The Cerrado is the second-largest biome in Latin America and the most biodiverse savanna in the world. Yet it has lost half its native vegetation to agriculture – and the pace of conversion is accelerating.
Urgent action is needed to balance production with protection, in a way that delivers gains for climate, nature, and people, a new report commissioned by the World Economic Forum finds.
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In this episode:
- Felipe Faria is the director for Brazil at Systemiq, a climate consultancy.
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Transcript of this episode (with Cockatoo)
Gustavo Ribeiro: The Cerrado is the second largest biome in Latin America and the most diverse savanna in the world. Yet, it has lost half of its native vegetation to agriculture and the pace of conversion is accelerating. Urgent action is needed to balance production with protection in a way that delivers gains for the climate, nature and people, a new report commissioned by the World Economic Forum finds.
My name is Gustavo Ribeiro, Editor-in-Chief of the Brazilian Report. This is Explaining Brazil.
For most of 2023, the Brazilian government boasted stellar deforestation reversal numbers for the Amazon. The rate of destruction of the rainforest was cut in half last year as the Luiz Inácio Lula da Silva administration worked to restore the country’s ability to enforce environmental laws. But the results for other biomes were much less glowing and that was especially true for the Cerrado Savannah which became the country’s deforestation hotspot. In 2023, deforestation in the biome increased by 43%.
In January of this year, however, the deforestation figures for the Cerrado were much more encouraging than in previous months, dropping 48% from December according to data released Thursday by the Amazon Environmental Research Institute and Environmental NGO.
But optimism should be taken with a grain of salt. The figure was the lowest in the last 11 months, granted, but still 10% higher than in January 2023. A new report commissioned by the World Economic Forum entitled the Cerrado, Production and Protection, urges action to safeguard the natural capital of this critical biome while contributing to support economic development. Felipe Faria is the Director for Brazil at Systemic and Environmental Consultancy and led the development of the Cerrado report and he joins us this week.
Felipe, thanks for joining us. Before we talk about what needs to be done for the Cerrado, I’d like to ask you about what has already been done to the biome. I mean, can you explain to listeners who may not be fully aware of the biome, what the Cerrado is and what its current state is?
Felipe Faria: Yes, Gustavo. So, the Cerrado is the largest tropical savanna and most biodiverse savanna in the world. It comprehends an area of 200 million hectares in Brazil, in the center of Brazil, covering states like Mato Grosso, Mato Grosso do Sul, Goiás, Tocantins, Maranhão, and Bahia.
Gustavo Ribeiro: And we talk a lot about the Amazon being a carbon sink, but the Cerrado is another important one, right?
Felipe Faria: Sure thing. So, like I said, we say that the Cerrado is the most biodiverse savanna in the world because there are different types of forests, shrubs and pasture lands. The cerrado will have a great variety of different types of phytonormies, like we said in the scientific language, in terms of how to classify these different species that will be together in the same place. So, the cerrado will cover exactly grasslands, but also forests and the transition between the Amazon and the Cerrado. Nowadays, we lost almost 50% of the native vegetation from the Cerrado because the Cerrado become this agricultural hotspot where we produce most parts of the commodities in Brazil and also export these commodities to the world.
Gustavo Ribeiro: And, Felipe, how critical is the Cerrado to Brazil’s economy and to global food security?
Felipe Faria: The Cerrado, for example, is supplying most of the global soy production, 23% of the sugarcane global production, 5% of the corn and 6% of the cattle herd that will be used for beef production. So, basically the Cerrado is a global hotspots in terms of the production of commodities, which is in the same time creating a pressure for conversion and expansion of the agriculture.
Gustavo Ribeiro: And in terms of long-term risks to the biome, with the Amazon we always mentioned the tipping point after which the rainforest would transition into a savanna, so what would the long-term outlook for the biome be if current levels of destruction are to continue? I mean, is there any such tipping point studies for the Cerrado? And if so, what would the savanna be transformed into?
Felipe Faria: Unfortunately, the amount of research that we have in the Cerrado compared to the Amazon is very low, right? So there is a need of much more scientific research to really understand the tipping point, the relationship between conversion and production and the services, the ecosystem services that the Cerrado is supplying to Brazil for the industry, for the population, such as energy, water, and food. But when we look to the numbers in terms, what is the impact that climate change conversion could bring to Cerrado, the water surface in many basins are reducing. But also, what we observe from some scientific research is exactly that the conditions, the reasonable and appropriate conditions for agriculture could be changing, such that we are putting in risk also not only the habitat, the biome per se, but also our capacity to produce at ideal climatic conditions.
Gustavo Ribeiro: But in what sense? I mean, what are the main risks for agriculture?
Felipe Faria: I believe that it’s exactly the change of the number, for example, of raining days, the season of the raining season, and last season, in the last semester of 2023, we had an example of how climatic conditions will affect agriculture production. We had the rain in the Mato Grosso state, was a reduction of 1.9% of the soy production compared to the year before.
