Under mars 2009 reste Ulf Rasmusson runt och besökte Miljöförbundet Jordens Vänners olika projekt i Sydamerika. Här är hans berättelse om nötköttsprojektet.

The beef cattle project with Amigos da Terra Amazonia Brasileira

Roberto gave me a revealing bit of data: 15 million tons of chicken and pig meat are produced annually in Brazil using 20 million hectares of land, including the lands used for the food for the animals. 10 million tons of beef meat are produced annually, using 173 million hectares of pasture lands. In other words, 13 times more land is needed per kilo of beef meat than is the case for pig and chicken meat.

One way of getting round this is eating less beef meat, but this can hardly be the main or only solution. The other way is to intensify the use of pasture lands for beef cattle.

There is on average around one animal unit (UA, unidade de animal) per hectare in the beef cattle ranches of the Brazilian Amazon, and indeed in the rest of Brazil as well. If this can be increased to say two or even 1,5 UA on a sustainable basis, deforestation for cattle ranching, which is the dominant cause of deforestation, should be greatly reduced. Total production will be increased but the market will not swallow so much meat without severe price reductions. This is one way of looking at what the project is about, as I see it.

I had had this in mind for a long time but had no luck in convincing WWF to work with this, when I was with that organization, nor with other environmental groups. It was always something else that was more important. “It’s the loggers opening up the roads for the ranchers, without the loggers the ranchers wouldn’t come”. In practice, it’s often the ranchers inviting the loggers to come in and take out timber and build a road. Or “It’s ethanol/sugar cane that’s the cause”. There are eight million hectares of sugar cane in Brazil, and 170 million hectares of cattle ranches. Everything is small compared to ranching, even soy. At least 90% of the deforested parts of the Brazilian Amazon are cattle pasture lands or abandoned pasture lands.

It was only when contacting Amigos da Terra Amazonia Brasileira (ATAB) that I sensed an openness to the idea of doing something on the ranching issue. Our discussions developed into the project that ATAB is now running, with support from FoE Sweden. It has had a good start with a number of dialogues with key actors in the beef cattle chain. The release of the report based on the initial study “The Cattle Realm” had an amazingly good reception with repercussions at key policy levels including the Minister of Agriculture and the Federation of Ranchers of Brazil.

I had many years thought of contacting Judson Valentim, nestor of research on ranching intensification in the Amazon. With the project up and running and with Judson being a member of the Board of ATAB, it was natural to finally contact him. He arranged visits for me to intensive, sustainable beef and milk cattle producers in the Amazonian state of Acre, where he is head of Embrapa the government agricultural research agency.

2.0 animal units per hectare

The first beef cattle producer I visited was Luis de Valle, called Gui. A veterinarian by training, he arrived in Acre 30 years ago. He owns one ranch and is manager of a second, with a total of 8 000 hectares (he is manager of a third a bit further away). He keeps 60% in forest, thus obeying the original law requiring a 50 % forest cover. The rest he has turned into beef cattle pasture lands. Originally there was a rubber estate. He provided 100 hectares to each former rubber tapper. Most couldn’t adapt and left, but two have become small ranchers, buying up some more land in the process.

Gui at his ranch

I spent most of the day talking non-stop with Gui mainly on his ranch where his 4-wheel drive managed to drive through the pastures, with frequent stops to leave the car and look at pasture quality and variety, the cattle, the fences etc.

Gui has about 2.0 UA per hectare, i.e. about double the average. In effect, he gets almost the same beef production as if he had deforested all of his property and only had the average of 1.0 UA per hectare. (One animal unit corresponds to one cattle weighing 450 kilos, i.e. only slightly less than slaughter weight which tends to be around 480 kilos. Since most cattle weigh less, the actual number of animals per hectare is larger).

