Escolhas debates the meat production chain

The Institute’s next study workshop brought together industry associations, companies, banks, NGOs, research institutes and academia

Beef chain subsidies and the environmental impact that the sector generates on both carbon emissions and water consumption are the main focus of an ongoing study to be launched by Instituto Escolhas in early 2020. Cattle ranching is a highly widespread activity throughout the country. In addition to environmental effects, the segment also generates important economic impacts (positive and negative) for the country.

Most studies on the environmental impacts of domestic livestock tend to focus on specific parts of the production chain and, geographically, they often focus only on certain Brazilian regions, such as the Amazon or Cerrado. The economic analyzes of the beef industry, despite outlining the main indicators of the area, such as participation in GDP and jobs generated, do not identify the volume of government stimulus received by the sector. 

Aiming at filling-in in the information gaps on the amount of subsidies and environmental impacts of the segment, Instituto Escolhas decided to study the topic in depth. The work will be divided in two parts: One will discuss how much carbon is released into the atmosphere at all stages of the meat chain and also how much water is consumed during production. The entire breeding and fattening cycle, processing in refrigerators and processing facilities, as well as logistics operations until the product reaches the end consumer will all come into the calculations. The five regions of the country will be considered in the study, which will be analyzed, for methodological reasons, the period from 2008 to 2017. Data for 2018 and 2019 is not yet available. 

In the case of carbon footprint, the objective is to measure the volume of chain emissions, both nationally and in the main regions of Brazil, in kg of carbon dioxide equivalent per kg of meat. Regarding water consumption, the water performance of the Brazilian chain will be measured in liters of water per kg of meat. 

Regarding the economic impacts of the activity, the study will draw estimates of total revenues, the amount of tax waivers and the amount of subsidies across the federal and state meat chain. In the end, the paper must present the amount of subsidies, exemptions and other tax benefits per kg of meat within the Brazilian market. It is expected to estimate the participation of the Brazilian taxpayer in the composition of the price of meat. According to Sérgio Leitão, executive director of Escolhas, the motivation of the study is to produce qualified information on the investment of public resources in the beef chain, ensuring transparency to society and the possibility of monitoring and evaluating the application of these resources.

For the information to be really of quality, and obtained through dialog with the various sectors, Escolhas held on 22/10, in São Paulo, a workshop to discuss preliminary results presented by the authors of the work. 

The meeting’s list of participants reveals a diversity of sectors and organizations. The University of São Paulo, GVces/FGV, Insper (Center for Global Agribusiness), Embrapa and IPEA had representatives at the event, who gave voice to the academy and research institutes. The private sector had representatives from both industry associations, such as Acrimat (Association of Breeders of Mato Grosso), Abiec (Brazilian Association of Exporters of Processed Meat Industries), Abras (Brazilian Association of Supermarkets) and GTPS (Group of Sustainable Livestock), as well as companies such as JBS and Marfrig. From the financial sector, Banco do Brasil was present. Members of various NGOs such as Greenpeace, WWF, IPAM and Imaflora also participated in the debate.

According to economist Petterson Vale, researcher responsible for the analysis of sector subsidies, the subject will be approached in an essentially technical manner. To build the research, Vale has used established methodologies, used by both the government and the main economic studies of the sector. The movement of exports and the values related to Funrural and taxes such as PIS / Cofins and ITR (Rural Territorial Tax) will all be analyzed during the work.

The second part of the study, developed by the team of Pangea Capital, a company that specializes in measuring and valuing environmental processes, also involves a complex mission. The challenge of analyzing the carbon and water footprints of the beef chain is huge. Although many of the national producers are focused on the implementation of sustainable practices in the field, the sector still generates negative impacts on the environment. These are two sensitive issues, deforestation and water consumption, but they need to be addressed, according to Eduardo Assad, a researcher at Embrapa and one of the workshop participants.

Demonstrating the focus of livestock water and carbon footprint investigations, Roberto Strumpf, one of the Pangea team leaders, stated that “in a climate change context, where water availability tends to change greatly in certain regions of the As in the Northeast, the discussion of water consumption in the meat production chain is also of fundamental importance ”.