Novo Campo Programme, Mato Grosso State

The Challenge of Cattle Ranching in the Amazon

The unsustainable management of cattle ranching continues to play a significant role in the destruction and degradation of the Amazon. Today, due in part to lack of focussed investment to maintain ecosystem function,  pastures and soils are degraded, and water supply is threatened.  Productivity is low and outputs are falling short of the market’s expectations, which means that large swathes of the Amazon are getting caught in low investment, low technology and poor performance trap. The result is rolling forest clearance, loss of biodiversity and ecosystems, as well as significant emissions of greenhouse gases. The Brazilian cattle sector is now facing converging pressures: on the one hand, the industry is responding to meet the increasing demand for beef (largely fuelled by export markets in Asia and elsewhere). On the other,  pressure from large clients and civil society is pressing the cattle industry to remove deforestation from its supply chain and to achieve improvements in both product quality and sustainability.

Piloting Solutions: Sustainable Intensification and Traceable Supply Chains

The Novo Campo sustainable cattle ranching programme, led by Brazilian NGO Instituto Centro de Vida (ICV) is a pioneering programme in the Alta Floresta ranching hub of Brazil’s Mato Grosso state.  Novo Campo aims to establish a proof of concept of the theatre effectiveness of Good Agricultural Practices (GAP-Protocol) in small to medium-size ranches in order to restore degraded lands with improved pastures,  increase productivity, better animal welfare and greater product quality through a package of better nutrition,  husbandry and health.  Novo Campo has already increased the economic,  social and environmental performance of participating farms and as it scales,  the programme will be a fundamental step towards the realization of fully traceable zero-deforestation beef,  contributing to the State of Mato Grosso sustainability goals embedded within its emerging jurisdictional REDD+ programme.

Althelia Investment

In order to operationalise and boost the programme’s implementation,  PECSA – Pecuária Sustentável da Amazônia (Amazon Sustainable Cattle Ranching) has been launched as a spin-off of ICV as a technical assistance,  management and investment aggregation firm.  PECSA will operate as Novo Campo’s technical assistance and project delivery arm, with a target to manage in excess of  100,000 hectares of pastures and 340,000 head of environmentally compliant cattle for the supply of high-quality beef over the next five years.

Althelia has provided PECSA with €11.5m financing facility which enables ranchers to fully reform pastures as well as riparian forests. The investment also helps to implement the necessary infrastructures and facilities for rotational grazing systems, provide health and animal welfare services, technical assistance, a route to market and provide the technical protocols for traceable forest-friendly beef. Since the start of the project, 6,879 ha of degraded pastures have been restored and sustainable management and had contributed €30m to the local economy through supply chain spend.

The investment is provided by Althelia to a partnership model between PECSA and individual Cattle Ranchers,  where the profits of the venture will be shared in a transparent and equitable benefit sharing structure fully compliant with Brazilian forest code and GAP.

Scaling-up

By 2017,  ACF and PECSA plan to have proof of concept of this investment fully implemented.  This would enable Althelia to carry out a second, much more ambitious investment in order to reach scale throughout the 1.4m ha of mostly degraded pasture in the Alta Floresta and beyond, accelerating the transition of Amazon cattle ranching towards sustainability.

Althelia Funds