The main reasons for Guis higher productivity, as I understood it, are:

1. A given group of a few hundred cattle rotate between 4–7 piquetes (lots) in one modulo (area), staying up to a week or so in each piquete. He has a total of 22 groups of cattle, each in one modulo. Each modulo is made up of 4–7 piquetes. Each group of a few hundred cattle are rotated between the piquetes of their respective modulo, kept a week or so in each piquete. Each modulo occupies about 100–200 hectares, with each piquete being around 15–40 hectares.

Only about 15% of ranchers in Acre use piquetes of this intensity. The great majority hardly have piquetes, they only have a number of modulos. A more traditional rancher would have had about the same amount of modulos as Gui has on a ranch of that size, but each group of cattle would be confined to that particular modulo with no or little rotation, perhaps moving the cattle occasionally after a month or two, i.e. without any systematic rotation. This means that typically the cattle will overeat parts of the pasture, where they prefer to be e.g. near water or shade. With the rotation that Gui does, the pasture is eaten more uniformly, and all pasture get to rest and regrow most of the time. Gui has electric fences, which greatly reduces the cost of having piquetes.

Gui keeps a close watch on the pasture of the piquetes where the cattle are stationed. When the risk of overeating emerges, he moves the cattle.

2. Gui’s system is not perfect. Overeating does take place, and there are frequent attacks by cigarrinha insects which kills the pasture which shows itself with, in some piquetes, many patches of brownish grass. What Gui does is keep a watch on it so it doesn´t get out of hand. His workers clear away the invasive and dead vegetation, and plant new pasture. He never or rarely gets to the stage where the land gets so degraded that mechanized land preparation has to be done.

Most ranchers are not so quick and eager to act. The result is that a high proportion of all ranches have significant parts with highly degraded pasture. It often becomes so bad that having a tractor come in, followed by fertilization and planting, is the only correct way out. Since this is very expensive, using fire – which kills most remaining nutrients – or abandoning the lands may become options. The option of insecticides or herbicides is used by some, but not by Gui. He does not like the side-effects, such as the killing of other organisms which are beneficial for the pasture.

3. Gui uses leguminous species together with the gramineas (pasture grass), for nitrogen fixation (nitrogen is the main limiting nutrient for the soils). There are other advantages too, such as better ground cover with the leguminous species, higher protein content in the forage (the leguminosas have a higher protein content than gramineas, but they also provide better protein availability for the gramineas), and better resistance to pests like cigarrinha. Judson has been the pioneer in developing and propagating appropriate methods and leguminous species. This has spread to 40% of all ranchers in Acre, but it’s much lower in the rest of the Amazon.

4. Gui uses genetically improved cattle breeds, including crosses between zebu cattle like Nelore and European breeds like Aberdeen Angus, which grow better.

Applying fertilizer and calcium (correctives which reduce soil acidity) significantly increase productivity. Neither is economically viable in the production of meat, Gui told me. Another beneficial measure, supplementary feeding of maize, sugar cane or other crops in the four months or so which are relatively dry, when the cattle only grow 300 grams or so per day, is also not economical, Gui said. Gui keeps a conservative number of cattle, so they are less stressed in the dry season.

Gui has 40 employees, which he thought was about double the average per hectare figure, reflecting his relatively intensive management. 27 are employed in removing invading vegetation and planting new pasture grass, 9 tend to the cattle, two tend to the electric fences (vegetation has to be removed about once a year along all fences) and one drives a tractor which doesn’t seem to be used very much. Most have lodgings in Rio Branco, the capital of Acre 40 kilometres away, to which they go on week-ends. They have simple houses on the ranch, where they work five days a week with the option of working Saturdays if they want. Gui lives in Rio Branco, and visits the two ranches at least twice a week. He usually inspects the ranch on horse. When we drove to his ranch, he asked me if I could ride a horse but it proved to be possible to navigate the ranch with his 4-wheel drive.

