Which Region Has Increased Deforestation to Make Beef for Hamburgers

Cattle ranching in Brazil, home to the world's second largest herd, remains a major crusade of deforestation. This tendency continues despite meatpackers and retailers having fabricated commitments to deforestation-free supply chains in the final ten years. This report describes the economic role of the cattle sector in Brazil, key supply chain actors, their role in deforestation, and potential solutions to better sustainability performance. The supply chain relationships of the pinnacle five retailers and meatpackers with Amazon plants expose the Brazilian retail sector to material run a risk from sourcing unsustainable beef.

Download PDF here: Cattle-Driven Deforestation in Brazil

Key Findings

• Lxxx-one pct of Brazilian beef is consumed domestically, and retailers are the key supply channel. Carrefour (FR), GPA (Group Casino (FR)), Walmart Brasil (Advent International (U.S.), Cencosud (CL), and Grupo Muffato (BR) control 75 percent of the retail market. Retailers are exposed to deforestation risks through the beef they source. Carrefour, GPA, and Walmart take committed to nix-deforestation.
• The acme retailers source from meatpackers with Amazon plants. Xc-ix meatpackers are responsible for 93 percent of slaughters in the Amazon. Supply sheds overlap with the agricultural frontier and regions with loftier deforestation rates.
• Slaughterhouses in the Amazon that have not signed agreements (TAC) with the Brazilian authorities to tackle deforestation concur xxx percentage of agile slaughter capacity. They exercise not monitor the origin of cattle and create leakage of deforestation-linked beef. This state of affairs poses high risks to any retailer that sources from them. Twenty-3 of these active plants hold licenses to export beyond state borders.
• Sourcing from slaughterhouses with TACs may likewise carry big risks, as their supply sheds accept experienced deforestation. TAC slaughterhouses accept seen an estimated 8.iii million ha of deforestation within their buying zones between 2010 and 2015. Links betwixt TAC-signatories and ranches with deforestation were documented in Pará in 2016.
• Meatpackers lack constructive tracking systems to monitor and control their indirect supply chains. While TAC-compliant slaughterhouses monitor their directly suppliers, cattle commonly move between various locations during their lifespan. Thus, cattle may be raised on recently deforested pastures before moving to a compliant ranch. A lack of admission to tracking data, insufficient police enforcement, and express finance for sustainable intensification complicate the upshot.
• Retailers with deforestation-linked beef in their supply chains are exposed to financial risks. These financial risks could result in reputation risk, acquirement-at-risk, college operational costs, and college financing costs. For retailers, this risk may shift to their (publicly-listed) foreign parents.

Livestock Farming: seven.iii percent of Brazil's 2016 GDP

Cattle ranching primarily takes identify in the N region, overlapping with the Amazon Biome and the Central Due west region of the country. That region overlaps with the Pantanal, a large tropical wetland area. As shown in Figure 1, the Northeast region, including the Cerrado, a biodiverse wooded savanna, is also home to a large cattle herd.

Figure 1: Geography of Brazilian cattle herd

Source: ABIEC, 2017.

Livestock farming generated BRL 458.2 billion (USD 140.7 billion) in 2016. This amount accounted for 31 percent of Brazil's agribusiness Gross domestic product and 7.3 percent of its full GDP. Livestock farming generated USD six.two billion in export revenues in 2017 while creating 360,000 direct jobs. Brazil'southward cattle herd has grown from 158 million heads in 1996 to 219 1000000 in 2016. During this period, pasture used for this cattle herd decreased from 184 million ha to 167 one thousand thousand ha, leading to an increase in stocking rate from 0.86 heads per ha in 1996 to 1.31 heads per ha in 2016. Brazil's herd is the world's 2^nd largest cattle inventory, accounting for 23 percent of global stocks.

Effigy 2: Brazilian beef production, consumption and export, 1996-2017

Source: USDA FAS, 2018.

Brazil's domestic marketplace consumes lxxx-one percentage of the country'south beef — a per capita consumption of 36 kg. As shown in figure two, Brazil's beef product increased 51 percent since 1996, reaching nine.half-dozen million metric tons (mt). Brazil accounts for fifteen percent of global production. Nineteen percentage (1.9 meg tons) goes into export, making Brazil the leading exporter of beef globally. As shown in Figure 3, central consign markets are Hong Kong, Egypt, People's republic of china, Russia, and the European union. Altogether, they deemed for 65 per centum of Brazilian beefiness exports past volume in 2016.

Figure three: Brazilian beef export destinations, 2016

Source: ABIEC, 2017

Brazilian Cattle: Few Slaughterhouses Boss the Market

Within the Legal Amazon, 128 active slaughterhouses belonging to 99 companies were responsible for 93 percent of slaughtering in 2016. Of these, 71 slaughterhouses are under Federal Inspection (SIF). SIF allows these slaughterhouses to trade across state borders, and they often accept consign approval. The other 57 autumn under State Inspections (SIE). SIE allows for marketing in the production state.

The largest players in the beef product sector are JBS, Minerva, and Marfrig. These companies command around seventy percent of the cattle slaughter chapters in the Amazon. JBS and Minerva also have slaughterhouses in the Matopiba region (Maranhão, Tocantins, Piauí and Bahia), the agricultural borderland area of the Cerrado. From 2007 to 2013, the Brazilian government ran the "National Champions" initiative to transform companies into large multinational corporations. This action helped several Brazilian meat companies become global industry leaders, which was as well enabled by a wave of international consolidation in the industry. Massive investments of public money through the Brazilian evolution bank BNDES and its investment arm BNDESPar, namely in JBS, Marfrig, and BRF, supported this endeavor.

Ten large slaughterhouses with processing units in the Brazilian Amazon and Cerrado states are listed in Figure four.

Slaughterhouses typically procure cattle locally. The radius in which a slaughter-house purchases cattle depends on several factors, particularly transport costs and the availability of cattle in the surrounding surface area. Buying zones of slaughterhouses with SIF registration reach on boilerplate 360 km, while those of SIE registered plants on boilerplate attain 153 km. In extreme cases, the reach may be up to 1,000 km for a slaughterhouse in a remote area with limited cattle supply and with access to cheap river transport. Meat from the Amazon is sold throughout Brazil.

Effigy 4: X leading meatpackers in Amazon and Cerrado states, 2016

Source: Imazon, 2017; Ministry of Agriculture, 2018. ^aStates: Acre (AC), Maranhão (MA), Mato Grosso (MT), Pará (PA), Rondônia (RO), Tocantins (TO).
^bbold thirty working days per month.

A small share of cattle raised in the Amazon states is slaughtered in SIF-controlled plants in other states. For instance, 21,099 animals originating from Amazon states were slaughtered in the state of São Paulo in 2015 (1 percent of full slaughters in Sao Paolo). In 2014, this effigy stood at 69,485 animals (two percent of full slaughters).

