Combining responsible soy with intensified cattle ranching

In Mato Grosso, IDH works with public and private (soy and beef) stakeholders, in cooperation with the state government and guided by the state’s Produce, Conserve and Include (PCI) strategy, to address deforestation and forest degradation. Our overall strategy is to make soy farming more responsible so it has less environmental impact, and to intensify cattle ranching to free up land for agricultural production without having to convert forest into arable land.

On soy, IDH brought together large soy traders and producers with an interest in responsible soy production in a stepwise approach towards compliance with the Brazilian Forest Code and/or the European Feed Manufacturers’ Federation (FEFAC), including legal registration. In 2018, over 0,5 M MT of FEFAC compliant soy was produced by major soy producers. On the market end IDH accelerates market uptake in the EU for responsible soy to create economic incentives for responsible soy farming.

IDH combines this strategy with cattle ranching intensification for beef production in a Verified Sourcing Area (VSA) pilot in Juruena Valley: “The Sustainable Production of Calves Program” for which the initial PCI compact was signed in May 2018.

This cattle intensification program is co-funded with Carrefour Brazil (EUR 2.4 million), who also signed a commitment to source sustainable beef produced in the Juruena Valley, enabling VSA pilot to be built. With the aim to scale this to 2,5 million ha, the land intensification will enable considerable agricultural expansion without the need for forest conversion in the next ten to fifteen years.

IDH expects to unlock EUR 38 million from private companies for cattle intensification and forest restoration. It proofs a business model that can be scaled up to the whole of the Juruena Valley region, where there is a potential to leverage another EUR 476 million in investments before 2030.

Partnering with the state cattle rancher’s association Acrimat, we can scale up the program across the whole of Mato Grosso state, and create access to investments from the PCI Institute (co-established by IDH in 2018 as legal entity) and REDD for Early Movers (REM) funding.

The Juruena Valley implementation model is being replicates in Sorriso, Barra do Garças and Paragominas (Pará State). We expect to attract additional investments for the development of a VSA with specific commodity chains (next to beef and soy) such as cocoa, timber and Brazil nuts.

The state of Mato Grosso is the largest agricultural producer in Brazil, it has a total area of 90 mi ha, with more than 64% of its native vegetation preserved, giving it the quality of a biodiversity hotspot, spanning three biomes: Amazon 47,7 million hectares, Cerrado 36 million hectares and Pantanal 6,3 million hectares. It produces 9% of the global supply of soy, 60% of Brazil’s cotton and is the top producer of the country’s beef, supplying to both domestic and international markets. Deforestation is 2.485 km2 on an annual basis, of which 95 percent is illegal, mainly driven by registered private land, 55% and unregistered land, 25%. Related indigenous land and rural settlements deforestation lead to 22%. Through its support to Produce Conserve and Include (PCI) Institute, IDH works with Producers, Government, NGOs and business partners to deliver on sustainable production of soy, beef and timber while protecting and restoring native vegetation.

Total land cover 90 million ha
Total forest cover 56 million ha
Protected forests   19 million ha
Forests on private land  37 million ha
Pasture land 24 million ha. Two thirds are unproductive and degraded.
Crop land 8 million ha
Other productive land 2 million ha
Landscape features Amazon rainforest, Cerrado (tropical woodland), Pantanal (wetland)
Main commodities soy, beef, cotton
Main causes of forest loss deforestation for pastures


Through our landscape program in Brazil, we support the government of Mato Grosso’s ambitious green growth strategy, PCI. The strategy was announced at the COP21 in Paris in 2015 and aims to increase agricultural production and efficiency; conserve remaining natural vegetation; and improve the socioeconomic inclusivity of smallholder farmers and traditional communities by 2030.

Summary of the PCI goals by 2030:

Produce Conserve Include
Replace 6 million ha of low-income pastures with high productive crops: Rehabilitate 2,9 million ha of APP Increase smallholder participation in domestic food market from 20 percent to 70 percent
3 million ha of grains Eliminate illigal deforestation by 2020 Promote land regularization in 70 percent of smallholder farms
2,5 million ha of livestock (intensification) Reduce deforestation in Amazon forest by 90 percent and in Cerrado by 95 percent Provide technical assistance to all smallholder farmers
0,5 million ha of planted forest Conserve 1 million ha of those areas likely to be deforested Increase access to credit
Another 6 million ha of sustainably managed natural forest

You can download the detailed PCI strategy here

In addition to supporting the green growth strategy at state level, we work at the municipal level to link beef and soy production to forest protection. This also ensures the inclusion of smallholder farmers in the value chain and stems from our concept of Production, Protection and Inclusion – PPI.

In a PPI compact, public and private stakeholders agree on a land-use plan through which to achieve the sustainability targets set by PCI. We focus on four regions to develop PPI compacts and to bring in investment for PPI deals.

1. Juruena Valley Compact, in Mato Grosso State: includes two municipalities (Juruena and Cotriguaçu), with the following lines of strategic action. There are 22 signatories from the public sector (state and local), private sector, civil society and producers.

Produce: To promote Technical Assistance (ATER in Portuguese) for beef cattle and dairy cattle for family farming, as well as for medium and large properties; to promote the recuperation of degraded areas and to make production viable depending on the suitability of the soil; to increase areas of timber and non-timber forestry management through incentives for making the legal processes less bureaucratic depending on the regional specifics; setting up regions that have product origin certification (sustainable production activities for small, medium and large family farming).