Gui has higher expenses, e.g. more workers, but also much higher income per hectare than the average ranch in the Amazon. After deducting all expenses, Gui makes a net profit of 150–200 reais (600–800 crowns) per hectare of pasture, vs the average which is in the range of 90–130 reais. The law stipulating that 50% of the property be forested has since been changed to requiring 80% forest cover, and Gui told me he has a court suit against him to increase his 60% cover to 80%, or in other ways compensate. If the law wasn’t there, he would probably cut down forest to make room for more pasture. However, if somehow most ranchers increased their intensification to 2.0 UA on a sustainable basis, there should not be the incentive to cut down more on a large scale given that the market would be saturated with beef.

Selectively logging his forests gives Gui 500 to at the most 1 000 reais per hectare, from loggers that he gives the right to extract a low 7–12 cubic metres or so per hectare, with strict provisions of not cutting some individuals of each of the sought after species. At the earliest, he can return after 20 years or so, which means 25–50 reais per hectare and year. This can’t compete with cattle ranching.

The ultimate beef cattle ranching intensification – 3.0 animal units per hectare

I visited the ranch of Gui’s cousin, Fransisco Salles, called Chico. He may have taken beef cattle ranching intensification as far as it is possible on a large scale. He uses the Voisin system and reaches 3.0 units of animals per hectare.

Chico became owner to his 4 000 hectares in 1990. Up until 2002 he deforested for pastures, which now total 2 000 hectares. He does nothing with his remaining 2 000 hectares of rain forest, apart from minor extraction for the houses on his ranch, for fences etc.

In his studies for agronomist he learned about the Voisin system, and started implementing it pretty much from the beginning. He knows every part of his 20 square kilometers of pasture. He is on his ranch every day, observing it and supervising work. His pasture is divided into 25 modulos, each of which have 8–12 piquetes. Each piquete is thus only around 7–9 hectares, or around one third the size of Gui’s piquetes. He rotates the cattle carefully when the pasture is eaten just about right, and when the pasture in the next piquete is just about right to get the cattle. This typically means rotation every three days or so. A single corridor connects all piquetes of all modulos (except piquetes facing the lugar de prazer). Each module has a lugar de lazer (“recreation place”) for the cattle of that modulo, with a natural water source and mineral salt supplement. The cattle reach this place by way of the corridor, unless the piquete they are in happens to have the lugar de lazer right next to it. Although the corridor unites all piquetes, the cattle can only use their own piquete which they are using at this particular time, the lugar de lazer of their modulo and the corridor uniting those two. They naturally find their own way between their piquet and the plaza de lazer. The maximum length between any piquet and theplaze de lazer is 800 meters. Entrance to the other piquetes are closed. Electric fences, most of them powered by solar panels, enclose all piquetes.

Chico keeps a close watch on the status of the pastures. Like Gui, he uses a mixture of leguminosa and graminea. As soon as he sees an area that is not covered with forage, or is covered with invasive species, he directs his workers to remove the latter and to plant. He showed me patches which had just been planted, with both leguminosa and graminea, next to each other.

I have not become an expert on observing cigarrinha attacks, but I couldn’t see any and Chico says the quality of the pasture reduces the incidence of attacks. One could easily see the different piquetes and for how long each had been free of cattle. The ones who had ten days or more of rest were brilliantly and massively green. I readily agreed with him that they looked beautiful. Piquetes that had recently had cattle had some brownish pasture in them. Chico explained that this is natural; it’s the part of the graminea that is not eaten and turns that colour when older. After a week or more, it’s all green again. As with Gui, Chico does not use herbicides or insecticides since these kill beneficial organisms. He lets trees regenerate naturally on the pasture and plants a small number of trees he believes are particularly beneficial for the pastures (nim trees).

The workers who look after the cattle have learned how to assess when it is the right time to move them to the next piquete. But other tasks need the supervision of Chico. It is he who directs them to the place to clear and plant. His workers do not have the motivation to seek out and do this work on their own. The workers in charge of cattle should attend to them every day. When we were there, he found that the mineral salt supplement of one plaza de lazer was all gone. The worker in charge of that particular modulo of cattle had missed checking this in time. We fetched two bags of the supplement and the worker filled the empty troughs.

