With record exports, international markets receive subsidized beef from Brazil

Study by Escolhas shows that the Brazilian beef chain received over $30.8 billion in public cash in ten years and the impact of deforestation of the Amazon, which results in a high-carbon footprint in each kilo of beef produced in the region

The world’s major consumer markets of Brazilian beef, China, Hong Kong, the European Union bought part of the total volume of exports – of 2.21 million tons of carcass equivalent (TEC) – coming from domestic production which received more than 123 billion reais in subsidies ($ 30.8 billion / Euro 27.4 billion). That is the value of the amount of subsidy granted for beef chain, in the form of tax exemptions, tax amnesties and rural credits by State and Federal Governments.  The results are set out in the study “From pasture to plate: subsidies and environmental footprint of beef”, designed by Instituto Escolhas, which carries out studies on economy and environment to enable sustainable development.

The results bring a high carbon footprint in the Legal Amazon (1), of 145 C02e and Matopiba, of 183 C02e that reflect the impact of native vegetation to pasture conversion from 2008 to 2017 in these regions beyond that the emissions from livestock. These are some of the results of environmental impacts presented in the study, released this Thursday (30/01), in São Paulo.

With a herd of over 183 million cattle heads, the beef chain represented in 2017, 2.9% of the Gross Domestic Product (GDP) of Brazil and 13.9% of the agribusiness GDP. The numbers of the beef chain in Brazil also impress by the figures that do not appear on the day-to-day of agribusiness. The subsidies in the kilo of beef that reached Brazilian consumer tables between 2008 and 2017, totaled R$12,3 billion reais ($3.1 billion/Euro 2,7 billion) per annum, which represents 79% of tax collected annually in that period by the beef chain, a total of R$15,1 billion ($3.8 billion/Euro 3,4 billion). Specially in 2015 and 2016, the percentage of subsidies per annum exceeded 100% of the total amount of taxes collected, meaning, in more subsidies were granted than taxes collected in the beef chain.

By presenting, in an unprecedented manner, the economic and environmental impacts across the trajectory of the product in Brazil, from birth of the calf to the consumer’s table, the study allows a reading of the results, which raises some issues. As, for example, if the amount of public money allocated to the sector is applied efficiently, if it stimulates the increase in the sector’s productivity and if the subsidies influence the increase of environmental impacts such as deforestation, or in what manner can they help mitigate these effects. 

The executive director of Instituto Escolhas, Sergio Leitão, highlights the need to discuss the sector’s sustainability with an analysis of both economic and environmental impacts, it is necessary to assess the support and contributions of resources without restriction. According to Leitão, based on another Escolhas study, considering that there is stock of land that can be used to increase production, subsidies might be serving as a stimulus for deforestation. And thus, deforestation might be being financed with public funds.

In his opinion, “in light of so many resources for livestock, the Government should establish conditions for access to public resources that enforce good practices and commitments for a more sustainable production.” In Brazil, complements Leitão, “there are good practices on cattle ranching with a sustainable approach, through the recovery of degraded pastures and implementation of integrated production systems”.

Economic impacts – Percentage of subsidies exceeded 100% of collection for two years

The percentage of subsidies per year exceeded 100% of collection in 2015 and 2016, i.e. in total there were more subsidies granted than taxes levied in the beef chain totaling R$15.1 billion  ($3.8 billion / Euro 3.4 billion), annual average in the decade analyzed. Tax exemptions from state and federal governments total 7,9 billion (US$ 2 billion / Euro 1.7 billion) per annum in the 2008 to 2017 period and the contribution by the Federal Government, through credit subsidies, price subsidies, and amnesties granted to the chain in the referred period, totaled the average amount of R$4,4 billion (US$ 1.1 billion / Euro 950 million).

Environmental impacts – environmental footprint in the Amazon and Matopiba with high figures show the impact of deforestation 

The results of the carbon footprint in the Legal Amazon, of 145 kg C02e, reflect the impact of deforestation and incorporate emissions from livestock and emissions from deforested areas converted to pasture in these regions from 2008 to 2017. In Matopiba, the footprint of 183 kg C02e reveals the impact of emissions on the occupancy of the Cerrado biome areas, with conversion of native vegetation into grazing areas. The footprint on the rest of the country, in which there are no deforestation rates in large proportions, is 23 kg C02e. In Brazil, the average carbon footprint of 78 kg of CO2e in each kilogram of beef covers all regions of the country. The numbers represent the emissions and removals in pastures, in addition to estimation of emissions throughout the supply chain up to the consumer, the meat processing emissions, different types of grass and managements: extensive grazing (degraded, stable and well-managed) ; integrated systems (integrated crop-livestock and crop-livestock-forest integration); and confinement.

Each kilogram of beef still contains 64 liters of water which represents the water footprint, defined as the amount of fresh water used directly and indirectly by a consumer or product. In the calculation, the most representative production systems associating with data capacity and water availability in the various production areas were considered.

 

(1)  Legal Amazon is the region comprising the states of Roraima, Amapá, Pará, Amazonas, Acre, Rondônia and Mato Grosso. Matopiba is the region comprising the states of Maranhão, Tocantins, Piauí and Bahia

São Paulo, January 30, 2020.

 

Instituto Escolhas – 

Telephone: (11) 4130.9706 

escolhas.org