The road to sustainable cattle ranching in Mato Grosso

May 31, 2017

Written by Edit Kiss, the Director of Business Development and Operations for Althelia, following her trip to Brazil for the Tropical Forest Alliance 2020 General Assembly. Edit and several other members of the TFA2020 including Ecosphere+ and Althelia Climate Fund colleagues, went on a site visit to Novo Campo, a sustainable cattle ranching project in the Mato Grosso state of Brazil financed by the Althelia Climate Fund. This is the second in a series of blogs about the TFA event. Read the first one here.

In March 2017, as part of the TFA2020 Second General Assembly meeting in Brasilia, ICV, a leading Brazilian NGO in the Brazilian Amazon together with its partners PECSA, a cattle ranching management firm headquartered in Alta Floresta and Althelia Climate Fund, a mission-driven impact investment fund, organised a field visit for TFA participants to showcase the practical experience of ICV’s Novo Campo Programme. ICV’s Novo Campo Programme, a sustainable cattle ranching programme implemented by PECSA and financed by Althelia aims to deliver a scalable model for beef production that removes pressure on intact Amazon rainforest in the state of Mato Grosso. The visit brought together more than 20 participants from governments, international and domestic NGOs and private companies.

Visiting Mato Grosso

It takes four flights from Europe or North America to get to Alta Floresta, and flying over Mato Grosso is a sobering experience - the massive forest loss due to agricultural expansion is impossible to miss. Mato Grosso has the highest historical deforestation rate among the Amazonian States in Brazil and has lost about 40% of its forest cover in the past couple of decades.

The primary driver of the forest destruction is cattle-ranching and with 30 million heads of cattle in Mato Grosso there are 10 times more cows than people in the state. Business as usual cattle-ranching in Mato Grosso is extensive and inefficient leading to continued forest conversion for pasture.

Just ahead of the second TFA General Assembly meeting and with looming headlines about the slow progress of the implementation of the zero-deforestation commitments by consumer goods companies, participants were eager to learn about the Novo Campo programme, and see the actual impacts and results on the ground. PECSA has contracted with 6 ranches for almost 10,000 hectares of restoration – which is the full scope of investment of the Althelia Climate Fund.

Bird’s eye view over Mato Grosso, Alta Floresta, March 2017

Our first ranch visit was to Bevilaqua, one of the first ranches to join Novo Campo. Dr. Celso Crespim Bevilaqua, a retired dentist who runs the ranch, described how he had been ready to give up his ranch because it stopped being productive (pastures have been degraded to “death” over the past decades), but then decided to join the Novo Campo programme – a decision led in part by his personal connection to one of the ICV coordinators for the programme at that time, Vando Telles now executive director of PECSA. Dr. Celso has been his dentist since his childhood!

Other ranchers were sceptical about the model at first, but now that they see the results at Bevilaqua, they want to copy it.

The results speak for themselves. The productivity of the pasture has increased by over seven times, restoration efforts in the riparian zones are improving biodiversity and will ultimately restore resilience to the ranch’s water supply.

Team picture of PECSA, ICV, Althelia, Ecopshere+, JBS and Mr Celso (fourth from the right) at his Bevilaqua Ranch

A new model

In the Novo Campo model, ranchers enter a 6-8 year partnership agreement with PECSA, providing the initial herd of cattle while PECSA’s team implements all the intensification practices on the ground. Since it’s a very capital-intensive model, Althelia’s impact finance was crucial to growing the programme from the initial test phase of 300ha to 10,000ha today. This has provided proof of concept for investors and opened up the model for capital markets to reach a larger scale, ideally at the state level.

PECSA performs an initial diagnosis of the ranch and develops a programme for restoration and intensification, including technical inputs and a strictly monitored rotational system (cattle is rotated every 2 day). The programme also includes efficiency improvements to the cattle’s drinking and food supply that increases productivity, meat quality, and reduces methane emissions. The project, besides being fully compliant with Brazil’s Roundtable on Sustainable Livestock (GTPS) and the Good Agricultural Practices (GAP), has a management system that is fully traceable back to the purchase of calves ensuring no “laundering” happens. This means that any cattle purchase is registered in PECSA’s geo-database together with the Animal Transportation Form issued by the sanitary authorities, which registers all cattle transactions in a government database.

Sustainable cattle

The real beauty of the Novo Campo model is that it does not require any new technological breakthroughs, just better management, organisation and access to financial resources. So it represents an excellent opportunity for urgent climate action as well as a means to advance the Sustainable Development Goals.

The big win beyond the farm level results, which is a reduced greenhouse gas footprint potentially as much as -50% per hectare and -90% per kg of meat based on the Embrapa Good Agricultural Practices guidelines, is of course avoided pressure on standing forests. The gain in avoided deforestations was a key factor for the investment decision by the Althelia Climate Fund as Althelia's mission is to align the earth’s economy with its ecology by financing the transition towards sustainable land use and measuring its impacts for reduced tropical deforestation, climate change mitigation, biodiversity protection and contribution to a fair and sustainable living of rural communities.

In order to realise the significant conservation opportunities from this new model, it will be important to complement the bottom up approach with implementing a jurisdictional REDD+ system. This system will need to include top-down command and control measures to ensure that the forests are not cut down for soy or timber production and that results-based climate/REDD+ finance can flow back to the field to scalable projects such as Novo Campo. Fortunately, there is already a REDD+ law in Mato Grosso. The governor, Pedro Taques, at the side-lines of COP21 in Paris, launched the Produce, Conserve, and Include strategy aiming to keep 4 Gt CO2 emissions from forests out of the atmosphere by 2030 which will be a key pillar of the upcoming REDD+ system and will also help implement the zero-deforestation commitments meaningfully in the state.

Cattle heard on restored pasture (in dry season)

The programme received overwhelmingly positive feedback from the visitors. Of course many challenges remain such as extending it to those ranches that have been continuing deforestation since 2008 (as those are on the frontiers), reaching smaller ranches or reducing input use etc. to mention a few.

All project partners recognise that there is no room for complacency, the 10,000ha is the first stage of a learning by doing journey on the road to sustainability in Mato Grosso. But this commercially scalable model is probably one of our best chances of defying the cattle ranching deforestation challenge in the Brazilian Amazon. Therefore PECSA, ICV and Althelia are working to roll out the next phase of the programme on 100,000ha of land, a significant scale up representing about 35% of total cows in the area of Northern Mato Grosso, in the coming 5 years.

Althelia Funds