Chico explained to me that the cattle are docile, calm and easy to handle, and they certainly seemed that way. He said that’s their natural state when the pasture is always good for them. At one point, we could see five modulos, each with one group of cattle gathered together in one piquete, lieing down well fed and apparently content. Chico says the cattle will have this status more often than cattle of less intensively managed ranches, since food is plentiful and they spend less time seeking food. Less energy is used for moving and they add on more weight.

Recently eaten pasture on the piquete this side of the fence; lush green pasture on the other side, soon to be opened for the cattle.

For his 2 000 hectares of pasture, Chico has 24 workers. 7 of them tend cattle, each being in charge of cattle of three or four modulos. This is a larger number than what a less intensively managed ranch needs, because of the need to move to the cattle on a daily basis. In other ranches the cattle are left alone for longer periods in big lots. The actual time to move the cattle between piquetes is minimal, only 10 minutes or so, because of their docility and use to this.

The majority of Chico’s workers, 15, tend the pastures, clearing away invasive species and planting. Poorly managed ranches may have no workers at all to do this. When their pasture is newly formed, there is no urgent need for maintenance. The extensively managed ranch will gradually let the pasture degrade, after which an expensive one-time operation with preparation of the land by machinery, followed by fertilization and planting, has to be done. Perhaps herbicides and insecticides will be used in an earlier stage.

Two workers tend to the electric fences. These are functioning well. A trained person can set up one kilometer of fence in one day. After the initial investment and placement of the solar panel is done, they don’t have to be maintained.T hey work just fine. A more traditional ranch would not even need one worker for the fences, since the length of these are a fraction of those of those of a ranch using the Voisin system.

The workers have nice houses, spaced throughout the ranch, often in proximity to their work duties. The houses look almost middle-class from the outside, with nice tiled porches under veranda roofs. Inside, as could be expected, it is sparsely furnitured and gives a poorer appearance, but it is clean and kind of pleasant. Alone for a moment with the young woman of the house, whose husband was away tending cattle, I asked her what she really thought of living there. She said she liked it, mentioning its tranquility and quietness. All of the houses have solar panel powered electricity. Those closest to the ranch entrance have telephone.

What conclusions can be drawn from all this? Is it possible to arrive at two or three UA per hectare for the majority of all ranchers? It is easy to think that the 3.0 UA of Chico is out of bounds. He told me that when he attended a lecture of a researcher from ESALQ, who asked how many of the approximately 100 ranchers present who knew all of their lands, he was the only one present who raised his hand. It is worth noting that Chico only tends to this one ranch, whereas Gui owns one and administers two (one adjacent to the one he owns plus one further away), which reduces his possibility to give very close guidance.

Still, what Chico is doing is not extremely advanced. What is needed is care and perseverance. The single hardest thing could be arranging the actual lay-out of the piquetes and corridor, but that’s a one-time operation that technical assistance could be provided for. If the deforestation option is closed and a rancher wants more income, what alternative is there to intensification? One way of looking at the viability of this is to look at the economics. Chico told me he could not give me numbers for gross or net income. This is the only ranch he works, he owns it and he doesn’t like paper work. I will just make a very gross guess:

On the cost side, the one big extra must be the workers. Assuming a traditional ranch would use 3 workers instead of 7 for the cattle, none at all for the pasture and no worker for the fences since the length of these are only a fraction of those of Chico’s, he has about 20 workers more. He told me that each worker costs around 45 reais per day, including taxes and social security. Assuming six working days per week, and adding on a seventh day for the supervisor in case he isn’t included amongst the number of workers and for a possible subsidy for the housing, this means 20 x 45 x 360 = 324 000 reais per year. To this I add the cost of Chico’s time. He couldn’t give me any figure of his own time spent, saying it was his pastime, so I arbitrarily add 8 000 reais per month for this = 96 000 per year. The total extra cost then becomes 324 000 + 96 000 = 420 000 reais.

