framework for delivering benefits (carbon premiums, access to finance,
technical assistance, market access) to livestock producers
•  A unified definition of jurisdictional performance can help unify
fragmented approaches to sustainability

•  Colombia cattle sector is strategically positioned to make the transition

to sustainability