With record exports, international markets receive subsidized beef from Brazil

Instituto Escolhas - 30/01/2020 - Seminario do Pasto ao Prato: Subsidios e Pegada Ambiental da Carne Bovina. Auditorio da Folha de Sao Paulo.rPalestrantes: Petterson Molina Vale, economista e pesquisador; Katia Abreu, senadora; Sergio Leitao, diretor do Instituto Escolhas, Bernard Appy, economista; Roberto Strumpf, biologo.rFoto: Leonardo Rodrigues

Study by Escolhas shows that the Brazilian bovine 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 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 carcass equivalent (TEC) – coming from domestic production which received more than 123 billion reais in subsidies (US $ 30.8 billion / Euro 27.4 billion). That is the value  of the amount of subsidy granted for beef, in the form of tax exemptions, tax amnesties and rural credits by the 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 the economy and the environment to enable sustainable development.

The results with high carbon footprint numbers in the Legal Amazon, of 145 C02  and and Matopiba, of 183 C02  and 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. 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 numbers that do not appear on the day-to-day of agribusiness. The presence of subsidies in the kilo of beef that reached Brazilian consumer tables between 2008 and 2017, totaled R$ 12,3 billion reais ($3.1 billion/Euro 2,7 billion) per annum, which represents 79% of tax collection in the annual chain in that period, of R$ 15,1 billion ($3.8 billion/Euro 3,4 billion). Being that in 2015 and 2016, the percentage of subsidies per annum exceeded 100% of collection, meaning, in total more subsidies were granted than taxes collected in the beef chain.

At present, 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 causes some reflections.  As, for example, if the amount of public money allocated to the sector is applied efficiently, it stimulates the increase in the sector’s productivity and  granted subsidies influence the increase of environmental impacts such as deforestation,  or in what  manner can assist in mitigating these effects.

The executive director of Instituto Escolhas, Sergio Leitao, highlights the need to discuss the sector’s sustainability and joint analysis of economic and environmental impacts, it is necessary to assess the support and contributions of resources without restriction. According to Leitão, based on another study by Escolhas, as there is stock of land that can be used to increase production, subsidies could be serving as a stimulus for deforestation. And thus, deforestation could 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 go through good practices and commitments for 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, ie 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 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

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

The results of carbon footprint in the Legal Amazon, of 145 C02e reflect the impact of deforestation and incorporates 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 kilograms 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 beef 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.