Electric fences are easy to install compared to the traditional barbed fences. Chico told me a trained person can put up one kilometer a day. The cost of the solar panels are coming down all the time, and he told me they function without problems and need no maintenance. He also has costs for the plants. For simplicity, I ignore those costs as I do with the extra costs of the traditional extensive ranches that I can think of: the large occasional cost of mechanized land clearing followed by fertilization and planting, and for herbicides and insecticides.

The extra income of Chico’s ranch is obvious: the higher quantity of meat sold per hectare of pasture. In Acre, the average UA per hectare is 1.2, higher than the average perhaps because of higher rainfall. His 3.0 UA means 1.8 UA more. The number of beef cattle adding weight is higher, since UA corresponds nearly to slaughter weight. I guess that three heads of cattle being grown for slaughter equals two UA so 1,8 UA should be equal to 2.7 heads of cattle. Chico told me he has breeding cows (pregnant, with calves or waiting to be inseminated) on five of his 25 modulos. I assume all the other 20 modulos, or rougly 80% of the 2 000 hectares = 1600 hectares, have recently demothered brezeeros, garottes or gado para engorde (the different stages of beef cattle grown for slaughter). Actually, there will be beef cattle growing on the other 5 modulos too; the beef calves still with their mothers and the fetus in the womb. Chico told me the beef cattle grow 300 grams per day in the lowest-rainfall season and 700 grams in the best months. These were slightly lower figures than Gui gave; they should have been slightly higher, since Chico’s cattle are sent to slaughter at the young age of two years, he told me, since they have such good pasture. Taking Chico’s figures, I assume an average growth of 500 grams per day and head of cattle. This will give a growth over the year of 2,7 x 1600 x 0,5 kilo x 360 days = 778 000 kilos of total weight. A rancher is paid for the useable meat which is 54% of the animal’s total weight, so net Chico will sell 420 000 kilos of meat over the year. A reduction for dead of sick animals gives 400 000 kilos.

He sells to the frigorifico (slaughter-house) that bids the highest price. Prices have come down recently, possibly as a result of the global economic crisis, from 80 to 60 reais for an arroba of meat which is 15 kilos i.e. four reais per kilo. This will give him 400 000 x 4 = 1 600 000 reais. This is almost four times higher than his extra labor cost of 420 000 reais, including his own time.

Maybe I am way off in this crude attempt to get a grip on the economics of cattle intensification. If I am not, it suggests that intensification is highly profitable, in the absence of the possibility of deforestation.

If deforestation is factored in, one would have to estimate the costs of deforestation, income from one-time logging, and a higher initial UA per hectare from the fertilization of the ashes before a lower UA sets in. Guessing, I would still think that intensification would pay off handsomely, if the figures above are not way off the mark.

So maybe a large technical assistance effort for intensification – which should be factored into the cost equation – would give great economic returns to ranchers and Brazil! As for the much greater labor costs, this can be viewed as something positive, given the underemployment in the country. Chico told me had no difficulty getting hold of labor.

It would be very interesting to have a cost-benefit analysis of the different options. Simplified, these can perhaps be described as traditional around one UA per hectare, semi-intensive around two UA per hectare as Gui’s ranch, and intensive 3 UA as Chico’s ranch. Chico doesn’t keep any records but Gui does and indeed has to since he is manager of two ranches that are not his own. He told me I was welcome to look at the records of his own ranch but there was not the time to do this.

Chico’s ranch, showing the lush green piquete on the other side of the fence.

Dairy cattle – more than 10 animal units per hectare

I also visited Mr Villas and his son, who carried out an extremely intensive cattle dairy management. He used only 1.2 hectares for 28 piquetes, each of just 20×20 meters and holding no less than nine milk-producing cows in addition to breeding and younger animals. The piquetes were located in a circular pattern, in the midst of which was a narrow stretch which the cattle moved to each day for water, mineral salt and shade. In addition, he had 3.5 hectares with sugar cane, banana and other crops which he fed his cattle in the four months of the least rainy season, to maintain growth and milk yield.