Brazilian Cattle: Retailers Are Key Beefiness Sales Channel

Supermarkets are the most of import distribution channels for food in Brazil, bookkeeping for more than 50 per centum of food sales. Inside this channel, the leading retail chains likely account for a large share of the beefiness volume sold in the country. Figure 5 lists the five leading supermarket groups in Brazil. Amid these, strange parents control the four largest.

Retailer	Parent	Owner-ship	Acquirement 2017 (USD mln)	Marketplace share 2017
Carrefour Comercio Industrial	Carrefour (FR)	Listed	xiv,983	26.v%
Grupo Pão de Açucar (GPA)	Groupe Casino (FR)	Listed	14,616	25.8%
Walmart Brasil	Advent International (US)*	Listed	viii,505	15.0%
Cencosud Brasil Comercial	Cencosud (CL)	Listed	2,576	4.half-dozen%
Irmaos Muffato & Cia	Grupo Muffato (BR)	Private	1,814	3.ii%
Other			14,075	24.9%
Total			56,569

*Walmart appear in August 2018 that it sold eighty percent of its stake in Walmart Brasil to Advent International (United states). Source: Abrasnet, 2018, USDA FAS, 2016.

Carrefour, GPA, and Walmart take stores throughout the state, including several Amazon states, equally shown in Figure half-dozen below. These stores may also source from SIE-controlled slaughterhouses in Amazon states. Cencosud and Grupo Muffato are not present in Amazon states and tin can only source from SIF-slaughterhouses in the Amazon.

Figure half dozen: Presence of top retailers in Amazon states

Source: Retailer websites

Cattle Sector Causes Eighty Percent of Brazilian Deforestation

Cattle ranching is connected to a range of social and environmental impacts, including slavery, corruption, loftier GHG emissions, water consumption, and deforestation. Up to 80 percent of Amazon deforestation is owing to the cattle sector. Cattle is also  a key contributor to country conversion in the neighboring Cerrado Biome. The dynamic of soy cultivation replacing cattle pasture has led to ranchers moving deeper into agricultural borderland areas and converting yet-untouched forest.

Cattle Sustainability Commitments Since 2009

In 2009, Greenpeace exposed the role of cattle breeding and ranching as a driver of deforestation in the Amazon. It uncovered illegal practices linked to slaughterhouses, such every bit forest devastation and modern slavery. Equally shown in Effigy 7, this report led to Greenpeace and four of the major beef producers in Brazil (JBS, Marfrig, Minerva, Bertin – acquired past JBS afterward the same yr) to sign multilateral Cattle Agreements (G4) to increase sustainability in the sector.

Figure seven: Commitments under G4 and TAC sustainability agreements

The lawsuits led to slaughterhouses signing legally binding Terms of Adjustment of Conduct ( TACs ) every bit a federal counterpart to the G4 (Figure seven). Initially limited to Pará, the TACs have since expanded to other Amazonian states, including Acre, Rondônia, Amazonas, and Mato Grosso.At the same time, the Federal Prosecutors Offices (MPF) initiated 21 ceremonious deportment against beef companies, asking for BRL two billion (USD 1.1 billion) in compensation due to ecology damage. Sixty-nine companies — including leading Brazilian retailers Carrefour, Walmart, GPA — were asked to leave sourcing relationships with suppliers involved in illegal Amazon deforestation.

As of 2016, TACs covered 63 out of 128 active SIF slaughterhouses in the Amazon. If not followed, the MPF is authorized to acquit out sanctions against companies. The implementation of both the G4 and TAC agreements then far focus on direct suppliers of cattle from the terminal subcontract where an animate being stayed before slaughter.

The Brazilian Development Bank (BNDES) introduced Resolution 1854 in 2009. The Resolution requires companies active in cattle slaughtering and/or production of meat products to reach certain social and environmental criteria and guidelines when requesting fiscal support. These targets are in addition to existing legal requirements. Companies also must submit monthly functioning auditing reports.

Deforestation Rates Declined From 2006 to 2013

A combination of factors led to a considerable decrease in deforestation in the Brazilian Amazon between 2006 and 2013. Impactful deportment included: the 2006 Soy Moratorium, a voluntary agreement between civil lodge organizations, government, soy traders and buyers; credit restrictions imposed past Resolution 3545 by the National Monetary Council aiming to reduce fiscal incentives for deforestation and Resolution 1845 by BNDES; and slaughterhouses signing the G4 and TACs.

Equally a issue of the above requirements, the registration of properties in the Rural Environmental Register (Cadastro Ambiental Rural, CAR) increased rapidly after 2009. The Car is a type of identification carte du jour for a property and its owner required nether the Brazilian Forest Code. In Pará, the share among suppliers of the four large slaughterhouses that signed both supply chain agreements increased from two percent in 2009 to 96 percentage by the terminate of 2013.

Deforestation Rates Increased Again Since 2014

Nonetheless, since 2014, deforestation rates accept increased, as shown in Figure 8. Illegal deforestation and human-induced fires used to articulate land for cattle or other agricultural activity have largely driven this development. An amnesty of illegal deforestation, lack of enforcement on prohibitions of deforestation and fires, and a reduction of protected areas under the current Brazilian administration have led to these circumstances.

Figure eight: Brazilian tree cover loss, 2011-2017

Source: WRI, 2018

The influential agri-concern anteroom in the Brazilian Congress, the bancada ruralista, has initiated legislative and administrative changes that enable the further conversion of native wood to pasture and cropland. Offenders have faced little take a chance of punishment. Obtaining property rights for illegally occupied and cleared lands became easier while the authorities weakened country rights for indigenous peoples. Fifty-fifty though 95 percent of fines imposed by the environmental agency IBAMA were never paid, president Temer in October 2017 implemented an amnesty of USD 2.i billion in fines for illegal deforestation. Meanwhile, the authorities too cut budgets of the environmental agencies (IBAMA and ICM-BIO) and the National Indian Foundation (FUNAI), further undermining their power to achieve deforestation-related duties.

Cattle ranching continues to be the leading crusade of Amazon and Cerrado deforestation. This tendency is due in big part to the cattle agreements focusing on the directly suppliers of slaughterhouses and leaving the indirect cattle supply chain thus far unmonitored. A TAC is thus no guarantee of deforestation-free beefiness, due to leakage and insufficient monitoring and implementation.

Risks Present in Indirect Cattle Supply Concatenation

As shown in Figure 9, the Brazilian cattle supply chain involves various locations from birth to slaughter, leading to different levels of transparency and visibility. For each direct supplier of a meat processor, indirect suppliers may as well be involved. They could include several transactions of animals betwixt nascency and slaughter.

Effigy 9: Visibility stages in the Brazilian cattle sector

Source: Proforest, 2017.

Cattle may spend up to 75 percent of their lives on indirect supplying ranches. With cattle raising in Brazil taking up to 4 years, which is i year longer than in the U.S. or Canada, the window of potential exposure to illegal practices becomes larger.