Gustavo Ribeiro: And we covered the effects of climate change on farmers’ economic situation a few episodes ago. The episode is called, Is Brazil and Agro in Crisis? And you can look for it on our website or on our podcast feed. Now, Felipe, conservation rules for farmers are far more permissive in the Cerrado than in the Amazon. I mean, in the rainforest, landowners must conserve 80% of their property, but that requirement drops to 25% to 35% in the savannah. What’s the explanation for this disparity and is there any political will to change these regulations?
Felipe Faria: Yes. Basically, this explanation from the government is associated with the Brazilian Forest Code. So you are right that in the Amazon, every property needs to conserve more than around forest within each property, but this situation is very different compared to the Cerrado where this percentage is between 20 and 35%. So what we are observing in the Cerrado is that most of the deforestation is still illegal, so we need for sure to reduce, increase command and control and reduce deforestation, illegal deforestation for almost zero. But we also have the problem of the legal deforestation, which is also increasing in
the Cerrado. And for the Cerrado. We don’t believe that, at least in the short term, we’ll have political support for that. However, what we are proposing in the Cerrado White Paper that we need to create incentives for the producer to keep the forest and the biome, not only the forest, the biome, the native vegetation, in the case of Ceado, protected.
And for these, those measures include some policies in terms of give better conditions for the producers which are protecting larger areas in comparison to the forest code. But we also need to include financial incentives, payment for environmental services, special credit lines for producers that are protecting the native vegetation.
Gustavo Ribeiro: So, you touched on something that I was meaning to ask you. Many say that moves toward more sustainable practices are too pricey. And by what you said, I assume you believe this is a fair argument to be had.
Felipe Faria: I believe that we have two types of problems. One is the agriculture that can be improved in terms of have better systems that produce more with more diversification, higher resilience. This is one problem. And the second problem is exactly how we value standing native vegetation. improving agriculture, what we can see is that we have financial feasibility to make this transformation.
And in the report, we outline at least three strategies. First, the integration of livestock, forestry and agriculture, which is something that is already happening in Brazil. And what it means? It means that we are producing beef, we are producing timber in the same area and this is a movement that most of the, not most, but a good part of the land owners who have access to capital, who have access to the market and have access to technical assistance are already doing this movement because it’s more profitable.
The second movement, the strategy that we outlined is exactly go from extensive pasture land to semi-intensive pasture land, right? And increase the productivity of the beef production. It’s possible to increase at least by 100% the productivity, the amount of meat per hectare that we are producing, and in the same time reduce greenhouse gas emissions per kilo of meat that we produce by around 50%. So this is a movement where we can produce more beef in the same area and we have the chance to spare land for other uses.
And finally, agroforestry systems are a model that, again, also needs the three enabling conditions that I told you for the integrated livestock, agriculture and forestry, technical assistance, access to market and credit, but more focused on small properties because agroforestry systems nowadays, we have some constraints in terms of the area that is possible to manage a system like that because of the mechanization that is still low and also labor constraints. So, we still have something to advance in terms of how we make these agroforestry systems more feasible for larger areas, which is not the case nowadays.
Gustavo Ribeiro: So, you’re arguing that doing the right thing is good business, right? So, why is it so hard to change the minds of many farmers?
Felipe Faria: When we are assessing any value chain and how to transform value chains in the agriculture you need those three pillars. You need credit because usually you have a long payback in terms of when you do the transformation, you need some investments and to recover the investment, this can take four to eight years. So, we need credit, availability of credit. And this is a big constraint in Brazil. For example, smallholders, for example, in the Amazon, less than 5% of smallholders have access to credit and this is for sure a constraint, especially for smallholders. Second, technical assistance.
So, there is a big cost for producers to transform. Agriculture is a very complex field. There are many risks and often the producer has a low risk tolerance for these transformations. So, the producer really needs to be certain about that and for that we need to have demonstration units. The producer needs to have access to technical assistance, which is also a big constraint in Brazil if you don’t have access to capital. And finally, access to markets, right? We were talking about agroforestry. In agroforestry systems, you start to produce manioc, banana, beans, acai, cocoa, and other crops, and you need to be able to sell all these productions.
In many regions the market access is not something established. You don’t still have all the necessary logistics and buyers to be able to convince the producer that he will be able to really sell all those types of production. And we need to remember that if you are used to do only one crop, do many different crops in the same time is a challenge.
We need to remember that each species will have a specific way of treat the plant, the pruning, the harvest season, the inputs that you need to implement will be different depending on the plant. And this brings a high level of complexity and the producer needs to be comfortable with that. So that’s why it’s so hard and it is, you are right, it’s very difficult to transform agricultural landscapes.
But when we do, it’s very fast. When we see that something, for producers, that something makes sense for them, what you can see is that these transformations are fast. And we can see the Cerrado is a of that, how the soil transforms in only 20 years entire landscapes.
Gustavo Ribeiro: So in this recent report entitled the Cerrado Production and Protection, you guys mentioned the need for stricter regulation to lower rates of land conversion from vegetation to agriculture and pastures. Now do you think that the EU is an important market for Brazil and a lot of the commodities that we export are concerned by the EUDR.