Usually the animals stay for only one day in a given piquet before being moved to another. They fertilize the soils every year, and provide calcium too. The fertilizer is the by far single most expensive item, costing one quarter of the sales of the milk. His son has learned to carry out artificial insemination, and they use precise calendar timing for various activities over the year to optimize breeding, growth and milk yields. They sell 80 litres of milk per day, which with the current price of 55 centavos per litre yields 45 reais per day. Over a year this means 16 000 reais. Assuming costs come to half of this, it means a net income of 8 000 reais in total, or 1600 reais per hectare given that there are about five hectares in all (1.2 for the piquetes plus the 3.5 for the feed crops). Comparing this to Gui’s 150–200 reais is a bit like comparing pears and apples; large beef-cattle and small dairy cattle ranches are quite different. E.g. the very high work input of Mr Villas and his son should be monetized. The extremely high labor intensity would not be viable in a beef cattle ranch. For one thing, labor on that scale may not be available. Furthermore, the value of the beef meat is probably not enough to support it. But it would be interesting to see some kind of comparison attempt.

Mr Villas Jr, with the electric fence just behind him separating the piquete with his dairy cattle and the piquete which is getting ready for taking on the cattle.

Can intensified ranching be replicated on a larger scale?

Acre has to some extent enforced zoning for several years, which has been an incentive for ranchers to be more productive. Some have apparently moved to Rondônia and the southern part of Amazonas state, where control is less. Upholding zoning will in turn produce rises in land value on deforested lands (this is, I was told, already happening in Acre), which will make poorly managed cattle ranching less attractive.
Amongst the conditions needed for intensified, sustainable beef cattle ranching on larger scale are, as far as I can understand:

•    The single most important condition may be policies that prevent land with forest handed out for free or at low cost for deforestation. Indeed, absent such policies, deforestation may in principle increase with intensification, given the incentives from a higher net income per hectare.

•    Development of a certification system for beef meat and well run cattle ranches, which will support these in accessing markets and credits.

•    Expansion of well run extension services for cattle ranches, which are presently very underfunded and understaffed. The best propagators of improved cattle ranching are the progressive ranchers themselves. The large ranchers can buy needed expertise, but small ranchers need technical assistance for free.

•    The supervisory role of the owner or manager is crucial. Often the owners rely heavily on managers. One way of getting the latter to become as diligent as Gui or Chico is to incentivize payment to them for this. Today this is very rarely used, Judson told me.

•    Indicators that are simple to use by big as well as small ranchers. These have already been developed for when it is time to rotate cattle. Each species of pasture grass is assigned a maximum length, when it should not be allowed to grow more i.e. cattle should enter, and a minimum length when the cattle should be rotated to another piquete.

•    Incentives for well-managed cattle ranches, e.g. by reduced taxes or credit availability. In the state of Mato Grosso do Sul ranchers get a higher price (by paying a lower tax) when the age of slaughter is under a certain age, which is a reflection of good pasture and cattle breeds. This kind of measure should be broadened in scope. There are already discussions in the Brazilian government to have terms and availability of credit, and subsidies of freight of fertilizer and acidic correctives linked to productivity of agriculture and ranching. This is a complicated procedure, but there is a pressure to move ahead. The pressure is both from an environmental point of view including climate change, with indications of negative effects for agriculture already present in Brazil, and from the productive sector.

•    For ranching, a simple indicator could be the number of kilos of beef meat sold per year, although there is the danger that this could hide overeating and non-sustainability, i.e. that less meat will be produced later. Example of a more sophisticated indicator would be that least e.g. 80 % of the pasture area is covered with forage food for the cattle. This could take a whole day for a trained person to judge visiting a large ranch. Satellite imagery can reduce the time for this; it is already possible to distinguish non-covered parts of pasture and invasive bushes (but not invasive low-height species) with satellite imagery.

•    Ranches pay the tax ITR, which could be modified to incentive good management.