Leakage and Laundering Undermine Result of Cattle Agreements

The slaughtering procedure is a bottleneck in the beef supply chain. With a comparatively small number of slaughterhouses sourcing from a huge number of cattle ranches, introducing the G4 and TAC at this point was a strategic choice. Notwithstanding, that was not strong plenty to stop the advance of cattle-driven deforestation. Co-ordinate to enquiry by Academy of Wisconsin-Madison professor Holly Gibbs et al. (2018, unpublished), under the agreements, just 17 percentage of ranches in Pará and Mato Grosso are monitored every bit direct suppliers of TAC slaughterhouses.

Initiatives for cattle supply concatenation monitoring accept so far focused on the direct relationships, covering the fattening stage in the last three to twelve months before slaughter. Leakage and fraud in the indirect supply to slaughterhouses are not prevented, despite the mix of policy interventions and supply chain initiatives aiming for a decoupling of deforestation and cattle ranching. Neither the private sector nor the MPF have yet to finer control the indirect supply concatenation of cattle.

Figure 10: Leakage and laundering of deforestation-linked cattle

Source: Gibbs et al, 2015

Consequently, cattle fattened on noncompliant properties still enter the beefiness supply chain covered past TAC or G4 (Effigy x). Different strategies to wash cattle destined for a compliant slaughterhouse are as follows:

• Ranchers have multiple properties/CAR registrations. They raise cattle on embargoed or otherwise restricted areas and motility them to a compliant and CAR-registered property of the same possessor.
• Calving ranches and other intermediary cattle raising locations sell cattle to intermediaries or tier-one suppliers that are not showing upwardly on the Brazilian Environmental Plant (IBAMA) or state embargo lists. The intermediaries or tier-one suppliers tin then sell to signatory slaughterhouses.

The restriction of public admission to information regarding CAR registration and transport of cattle betwixt ranches and from ranches to the meatpacking plants can facilitate laundering. The Animal Transport Allow (GTA) is obligatory for veterinary health reasons. State animal health control agencies issue the permits. However, Pará is the simply state in the region that allows total public admission to CAR data for ranches.

Leakage into unregulated supply chains occurs when cattle from properties implicated in illegal practices is sold to slaughterhouses without monitoring systems or commitments. Leakage undermines the effect of agreements and poses unfair contest for compliant companies that exclude ranchers involved in illegal practices. Deforestation can also be "exported" to other states as ranchers can sell to meatpacking plants in neighboring states. For instance, ranchers from Pará can likewise sell to slaughterhouses in Tocantins, Amapá, Amazonas, and Maranhão. In improver, there is a limited number of live transports to slaughterhouses outside the Amazon.

Despite the persisting sustainability issues in the indirect cattle supply chain, Alix-Garcia et al. documented in 2015 that the G4 meatpackers continued to acquire plants in deforestation hotspots in Mato Grosso and Pará after signing G4 and TAC agreements.

TAC Signatories Remain Exposed to Largescale Deforestation Risk

A 2017 report by Imazon analyzing companies with SIE or SIF registration in the Legal Amazon establish that these companies tin straight or indirectly influence an estimated 390,000 ranches. These ranches hold an estimated cattle herd of 79 million heads, 93 per centum of the full in that region.

As of 2016, thirty percentage of the active capacity in the Amazon is in slaughterhouses that have not signed a TAC. Of these 65 plants, 23 have a SIF registration and can thus trade their products across land borders (Figure xi). Of a potential total of 59,824 daily slaughters in active meatpacking facilities, 17,751 were not covered by a TAC.

Figure eleven: SIF-registered active slaughterhouses without TAC in 2016

Out of all active meatpacking plants in the Amazon registered with SIF and SIE, 63 (49 percent) had signed a TAC in 2016. These slaughterhouses remain exposed to deforestation risk, equally the estimated purchasing zones of those companies jointly cover:Source: Imazon, 2017.

• 86 percent of the total of embargoed areas by IBAMA;
• 83 per centum of the area deforested from 2010-2015 that was not embargoed (although a large part may exist illegal);
• Nearly 85 percent of the areas under greatest risk of deforestation from 2016 to 2018 (of a full of 1.68 million ha of forests).

The overwhelming majority of slaughterhouses in the Amazon remain exposed to the risks associated with deforestation:

• TAC-signatories do non control their indirect suppliers and are thus affected by fraudulent carry;
• Non-signatories do not adopt whatever form of control over direct or indirect suppliers, providing leakage channels for ranchers involved in unsustainable practices.

Based on Imazon calculations, some meatpackers active in the Amazon are much more exposed to deforestation risks in their buying zones than others (Figure 12). This situation is particularly an upshot for JBS, the largest beef producer in the Amazon. A second group, with slightly lower exposure, includes Frigorífico Redentor, Vale Grande (Frigol), Frigo Manaus, Marfrig and Mercúrio Alimentos.

Figure 12: Ranking of 20 meatpackers most exposed to deforestation risks in potential buying zones in Brazilian Amazon, 2016

Source: Imazon, 2017.

Monitoring results from Pará constitute that in 2016, 17 slaughterhouses had purchased more 245,000 heads of cattle from farms with irregularities, i.e. in breach of the terms of the TAC. The findings presented by the MPF of Pará in March 2018 testify that at least 145,000 or 15 percentage of the full originated from properties involved in Amazon deforestation.

Several of the high-hazard companies identified by Imazon in its 2017 study were amongst the offenders. They included JBS, Masterboi, Mercúrio, Minerva, and Frigol (Figure thirteen). JBS was responsible for the largest number of cattle (118,459) purchased from properties involved in irregularities. That totaled 19 pct of its analyzed purchases in the Amazon. Some 84,420 animals, or xiii.viii per centum of total purchases by JBS, came from deforested Amazon areas. Adjacent on the list was MasterBoi, with 31 pct of acquired animals having irregularities. Moreover, 28,231 heads of cattle were linked to deforestation (22 per centum).

Figure 13: Meatpackers found to be linked to illegal deforestation in Pará, 2016

Source: MPF-Pará, 2018.

In Apr 2017, IBAMA accused two of JBS' plants of buying from ranches that were embargoed due to deforestation. JBS, beef processor BRF, and several smaller competitors too came under allegation of bribing federal meat inspectors. JBS' involvement in a broad-ranging political abuse scandal led to a leniency deal, with a record payment of USD 3.2 billion past the controlling shareholder of JBS. Shortly afterward, Greenpeace suspended its participation in the implementation of the G4 delivery in June 2017, due to repeated scandals in the livestock sector and the ongoing social and environmental setbacks in the political arena.

Options for Farm-to-Fork Transparency and Traceability

Diverse instruments for social and environmental monitoring of cattle are currently publicly available in Brazil:

• IBAMA listing of farms embargoed due to environmental legislation breaches.
• Slave labour list of the Ministry of Labour and Employment (MTE).
• Maps of indigenous lands, conservation units, Quilombola territory.
• Remote sensing data to monitor deforestation in the Amazon.