Felipe Faria: Yeah, it’s important but it’s still a minor off-taker. It’s important because usually we have price premiums related to the EU, the market conditions could be better in comparison to other markets, but the proportion is still low. I really believe that on those moments, we have two options.
We can complain and try to postpone the impact of those type of regulations or we can be pioneers, understand the regulation and use this as an opportunity to grab a larger market. And I’ll give you another example that really shows how those transformations can impact markets.
Two decades ago, the EU changed all the sanitary conditions for imports of Brazil nuts. Brazil used to be the larger producer of Brazil nuts by far. At that moment, Brazil didn’t adapt to the new sanitary conditions that EU imposed and Bolivia adapted. What happened as a consequence is that Brazil lost all the international market, not all, but almost all the international market and related to the export of Brazil nuts and Bolivia assumed this role because they were able to structure themselves and be compliant with the regulation.
In the case of the EUDR, and in theory would not be exposed to the UDR as far as the regulation is designed now. However, the rationale that I give, that I explained to you, I believe is the same. We really need to understand where the market is going, what the consumers are asking in terms of the characteristics of the prediction and try to adapt and try to be a pioneer and try to look to these new regulations as an opportunity, move fast, understand and possibly have a market that is higher, not lower and more constrained.
Gustavo Ribeiro: Now, Felipe, if we take a brief look at another of Brazil’s biomes, the Pantana wetlands, One solution found there was the expansion and investment in ecotourism. Is that something you could also be looked at for the cerrado? What kinds of tourism opportunities are there in the biome for someone, say, visiting from the US or Europe, for example?
Felipe Faria: In the report, we outline that the ecotourism could be one of the sectors that could mobilize resources. I believe that the Cerrado is a place that has many attractions. If you have the chance to visit, to be there. In the same time, it’s a place that don’t have a lot of infrastructure. For example, if you fly from an international place, from Europe or from the United States, you need to fly to Sao Paulo, then fly to and to go to the Cerrado. So it’s not an easy place for foreigners to visit and also the infrastructure is not there. There are some movements, for example, Chapada dos Veadeiros was recently conceded to the private sector.
So there is a way, a possibility with more infrastructure, these will attract new visitors. Therefore, I believe that it’s an opportunity, but it will not solve all the problems. We need to remember that the Cerrado has 200 million hectares. It’s a continent, so we need to have a menu, a portfolio of options that could drive protection in the Cerrado.
What I believe that the ecotourism has a very important role is regarding awareness, right? Because when you visit you start to have a much deeper relationship with the place that you visited. And I believe that this is important for Brazilians to know their country, to know better the Cerrado, And so, I believe that the speech, the statements, the rationale for protection is much easier to be conveyed and to gather political support for a higher protection, for example.
Gustavo Ribeiro: You can also call for a new agricultural model in the biome as a way to increase conservation while also boosting economic growth. So tell us a little bit more about the current agricultural model in the Cerrado and in what ways you suggest it be changed.
Felipe Faria: These reports had as one of the objectives to raise the cerrado profile, especially for international audiences. People don’t know the Cerrado, especially when we compare to the Amazon, for obvious reasons because of the media attention that the Amazon has been receiving, because of the climate change impacts that we have been observing, its increase in frequency. So, therefore, the objective is to show that Brazil has not only the problem of protecting the Amazon, but also the Cerrado. Therefore, we expect to mobilize the attention and also create more bridges between the protection site and the protection conservation site.
Because we need those two, let’s say, in many ways polarized words to start to have more conversations about it. Because the production site is dependent and will be more dependent from the conservation of the native vegetation to provide the ecosystem services that are necessary not only for the agricultural sector, but for all of us that live in Brazil. The Cerrado is the Brazilian water tank. Many of the important hydropower plants that supply electricity for us are using water from the Cerrado. The water from the Cerrado is also critical for water supply for many cities and the food that is produced in Cerrado is fundamental for Brazilians but also for example sustainable aviation fuels for the entire world. Not the entire world because the supply is big, but help the sector to make the transition.
Gustavo Ribeiro: So, Felipe, what’s the next step? This report has managed to grab the attention of stakeholders, but what comes next? Could Brazil’s presidency of the G20 this year be an opportunity for concrete development in the Cerrado preservation?
Felipe Faria: What we want as next step is to all the companies, businesses, institutions that could have a relationship with the Cerrado, if you are a trader, if you are a banker, a bank that is providing credit to the industries that operate in Cerrado. If you are a philanthropic institution that didn’t pay attention for the Cerrado, and also the international community, to really start to pay attention to the Cerrado because of its importance for all the ecosystem services and biodiversity that this biome hosts. So, what I expect is to put the Cerrado in the center of the discussions and bring attention for decision makers that could adjust their strategies to create, indeed, a produce and protect vision for the next years for the Sahel.
Gustavo Ribeiro: Felipe, thank you for joining us.
Felipe Faria: Thank you. It was a pleasure to talk with you, Gustavo.
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