Conserve: To stimulate the reduction of deforestation, to go forward in validation of the CAR and in implementing the PRA; To spread information regarding the environmental requirements; To promote compensation for legal reservation and to set up incentives for the standing forests.

Include: To expand Technical Assistance and Rural Extension (ATER in Portuguese) in rural settlements and to promote regularization of the ownership of the land; Operational, strategic and commercial support for products from family farms; to define the use of small areas in accordance with the best production plans.

2. Sorriso Compact, in Mato Grosso State: developed in the municipality of Sorriso with the following lines of strategic action. There are 22 signatories from the public sector (state and local), private sector, civil society and producers.

Produce: Foster the expansion of the production of alternative energy in the municipality, such as solar, biofuels (biodiesel and corn ethanol) and biomethane from swine manure; Encourage the development of soybean areas under the RTRS certification; Encourage the development of soybean areas under the conventional (Non-GM) production model; Encourage the development of more areas of planted forest for biomass purposes; Support actions that promote the industrialization and local processing of primary products: increase the quantity of agricultural products processed or industrialized in Sorriso in order to add value to local production; Value added to local meat production: support to the development of beef finishing projects and increase in poultry, pork and fish production, especially with the use of by-products of the local industry.

Conserve: Rural Environment Cadaster (CAR) validation / Advancing on Environmental Regularization Plans (PRA) Register 100% of the agricultural area in the CAR and accelerate the validation of the State Department of Environment (SEMA) in the verification of liabilities or surplus of native forest; Create options on financial mechanisms for legal reserve compensation: Viability of the Environmental Reserve Quotas (CRA) in the municipality, generating valorization of forest surpluses in those properties that have a positive balance, stimulating the maintenance of open productive areas and compensation in areas of lower agricultural ability and income over the standing forest.

Include: Expansion of technical assistance and rural extension on settlements: Expand free and scientifically proven technical assistance to small producers, with the aim of producing more and generating more income; Support for Agrarian Regularization: Accelerate with the Mato Grosso Program of Sustainable Municipalities (PMS) and Terra Limpo Program the land regularization of small producers who do not legally own land; Strengthening of municipal programs focused on family agriculture: Increase the reach of the four municipal agricultural programs (honey, milk, vegetables and fruits) to small producers and of relevance to the local activity; Cocoa feasibility study for family agriculture: Evaluate in detail the entry of the cocoa crop into the municipality, so that it has volume for potential buyers and is economically, socially and environmentally balanced for local conditions.

3. Barra do Garças Compact, in Mato Grosso State: developed in the municipality of Barra do Garças-MT with the following lines of strategic action. There are 35 signatories from the public sector (state and local), private sector, civil society and producers.

Produce: Foster the integration of small/medium/large-scale growers and rural farmers in the priority productive chains of the municipality; Foment the intensification of the use of the ground in livestock and grains production; Put forward the adoption of integrated crop/livestock/forestry systems; Encourage the production of renewable energy through biomass; Make the municipality a reference in the production and quality of Early Calf.

Conserve: Fight illegal deforestation; Support the implementation of the Rural Environmental Registration (CAR) in 100% of the municipality; Implement the Environmental Regularity Program (PRA), with recovery of the liabilities of the Permanent Preservation Areas (PPA) and Legal Reserves (LR); Put forward water and soil conservation techniques; Adopt Livestock and Agricultural Best Practice (BPA) techniques for rural farmers and family farmers; Foment Environmental Services Payment Programs (PSA); Encourage Environmental Sanitation in the rural properties in the municipality.

Include: Expand Specialized Technical Assistance and Rural Extension in settlements, small properties and indigenous villages, especially for the following productive chains: beekeeping, olericulture, dairy livestock farming, pig farming, sheep-goat breeding, fruit growing, fish farming (aquaculture and artisanal fishing); and products deriving from organic production; Foster land regularization and the environmental adequacy of rural properties in partnership with the competent authorities; Foster operational, strategic, commercial and professional training support for rural farmers and family farmers.

Others: Foment the Development of Sustainable Tourism in rural areas; Foster the Monitoring and Origin Certification of products arising from rural areas; Foster and encourage the participation of street vendors, growers and family farmers to put forward the productive chains in the municipality.

4. Paragominas, in Pará State: with 430.000 ha farm land and protect 1.4 million ha of forest. The compact is in place thanks to a decade of convening work by Imazon. The plan is to make a de-risking deal with Sicredi for small-scale cattle and soy farmers.


IDH works at the market end in Europe to drive the uptake of deforestation-free soy produced in Mato Grosso. We collaborate with the European feed manufacturers federation, FEFAC; the EU vegetable oil and protein meal industry association, FEDIOL; as well as CGF . In early 2017, we brought together the aforementioned market players and the powerful industry associations in Mato Grosso, Aprosoja and ABIOVE. In an MOU, the parties committed to align and work together on mainstreaming sustainable soy production in Mato Grosso.

Publications

Title Type Year
Terms of reference (ToR) – IDH Brazil – PCI Balsas Region Terms of Reference 2020
Terms of reference(ToR): IDH Brazil – Landscapes – Barra do Garças Post Compact Activities Terms of Reference 2019
Terms of Reference ISLA PROGRAM MATO GROSSO Benchmarking of SISFLORA, the EUTR, FSC and PEFC Terms of Reference 2019
Termos de Referência Território Sustentável do Mato Grosso Suporte da SEMA na Análise do CAR Terms of Reference 2019
Terms of Reference Mato Grosso Landscape SEMA Support on CAR Analysis Terms of Reference 2019

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Public and private partners in IDH Initiatives