Despite these sources of information, full traceability is not possible without tracing animals back to their origins.

Government, using several types of systems, are required to rail Brazilian cattle:

• The mandatory Animal Transit Guide (GTA) records cattle motion for germ-free control purposes and tracks cattle during transportation. Cattle lots received by meat processors are accompanied by GTAs. However, these GTAs practice not bespeak previous farms from which the lot derives, despite the whole lot, or at to the lowest degree office of it, might have stayed at other farms. This gene and the fact that GTAs are non fully publicly accessible for all states sharply limit Guide'due south usability as a traceability tool.

The GTA is not an mistake-proof system. In regions with many small ranchers, merchants get together the cattle of diverse modest ranchers. This arrangement may include animals from producers that are not eligible to receive a GTA. In a region where a larger number of producers than entities registered by the germ-free inspection advise, middlemen may provide the necessary documentation to cover up for informal producers.

• The mandatory registration in the Environmental Registry CAR from Brazil's environment ministry shows whether animals are raised on legally registered land that adheres to protection rules under the Forest Lawmaking. The data is just publicly attainable in Pará.
• The voluntary Arrangement of Identification and Certification of Bovine and Bubaline Origin ( SISBOV ) for exports to the European Matrimony was introduced in 2002. Concerns over human foot and mouth affliction (FMD) were the original reason for this system. The voluntary arrangement coordinated by the Brazilian Agriculture Ministry guarantees traceability of private animals throughout the supply chain. For live exports and export of fresh beef to the EU and some other countries, cattle must be purchased from farms that are certified in SISBOV. The farms registered in SISBOV throughout Brazil account for less than 0.5 percent of all farms, with more than than l heads of cattle.

According to dissimilar experts, making the GTA fully digital, publicly attainable, and linked to other systems, namely the Auto, would serve as an important pace in tracing legality of cattle. The MPF-Pará criticized in March 2018 that GTA is non linked to Car. The Public Prosecutor chosen for increased transparency to terminate deforestation: "In addition to not-adherence to TACs or non-compliance with agreements, MPF considers that another major barrier to improving agreements and reducing deforestation in the Amazon is the lack of full transparency of the Rural Ecology Registry (CAR) managed by the Brazilian Woods Service and the Fauna Transit Guide (GTA) belonging to the Agronomical Defense Agency of the State of Pará (Adepará)."

Currently, a lack of cooperation by land agencies prevents IBAMA from enforcing the constabulary. In July 2018, IBAMA informed the Federal Public Ministry that information technology was unable to inspect 47 slaughterhouses without TAC because it did not receive the relevant GTAs from the agricultural defense agencies of Roraima, Amapá, Maranhão, Amazonas, Rondônia, Mato Grosso, Acre and Tocantins.

A traceability solution consisting of a combination of Automobile and GTA with monitoring by satellite imagery appears most promising. Despite known shortcomings in GTAs and considering the complication of the problems, such a combined system would be cost-constructive, fast to deploy, and scalable in the curt term. A database integrating CAR and GTA data from Mato Grosso, Pará and Rondônia every bit well as embargos and deforestation data has already been developed. A joint project of the University of Wisonsin, Imazon, and Instituto Centro de Vida has already produced such a product (Gibbs et al. 2018, unpublished).

A voluntary purchase protocol using a combination of GTAs and the Auto register as developed past the Indirect Suppliers Working Grouping (GTFI) was nether validation by stakeholders in 2017. The procedure sought to prove the concept and empathise how different links in the supply chain can contribute to tackling the problem. Led past Amigos da Terra – Amazônia Brasileira and the National Wildlife Federation (NWF), the GTFI is a multi-stakeholder group whose objective it is to align existing policies and discuss tools for monitoring the cattle product chain in Brazil.

In the medium term, the adoption of a mandatory and individual animal traceability system beyond the Brazilian beef sector would be most efficient to enhance both domestic and global trust in the Brazilian industry. It would ultimately allow amend access to export markets. In contrast to methods such as hot iron or tattoos, ear tagging has the highest technical efficiency. Ear tagging also requires less time for correctly reading and transcribing values to an electronic database. All the same, the connected costs appear besides high to allow for a wide implementation now. With increasing awarding numbers, the economic viability indicators are, however, expected to improve considerably. The nationwide introduction of an individual tracking system from nascency for cattle in Uruguay is considered conducive to opening export markets.

Moderate Intensification Reduces Leakage

A sustainable intensification of cattle ranching would form an of import step in decreasing pressure on forests. And so far, cattle in Brazil are still held in low stocking density and with marginal profitability per hectare. Despite improvements, the current productive capacity of pastureland in Brazil has reached but 1-third of its potential. An increase to 52 percent would likely meet projected increases in need for Brazilian beef and other agronomical products for the coming 20 years.

At the same time, pasture deposition is ane of the principal causes of low productivity of cattle production systems, and it is a driving force behind deforestation. According to estimates, 50 percent of cultivated pastures in the Cerrado and more than 60 percent in the Amazon are considered degraded.

Depression-tech and toll-effective practices for moderate intensification and sustainable ranch management tin provide solutions to help better pasture and herd productivity and prevent further degradation. These solutions should primarily be introduced in priority regions close to slaughterhouses and in agronomical borderland regions. All the same, technical assist is required, and upfront costs to farmers may be high, especially for ranches with small pasture areas. Credit lines linked to environmental performance criteria are scarce and not easily accessible due to unclear land tenure status.

Supply Chain Links of Pinnacle v Retailers with Amazon Meatpackers

The delivery of beef from a meatpacker to a retailer tin can typically follow various chains:

• Slaughterhouses may purchase cattle for slaughtering and cutting and and then deliver to retailers. While several retailers have introduced tracking tools for ain-brand products, this solution does not apply for all beef products that are sold in the supermarkets. Fresh beef is also sold unpackaged and thus carries no code of origin.
• Processors and meat retailers may purchase from third-party slaughterhouses. Many brands of packaged and processed beef are available in the online stores of Brazilian retailers. These include private labels and brands linked to the large meatpackers (e.g. JBS with Swift, Friboi, Do Chef; Marfrig with Bassi, Montana). In improver, online shops offer products by specialty producers such equally Frigorífico Silva with Best Beef (Angus, Hereford beefiness), Korin (organic), VPJ Alimentos (Angus) and Wessel (anile meat, specialty hamburgers etc), and other meat producers such as BRF, Cajuru Industria e Commercio de Alimentos, Magazzino and Vilheto Alimentos. Transparency regarding how much these companies source from the Amazon is limited.
• Slaughterhouses may also produce and package beef for brands linked to other meatpackers. For instance, slaughterhouse visitor Masterboi, i of the height 10 meatpackers in the Amazon, states that it maintains a partnership with one of JBS'south processed foods brands, Seara. Various types of Seara-branded hamburgers are sold past Carrefour. The lack of transparency keeps consumers and watchdogs from knowing whether the hamburgers are deforestation-free.