•    An interesting pressure point that Judson mentioned as one that could be used by ATAB relates to the credits for the slaughter houses. After a large expansion, these tend to be in debt and are approaching a state of crisis as credits to them are being squeezed in the current economic situation. Linking credit to them with requirements that the ranches they buy from are well managed would be a powerful instrument. In Acre, three large slaughterhouse chains process about 75% of all beef meat produced in the state. In most of the Amazon, the local markets are supplied by small local slaughterhouses which are hard to reach with a relatively small proportion of the beef meat produced.

•    Indicators will have to be regional and even local, which increases their complexity. E.g. more fertile soils and a shorter dry season will correspond to higher productivity requirements. Lands with much steep slopes will produce less meat since cattle will have to exert more effort to move which yields less growth. Even areas close to each other have different conditions. Judson told me that Chico’s ranch had 100 mm more rainfall than Gui’s which slightly increased his productivity. He also told me that outside the Amazon, and even within the drier parts of the Amazon (such as Mato Grosso and eastern Rondônia) where the low-rainfall period is longer, it may not be feasible for even a perceptive rancher to avoid degradation requiring mechanized land clearing and fertilization, since the pasture planting in the uncovered spots may take a long time to mature.

•    With one national market for beef meat, and with an increasingly global market for beef meat emerging, it is equally important to make beef meat production outside the Amazon well managed.

•    Including cattle hides (leather) in the criteria and getting incentives for delivering good leather is important. Now the ranchers are not paid, or paid a fixed sum, for the leather of each cattle. Cattle hides are the second most important export item of Acre after beef meat, and ahead of timber.

•    All of the above assumes an awareness building amongst, and pressure built on, key actors in the beef cattle chain, including slaughterhouses, supermarkets, retailers, consumers and creditors in Brazil, and importers and consumers abroad. That is what this project hopes to continue building.

•    Perhaps the climate negotiations, which are now covering deforestation, can be put to good use in the cattle ranching aspect of Brazil.

Meeting with Amgios da Terra Amazonia Brasileira

A more detailed and updated analysis of the Amazon beef supply chain has just been completed. After additions and modifications by ATAB, media will be approached and hopefully a media impact achieved. With that as a base, the frigorificos (slaughter-houses) will be the first “target” to aim for having environmental conditionalities included in credits from banks. As mentioned earlier, they are vulnerable now, with large credit needs. Prime conditionalities to try for are things like transparency of suppliers (which properties the meat comes from) and the basic legality of the suppliers. We explored the possibility of starting with some kind of simple, basic minimum management criteria (e.g. having at least 80% of the pasture land covered with forage crops meaning that degradation is not more than 20%). The idea is not that the banks would use such criteria in an exclusionary way, but rather providing loans at a lower interest rate or with easier repayment conditions, or with a larger volume, for those who comply. There are already precedents in the banking sector for such differential payment terms, including for environmentally related areas.

In a later stage, during the three-year period of the next proposal to Forum Syd, it is planned to develop more stringent criteria, with different levels of achievement, with input from Embrapa.

The case for the frigorificos is even stronger because one bank, BNDES (the National Bank for Economic and Social Development), plays a dominant role as creditor to them. In 2008, no less than 48% of all its industrially related loans went to frigorificos, or six billion reais. It is owned by the federal government. Our work is further helped by the concentration of frigorificos into a small number of national chains, like Bertin, Friboi, and Independencia.

It seems the basic logistical requirements for conditionalities already exist. Roberto described how one major frigorifico, Independencia, already pays bonus to its suppliers if they meet certain standards of quality and delivery time.

As secondary targets, the banks giving credit to the rural sector would be targeted. These include the government bank BASA (Amazon Bank), and Banco Real. The loans to the ranching sector include credits for deforestation, purchasing breeding cows, reforming pasture etc. Nothing much concrete has happened yet in the talks with the supermarkets. As with the banks, it’s the public image that is crucial and the strive for media coverage is crucial. Wal-Mart may be one particularly promising supermarket chain. In an attempt to exploit a possible opening for leverage, ATAB is including two questions, on how the public sees the issue of beef meat in environmental terms, in a national public opinion survey.