Brazil has reduced its deforestation rates by about 80 percent over the past decade, an effort the global community hails as a major environmental success story. It is said that as a result of this achievement, Brazil has made the single greatest contribution of any nation to reducing global greenhouse gas emissions.
But the strong actions taken by the government, agribusinesses and large landowners to protect the Brazilian Amazon have not resulted in a similar success story among smallholders, and the complex reaction to these policies by different food industries is driving new deforestation risks, according to two recent reports.
If small agricultural operations are to turn a profit while avoiding cutting down forests, the authors argue, the Brazilian government needs to take another look at its existing laws, possibly considering ways to reward smallholders for avoiding deforestation rather than only punishing them for not trying hard enough.
Addressing this issue is becoming increasingly important as Brazil last year confirmed that its deforestation rates went up for the first time since 2009. As things stand now, states one report, commissioned by the Environmental Defense Fund, some small cattle ranchers face "perverse incentives" to revert to cutting down trees rather than managing their existing pastures for long-term grazing.
"So much of this pressure was exerted from the private sector, and it happened overnight," said Shawn Stokes, a senior research analyst with Datu Research and author of the new report on beef-driven deforestation in the Amazon, supported by EDF. "Some of the growing pains from that very quick transition are coming to surface."
Big landowners still cause most forest loss
One key finding of the second paper, however, is that smallholders still don't cut down forests nearly as much as the big landowners. Published this week in the Proceedings of the National Academy of Sciences, research led by Javier Godar at the Stockholm Environment Institute in Sweden found that landowners who control over 1,200 acres of land still drive most deforestation in the Amazon.
Also, in areas dominated by smallholders, the study found forests were less fragmented and degraded.
At the same time, however, census tracts dominated by the biggest landowners managed to reduce their contribution to annual deforestation rates by 63 percent between 2005 and 2011, while the contribution of census tracts dominated by smallholders went up by 69 percent.
Also, in remote areas -- "frontier" forests to which many smallholders are driven as land prices go up elsewhere -- deforestation jumped by 88 percent between 2009 and 2011.
"Deforestation policies to date, which have been particularly focused on command and control measures on larger properties in deforestation hotspots, may be increasingly limited in their effectiveness and fail to address all actors equally," the report states.
The fact that deforestation rates have bottomed out shows that Brazil's current policies are "really focused on targeting the larger properties because they're less socially and politically difficult to address," said Toby Gardner, a report co-author and a research fellow at SEI in Stockholm.
"In absolute terms, the urgency still remains very much on dealing with the larger properties," Gardner said. But, he added, smallholders must comply with the same laws to reduce deforestation as large landowners and agribusinesses.
"By bringing the fist down on them, you won't make a lot of difference in reducing deforestation," Gardner said. "You're going to have all of these collateral social effects."
Cheaper to cut down trees for some
Examples of such collateral effects can be found in the cattle ranching trade, as detailed in the new report commissioned by EDF.
The beef industry, previously responsible for nearly 75 percent of deforestation, has made significant strides while still increasing production, the report states.
However, Stokes found that policies to cut deforestation have caused new economic pressures and regulatory hurdles for cattle ranchers, especially for those who own less than 1,200 acres.
For ranchers, the cost to get the appropriate licenses and comply with other deforestation regulations is between 16,500 and 28,000 Brazilian reals ($6,885 and $11,684). Under the current system, in which licensing fees are issued on a per-producer basis, prices are disproportionately higher for small ranchers.
Additionally, the cost to manage 145 hectares (358 acres) of cattle pasture so that no additional deforestation is needed is roughly R$412,000. However, the cost to deforest the same amount of land is markedly less, between R$65,250 and R$217,000.
"That doesn't include the sale of timber," Stokes said. "It's actually quite possible that you could deforest land and come out ahead."
Also, cattle ranchers trying to get land title, which is needed to get bank credit to pay for deforestation-free land management, are often faced with bureaucratic bottlenecks. A handful of ranchers Stokes interviewed said they had waited years to receive land title -- in some cases, more than two decades.
"Ranching is not good business nowadays," an unidentified rancher in the Brazilian state of Para is quoted as saying in the report. "So some smaller ranchers still consider deforestation the best way to expand production without having to invest in the land."
Facing these pressures, some ranchers are feeling betrayed by previous claims that halting deforestation would eventually pay off for them.
Stokes said, "I think there was a lot of hope at the outset that they would receive a premium for adopting these measures. ... But that just hasn't happened yet."
Plenty of sticks, few carrots
Stokes found that more cattle ranchers are moving to cheaper lands previously cleared by land speculators in the north or are considering planting other, more lucrative commodities like oil palm.
Stokes speculates that smaller operators are more likely to start growing oil palm because they face higher costs. This could be a positive thing, Stokes said, if oil palm is grown on degraded land and avoids driving further deforestation.
However, this could also make enforcing anti-deforestation laws much more difficult, Stokes' report warns. As ranchers start to grow other crops, like oil palm and soy, it is easier for nonlicensed producers that drive deforestation to "launder" their product through licensed producers, something that is already happening in single-commodity supply chains.
"While past unlicensed palm oil producers could only channel their product through willing licensed palm oil growers, they now can channel it through a willing [Rural Environmental Land Registry]-licensed rancher who also happens to grow palm oil," the report states. It adds, "It becomes easier to falsely blame one industry for deforestation committed by another."
To address these challenges, Stokes and EDF are recommending ramping up a "jurisdictional approach," meaning municipalities and states, rather than single commodity supply chains, work to achieve zero-net deforestation.
"We have to be thinking about this more holistically and comprehensively rather than on a single-commodity basis," said Andrew Hutson, director of global value chain initiatives with EDF. "You don't want to be playing Whac-a-Mole forever."
The report states that meeting requirements of a zero-net-deforestation jurisdiction might be easier to achieve for ranchers and farmers, especially smallholders. Moreover, it suggests this approach might make it easier to provide financial incentives for keeping forests standing, such as the United Nations' Reducing Emissions From Deforestation and Forest Degradation (REDD+) program.
Gardner, co-author of the PNAS study, agreed that finding a way to reward smallholders for reducing deforestation will become increasingly important if Brazil is to continue its success in saving the Amazon.
"For as long as those rewards are delayed in maturing ... the credibility and interest and support for more sustainable land practices will deteriorate," Gardner said.
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