Retailers Carrefour, GPA, and Walmart take developed no deforestation commitments, with varying content, scope and level of implementation. By contrast, Cencosud and Super Muffato are lagging behind the others, with no public policies in relation to beef or deforestation. While these two chains do not operate stores in the Amazon, they may nonetheless exist exposed to Amazon beef through SIF-slaughterhouses.

Some offer transparency portals for customers to place the origin of certain fresh beefiness products, however, due to the indelible lack of traceability to breeding ranches this stops at the straight suppliers. For processed products, no origin information is bachelor to consumers.

CRR identified some supply chain links between the leading retailers and beef producers with operations in Amazon locations (Figure fourteen). The findings are based on a quick analysis of visitor reporting and online advertisements.

Figure fourteen: Supply chain relationships between meatpackers with Amazon locations and pinnacle-retailers

Source: CRR research.

JBS, Minerva, and Marfrig, the leading Brazilian meatpackers, are signatories of the G4 and TAC agreements. All top retailers have links to one or more of these iii companies. Masterboi and Boi Forte have signed neither understanding, but they are SIF registered and thus immune to trade beyond state borders.

Retailers' Deforestation Policies and Performance

Fast-food chain McDonald's already implemented a no-deforestation policy for the Amazon in 1989, in the grade of a commitment to "no sourcing of beef from within the Amazon Biome." Nevertheless, a broader uptake of such beef-related no-deforestation policies started merely in 2009. In parallel with the G4 and TAC agreements with meatpackers, the downstream companies kickoff took action. Amongst others, Carrefour Brasil, Walmart Brasil, and McDonald'due south joined the Working Group on Sustainable Beef, GTPS. The Group was formally constituted in 2007. Its membership is made upwards of actors from all supply chain stages, including producers, processors, retailers, input suppliers, financial institutions, civil society organizations, and research institutions. Information technology is involved in a range of airplane pilot projects that aim to make the production of beefiness in Brazil more sustainable.

Carrefour

Grupo Carrefour Brasil is the largest retailer in Brazil, with a market share of 26.5 percent in 2017. It is operating as a subsidiary of the French Carrefour Group. It operates throughout the country, with a total of 638 stores (run across Figure fifteen). More than 4 percent of sales are generated in Amazon states. It exclusively sells Brazilian beef. In full, Carrefour sells more than 48,000 tons of beefiness annually. More than one-half (24,000 tons) is unprocessed "beef in nature," the balance are other meat products (prepared meals, candy foods). Of the beefiness in nature, 2 pct or 480 tons is sold under its own brand. Ninety-8 percentage are national brands.

Figure 15: Carrefour stores per region (based on sales)

Source: Carrefour, 2018.

On a national level, Carrefour Brasil announced in 2016 that information technology would use georeferencing to track 100 per centum of its beefiness distribution. This activeness is to ensure that its own and national brands are not coming from areas linked to deforestation or other controversial activities. The policy for Brazilian beef has a broader scope than the global zero-deforestation commitment. The Brazilian policy applies to all brands of "beefiness in nature," but not to the beef products that are in prepared meals and in processed foods. Consequently, only slightly more than 50 percentage of Carrefour Brasil'due south beef distribution has practical this policy.

Carrefour states in its 2017 CDP Forests disclosure that its global reporting is limited to its ain brand products. "[T]he deforestation risk linked to supplier/national brand products is evaluated by the brands themselves. Carrefour evaluates the risk for its own brand products […] Our policy scopes all the cattle products we sell under Carrefour brand."

Date in sustainable beef initiatives includes:

• In 2009, Carrefour Brazil became part of the Working Grouping on Sustainable Beef (GTPS). It is also a member of the Indirect Suppliers Working Group (GTFI).
• Since 2012, Carrefour maintains a partnership with the Marfrig Group (SP) and the JD Group (Fazenda São Marcelo) to source fully traceable Rainforest Alliance Certified beefiness. With an annual corporeality of around 120 tons, this initiative represents less than 0.25 pct of Carrefour's full annual procurement of more than than 48,000 tons of Brazilian beef.
• To ensure sustainable sourcing of beef, Carrefour announced in 2016 that it would start in 2017 to monitor 100 pct of beef distributed in Brazil by geo-referencing it. Carrefour stated that initially its monitoring will reach 22 beefiness suppliers of the network throughout Brazil, of which half-dozen in the Amazon.
• In 2017, Carrefour became a signatory of the Cerrado Manifesto, which calls on the private sector to react and commit to finish deforestation of this ecosystem.
• Its traceability system allows customers to identify the ranches that supply the beef they buy from Carrefour's "Garantia de Origem" program. This system can be accessed for private products past using a QR code reader. No comprehensive supplier lists are published.
• In July 2018, Carrefour Brasil announced investment of EUR 1.nine million (USD 2.0 million) in a joint project with the Sustainable Trade Initiative (IDH). The three-year "Sustainable Production of Calves Initiative" is a partnership with the Mato Grosso state regime as part of its Produce, Conserve and Include (PCI) strategy. The project covers 156,000 hectares of land and 450 farms. Information technology includes ranching intensification, restoration of degraded pastureland, technical aid and admission to credit for farmers, and assistance to comply with the Brazilian Forest Code.

Carrefour and its competitor GPA did non reply to a 2017 inquiry by (O)eco that asked for a list of the Amazonian meatpackers amongst their suppliers and the boilerplate book purchased from the region.

Carrefour, along with others, direct or indirectly sources beef from JBS and Marfrig. Via JBS's make Seara, the retailer may have supply concatenation links with Masterboi, a supplier of prepared foods to the brand. Masterboi has not singed a TAC. The MPF-Pará found that Masterboi sourced 22 percent or 28,231 animals in 2016 from ranches involved in deforestation. Other beef suppliers include Wessel, Vilheto Alimentos, and Paineira. It is unknown whether they source from the Amazon.

Casino / Grupo Pão de Açucar (GPA)

GPA is the 2d largest retailer in Brazil with a market share of 25.8 percentage in 2017. Groupe Casino (French republic) is the decision-making shareholder of Grupo Pão de Açucar (GPA), which operates supermarkets in Brazil via its business unit of measurement Multivarejo. Banners include Pão de Açúcar and Extra. GPA operates stores in 22 of 26 Brazilian states, including the Amazon states Amazonas, Maranhão, Mato Grosso, Pará, and Tocantins.

According to 2016 information, GPA's banners procure around 72,000 tons of beef annually. In 2016, GPA published its Responsible Beefiness Sourcing Policy. Regarding beef from the Amazon, the company committed itself and its brands to the following:

• Accomplish full transparency from the last supplying farm of fresh and frozen beefiness.
• Inside a defined timeframe and implementation plan, procure only responsibly sourced beef, understood every bit meat:
• that has not been sourced directly from deforested lands, in any of its forms;
• that has not been sourced from farms using slavery; and
• that has not been sourced from farms involved in state buying conflicts.
• Develop and provide tools for the supplying slaughterhouses, warehouses and processors.
• If the transparency/traceability solutions of slaughterhouses to track indirect suppliers seem viable and achieve sufficient market place leverage, GPA will consider internalizing them.
• Communicate implementation results to all company stakeholders.

The company had planned to review the policiy in January 2018. However, no revised version is available. GPA has not specified the mentioned "divers timeframe" in anyway. In 2017, the corporate global headquarter of Casino Group signed the manifesto to protect Brazil's Cerrado region as 1 of the world's richest ecosystems only highly threatened from ongoing conversion for agronomical use.

GPA published preliminary results of its supply chain policy in 2017. Information technology lists JBS, Marfrig, and Minerva as suppliers, as well as 43 unnamed pocket-size and medium suppliers. Of these 43 suppliers, 27 (xiv direct slaughterhouses, five processors with direct cattle purchases, i distributor and seven processors that purchase carcasses or meat from at that point 23 indirect slaughterhouses) adhered to the retailer's policy and the Traceability and Quality Management organization, Safe Trace. The three leading meatpackers and the adhering small and medium suppliers represented 98.12 percentage of beef bought in the beginning one-half of 2017. The remaining 16 minor suppliers needed to adhere to the policy during the 2d half of 2017.

The general inspect results found that at least vii,451 directly farms supplied cattle for GPA's suppliers. The inspect identified that some one,825 farms were located in the Amazonian forest. Ninety-seven of these farms were identified in areas embargoed past IBAMA (1.2 percent) and were suspended. Four producers were suspended due to their inclusion on the Transparency list published by the Ministry of Labor and Employment. Indirect farms further upstream are not considered in GPA's beefiness policy yet.

According to a visitor source quoted by (O)eco, about ten refrigerators in the Legal Amazon provide meat for the more than 2,000 Brazilian stores. Reportedly, just the three largest slaughterhouses in the state amongst its suppliers — JBS, Marfrig and Minerva — take signed the TAC. Many of the smaller suppliers do not appear to accept proper documentation of their straight suppliers. Grupo GPA did not reply to the request by (O)eco in September 2017 for concrete data on their suppliers in the Amazon, referring to the internal policy of not publishing supplier lists.

Other suppliers of beef and processed beef products include Frigorífico Silva, Korin, and Wessel. Its traceability system for beefiness products was down for maintenance at the time of writing.

Walmart Brasil

Walmart Brasil is the tertiary largest retailer in Brazil, holding a marketplace share of 15.0 percent in 2017. Information technology operates equally a subsidiary of Walmart, the world's largest grocery retailer publicly listed in the US. Walmart has stores in 18 Brazilian states, including the Amazon states Mato Grosso and Maranhão. In August 2018, Walmart sold an fourscore per centum stake in its Brazilian operations to individual disinterestedness firm Advent International (U.S.). Advent International does non take a aught deforestation policy.

According to 2010 figures, Walmart Brasil sources 36,000 tons of beefiness annually. Information technology made a policy commitment to boxing deforestation in the Amazon in its soy, timber, and livestock supply chains. Walmart Brasil created a Responsible Beefiness Sourcing Buying Policy in 2011.

Date past Walmart Brasil in sustainable beef initiatives include:

• In the land of Mato Grosso, Walmart cooperates in a sustainable beefiness project with The Nature Salvation, the Moore Foundation and Marfrig.
• In 2017, Walmart committed support to the Cerrado Manifesto. It is too a member of the Working Grouping on Sustainable Beef (GTPS).

According to the retailer, 40 percent of the meat sold in its 485 stores comes from the Amazon. In 2017, (O)eco asked Carrefour, Casino, and Walmart for a list of the Amazon meatpackers that supply them with meat and the average monthly volume purchased from the region. Only Walmart responded. It said that in the Amazon, the visitor sources beef from JBS and Marfrig, every bit well equally Boi Forte (LKJ Frigorífico in Tocantins, chapters of 600 heads per 24-hour interval) and Masterboi (with one slaughter-house each in Pará and Tocantins, with a full daily chapters of ane,700 heads). Boi Forte and Masterboi have not signed the TAC.

In the 2017 group level Global Responsibleness Report, Walmart states that it is monitoring 75,000 registered farms operating in the Amazon. This action is part of its goal to monitor 100 percent of the fresh beef from the Amazon sold in Brazilian stores to exclude deforestation.

These farms supply livestock to about 30 slaughterhouses owned by JBS, Marfrig, Boi Forte, and Masterboi. The retailer has created a geospatial monitoring system to track suppliers, volumes and farm locations and overlays. This information, which includes maps, show where deforestation is occurring. In the light of the 2020 zippo net deforestation goal, this programme is looking to expand to other sensitive biomes in Brazil. However, the system thus far just covers the finishing ranch and not indirect suppliers. While this problem is recognized by Walmart, no timeline is provided by which monitoring of the before stages is anticipated. The policy does not mention processed meat.

Walmart claims that since 2016 it has closed deals with just slaughterhouses that follow the TAC requirements. Every slaughter-house that sells meat to Walmart is required to have a vendor monitoring system and go through an annual audit. Boi Forte, and Masterboi refused to reply to (O)eco's request to provide details on their criteria. According to the mapping made by Imazon, these two slaughterhouses lone purchase livestock from a region that includes more than 420,000 ha of embargoed areas and recent deforestation. Masterboi was institute by the MPF-Pará to have sourced more than 28,000 heads, or 22 percent of its 2016 purchases, from ranches involved in deforestation.

Cencosud

Cencosud is the quaternary retailer in Brazil, belongings 4.6 percent of the market. Cencosud is a Chilean company, publicly listed in Chile and on the NYSE. Cencosud operates in Bahia, Sergipe, Alagoas, Ceara (Gbarbosa), Minas Gerais, Goias (Bretas), and Rio de Janeiro (Prezunic). It has no store presence in Amazon states.

Cencosud has launched certification goals for fruit and vegetables, as well as a generic goal to "[…] seek to strengthen the traceability of our value concatenation and market sustainable products." In that location are, however, no goals related to beef products or deforestation in its beef supply chain.

Cencosud'due south environmental policy is very full general when referring to the Global Reporting Initiative (GRI) and the principles of the UN Global Compact. It does not comprise principles on deforestation. The websites of all four Brazilian brands of Cencosud (G. Barbosa, Bretas, Perini, and Prezunic) evidence no sustainability policies or reports or whatever commitments on deforestation. JBS' Friboi brand is among its beefiness suppliers.

Grupo Muffato

In 2017, Grupo Muffato held national market share of 3.ii percent, making it the 5th largest player in the country. The visitor is the only one amid the top v that is locally endemic. It operates in Paraná and the interior of São Paulo, but it has no shambles presence in the Amazon.

It is unclear how much and from which suppliers the retailer is procuring its beefiness. Muffato has no product-specific or deforestation-related sustainability policies, and it is too not a member of the Working Group on Sustainable Beef (GTPS).

The visitor's beef suppliers include, among others, JBS and Marfrig, and specialty products suppliers Korin, Wessel, and VPJ Alimentos.

Meatpackers' Deforestation Policies and Functioning

While many more are likely, at least five meatpackers with operations in the Amazon accept been identified as supplying the superlative-five retailers. Profiles of JBS, Marfrig, Minerva, Boi Forte, and Masterboi are included in the Appendix. Among these five, JBS, Marfrig, and Minerva have signed the G4 and TAC agreements.

All these meatpackers face high exposure to deforestation risk. According to documented reports, they have purchased cattle from not-compliant suppliers in recent years. For suppliers of candy beef products or unlabeled fresh beef that is linked to these retailers, information technology is not clear whether they source from slaughterhouses in the Amazon.

JBS and Marfrig enable retail consumers of some of its beef brands to identify the farm where the cattle were concluding located before being slaughtered. This identification process is available via the companies' websites. The firms use SIF (Federal Inspection Service) codes and production date on the product packaging. Yet, none of the meatpackers can effectively control its indirect suppliers.

Ativo Alimento has provided a best practice in transparency amongst larger meatpackers. Its Mafrinorte slaughter-house in Pará publishes lists of its direct cattle suppliers on a daily ground, creating more transparency than other meatpackers. However, the MPF-Pará documented that in 2016, Ativo Alimento purchased xix per centum of its cattle from areas that appoint in irregularities and deforestation.

Fiscal Risks of Exposure to Deforestation in Beef Supply Concatenation

Specific ranches, slaughterhouses/meatpackers and retailers are, or could exist, involved in (illegal) deforestation in the Brazilian beefiness chain. They can disguise their actions due to the lack of transparency in the supply chain. This situation creates various financial risks for these participants also every bit financial opportunities.

Fiscal risks can derive from:

• Reputation adventure.
• Acquirement-at-risk leading to lower utilization and lower net profits.
• Higher costs for systems related to monitoring and traceability.
• Higher financing costs (also due to loss of financial relations).

These risks might lead to investment losses for bondholders, banks, and shareholders.

Specific participants in every office of the concatenation are facing reputation chance. This hazard originates in consumer markets where an increasing sensitivity to deforestation-related issues occur. Brazilian retailers, which serve consumers directly, may face relatively high reputation risk. This risk could migrate to foreign owners of the retailers, particularly in Europe (Carrefour and Casino). Large meatpackers, such as JBS, also face comparably high reputation take chances.

Meatpackers and ranchers may face up a relatively high revenue-at-risk from exposure to deforestation their supply chains. Brazilian retailers could make up one's mind to switch their sourcing to another meatpacker. Such a change would likely essentially impact the financial status of meatpackers with large presence in the Brazilian markets. For their office, meatpackers can stop sourcing from non-compliant ranches. This situation may lead to bankruptcies for non-compliant farmers.

All stakeholders in the Brazilian beef concatenation, including the government, will have to cover college costs for systems related to monitoring and traceability. These systems require multi-million US Dollar investments and operating costs, to be divided between all participants. As large-calibration data gathering, and tracking technologies see declining costs, implementation may become less expensive in coming years.

Financing costs for not-compliant participants, on every part of the chain, may rise. Banks with NDPE policies may be less willing to offer loans, specific bondholders could decide to divest, and shareholders may accept less incentive to invest. The increment in financing costs for specific participants leads to a competitive disadvantage.

Opportunities to Make Cattle Supply Chain Deforestation-Complimentary

Compliant participants in the beef concatenation could see significant positive fiscal opportunities. In a 2017 study in Harvard Business Review, the authors analyzed financial risks and opportunities in the Brazilian beef chain. They concluded: "[…] sustainable and deforestation-gratuitous practices created significant financial benefits for all players in the industry'south value chain […] embedded sustainability drives financial performance through mediating factors such every bit innovation, operational efficiency, risk reduction, employee recruitment, engagement and retention, customer and supplier loyalty, competitive reward, reduced cost of capital, and improved marketing and sales."

Ranchers could proceeds 12 to 23 percent in sales from sustainable intensification methods (less country per cow) and innovative operations. That would atomic number 82 to better quality of cows and meat, subsequently increasing prices from slaughterhouses.

Ranchers could proceeds benefits equal to ix to 30 percent of revenues from sustainable intensification methods (less land per cow) and innovative operations. This mainly stems from lower costs (for instance a decline in fertilizer costs). Also, information technology would atomic number 82 to amend quality of cows and meat, subsequently increasing prices from slaughterhouses. The increase in profitability of ranchers can be up to six.8X.

The study says that slaughterhouses JBS and Marfrig saw benefits equal to 0.01-0.13 percent of revenues. These benefits are smaller in comparison to total business concern (versus slaughterhouses) and are more difficult to gauge due to the lack of data. The benefit of 0.thirteen pct of revenues translates into 5 percent of operating profit (or EBIT). Finally, Brazilian retailers could run into similar gains as the slaughterhouses from selling compliant beef.

Appendix: Deforestation Policies and Operation of Amazon Meatpackers Linked Tiptop Five Retailers

JBS

JBS is the largest beef producer in the world and in Brazil. It is likewise the largest slaughterhouse operator in the Brazilian Amazon. Equally of June 2017, it controlled 25 percentage of the slaughtering capacity in Brazil, including 48 per centum in Mato Grosso. It operates 32 slaughterhouses in Amazon states (of which 21 were active in 2016), creating high exposure to risks associated with deforestation.

JBS is part of the G4 Agreement that was signed between meatpackers and Greenpeace in 2009. Its active plants in Acre, Maranhão, Mato Grosso, Pará, Rondônia, and Tocantins accept all signed a TAC. As required by the agreements, JBS has implemented a monitoring system. The 2017 audit study concluded that as of December 31, 2016, the company had over lxx,000 farms on its register of suppliers, of which 5,749 were excluded for cattle purchases due to breaches of the visitor's socio-environmental criteria. The inspect found that out of a sample of 9,198 purchases, JBS made three (0.03 percentage) irregular purchases due to breaches of IBAMA-embargoed areas (2 cases) and deforestation (i case). Crucially, though, the auditors exercise not have access to the GTA data from previous sales.

JBS can track 100 percent of its straight suppliers via the compulsory GTAs. Moreover, its packaged raw products branded Swift, Friboi, Swift Maturatta, and Swift Organic are traceable with a QR Code on the packaging. With the Code, consumers tin identify the name and the locality of the straight supplying farms via an online tool. Other JBS brands such equally Seara are non traceable for consumers via the QR codes and online tool. The company has not implemented tracking of indirect suppliers.

JBS supports the Novo Campo Program in Mato Grosso, a pilot programme that offers cattle ranchers guidelines on socio-environmental and productive issues. The program also aims to develop a organisation for tracking indirect suppliers.

Imazon identified 4.vi million ha with some adventure in the potential buying zones of JBS' Amazon plants. This land includes i.seven meg ha of embargoed areas, 1.6 million ha of area deforested from 2010-2015, and 1.2 million ha of forest at gamble of deforestation from 2016 to 2018.

The company has been identified twice in recent years as procuring cattle from farms with irregularities:

• The MPF-Pará in its TAC monitoring report published in March 2018 identified JBS as the meatpacker purchasing the largest number of cattle from farms with irregularities in 2016, i.east. in breach of the terms of the TAC.
• In 2017, operation "Carne Fria" carried out by IBAMA found JBS was the company that procured the largest number of cattle raised in embargoed and illegally deforested areas. Two of JBS' slaughterhouses in Pará (Santana do Araguaia and Redenção) were accused past IBAMA of acquiring 49,438 cattle or 84 pct of the total number identified during the functioning. The value of these purchases was BRL 110 million, co-ordinate to estimates.

JBS has been identified as a beef supplier to all five elevation retailers: Carrefour, GPA, Walmart, Cencosud, and Super Muffato.

Minerva

Minerva is the 2nd largest meat producer in Brazil, with a daily slaughtering capacity of 11,880 heads. In 2016, Minerva had a full of 4,684 suppliers, of which 2,493 were new. It has four slaughterhouses in the Amazon, all of which are TAC registered. Information technology is also a G4 signatory.

The independent inspect of its conformity with minimum requirements nether the G4 agreement as published in 2017 did not find cases of non-compliance. However, the auditor noted that Minerva does not have whatsoever monitorable and verifiable traceability organization for its indirect suppliers to monitor all purchases of cattle in the Amazon biome, including the supply chain links preceding the fattening ranches that supply to the abattoir.

The monitoring listing of direct suppliers in Pará is attainable via an online calendar, through the provision of a SIF number and product engagement from the package. For the other Amazon states, no list is published.

Imazon identified 931,000 ha with some blazon of chance in the potential buying zones of Minerva'south Amazon plants. This includes 202,000 ha of embargoed areas, 483,000 ha of expanse deforested from 2010-2015, and 246,000 ha of woods at take chances of deforestation from 2016 to 2018.

The 2016 sampling of the MPF-Pará found that Minerva purchased 186 animals, or 0.1 percent in the Amazon that were linked to irregularities.

Minerva has been identified as a beefiness supplier of GPA. Because its size equally a meatpacker, information technology is probable that the company also supplies other retailers.

Marfrig

Marfrig Global Foods is the third largest meatpacker in Brazil with a daily slaughtering capacity of around x,000 heads. The visitor has iv active slaughterhouses in Amazon states (Mato Grosso, Pará, Rondônia), all TAC registered. It is as well amidst the signatories of the G4 cattle understanding.

The inspect report under the G4 understanding that was published in 2017 has not identified breaches of the minimum criteria as defined by Greenpeace. Marfrig is making efforts to control its indirect suppliers and has a proprietary system for tracking its production chain. The process includes verifying, analyzing, recording, and storing data that enables the company to monitor raw materials from their origin to the point of sale. Still, this procedure does non yet provide systematic monitoring and verification — the slaughterhouses have not adopted auditable procedures for indirect suppliers.

In 2012, a Marfrig unit of measurement in Mato Grosso became the showtime meatpacker to market Rainforest Alliance Certified beef. Since then, three more units received approval. The beefiness is sourced from the farms of São Marcelo in Mato Grosso, the only agronomical company engaged in cattle production that has received this certification.

Since 2013, Marfrig has partnered with The Nature Conservancy (TNC) and with retailer Walmart in a pilot projection for sustainable livestock farming in São Félix do Xingu (southeastern Pará). This project includes the provision of technical assist to ranchers for sustainable intensification, the development of a traceability model, and a model of supportive rural credit operations. Meat from these backdrop was first sold in 2016 in two Brazilian Walmart stores, supplying 70 tons per calendar month. Phase II, running from 2016 until 2018, includes expansion to depression-productivity pastures in the Amazon and Cerrado Biomes, along with the introduction of an improved tracking organization from convenance stage to the final product. That would cover the complete supply chain and involve the addition of 300 farms with 170,000 ha that undergo intensification.

Imazon identified 1.4 million ha with some type of risk in the potential buying zones of Minerva's Amazon plants. This includes 544,000 ha of embargoed areas, 441,000 ha of surface area deforested from 2010-2015, and 382,000 ha of forest at risk of deforestation from 2016 to 2018.

Marfrig has been identified as a beef supplier of 4 of the leading Brazilian retailers, Carrefour, GPA, Walmart, and Super Muffato.

Masterboi

Masterboi has two facilities in Amazon States, in Pará and Tocantins, with total daily capacity of i,700 heads. Both are controlled under SIF and thus immune to trade across state borders. Neither of them has signed a TAC.

Based on the findings of Imazon, as of 2015, Masterboi was exposed to 198,000 ha of embargoed areas in the Amazon, 284,000 ha of surface area was deforested between 2010 and 2015, and 146,000 ha was at hazard of deforestation betwixt 2016 and 2018.

MPF-Pará discovered that Masterboi sourced more than 28,000 heads, or 22 percent of its 2016 purchases, from ranches involved in deforestation.

Walmart mentions Masterboi equally one of its suppliers. Masterboi's beef products might also end upwardly on Carrefour'south shelves. Masterboi states that information technology maintains a partnership with one of JBS's main beef brands, Seara, and Carrefour offers Seara beef products. The lack of transparency regarding supply chain relationships does not let consumers to verify whether the products are linked to a college-chance slaughterhouse.

Boi Forte

Boi Forte operates the SIF-registered butchery LKJ Frigorífico in Tocantins, with a capacity of 600 heads per day. The meatpacker has not signed a TAC.

In 2017, two slaughterhouses in Tocantins, by LKJ and Minerva, were raided, as office of "Functioning Vegas," for bribing the prosecutor of the Ministry of Agriculture in Tocantins with monthly payments of BRL 50,000 (USD sixteen,000). In plow, the prosecutor released tuberculosis-contaminated beef.

Based on the findings of Imazon, Boi Forte's potential buying zones contained 572,000 ha with some type of risk. Its exposure includes 143,000 ha of embargoed areas in the Amazon, 284,000 ha of area deforested between 2010 and 2015, and 145,000 ha at risk of deforestation betwixt 2016 and 2018.

Walmart includes Boi Forte every bit i of its suppliers.

Note: The quote from theHarvard Business Reviewhas been updated from an earlier version.

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Source: https://chainreactionresearch.com/report/cattle-driven-deforestation-a-major-risk-to-brazilian-retailers/

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