Presented by Pablo Pacheco at the Land and Poverty Conference in Washington, DC, USA, in 2016. ---- This research is supported by USAID funding for CIFOR’s Governing Oil Palm Landscapes for Sustainability (GOLS) project, and this work is partly funded by the United Kingdom’s Department for International Development KNOWFOR Program Grant to CIFOR. This research is part of the CGIAR Research Program on Forests, Trees and Agroforestry (FTA), which is funded by the CGIAR Fund Donors.

1. Public and private actions for shifting towards
sustainable production of beef and palm oil
Pablo Pacheco
Land and Poverty Conference
Washington, 2016

2. HIGHLIGHTS
 Slowdown of deforestation in Brazil but with growing supply of soy and beef
 Persistent expansion of oil palm in Indonesia with pressures on forests and peatlands
 More progressive regulations and institutional arrangements are in place in Brazil
 Less synergies between public and private initiatives and actions in Indonesia
 Lessons can be learned from Brazil about what is feasible and desirable
 Still much to do in how to promote sustainable production that work for all
 Some social and environmental risks have still not been addressed in Brazil

3. THE CONTEXT
 We have entered an era of commitments from public and private actors
 Governments are committing to reduce their GHG emissions and LEDS
 Companies are committing to support deforestation-free supply chains
 Landholders are increasingly prompted to adjust to these commitments
 Available technologies and tools to monitor impacts at wider scales
 Still no consensus on definitions, targets to be achieved and timeframes
 Enforcement of progressive regulations to halt deforestation is crucial
 But it is also the efforts of companies to accomplish their commitments

4. THE CHALLENGE
 Halting deforestation is not just about forests because of the collateral implications
 It provides an unique opportunity to trigger intensification and sustainable land uses
 But, it also leads to some associated social and environmental risks
 Sustainable options require of investment and production models that:
- Make economic sense to all stakeholders involved in the short and long term
- Equitably share the costs and benefits from new policy and market conditions
- Support empowerment of local actors that embrace sustainable land uses
 Solutions to deforestation have also to guide new agrarian transitions
 The outcomes have to be acceptable to wider society outside forest areas

5. OPPORTUNITIES AND RISKS
 There are some unique opportunities
- Stopping deforestation leads to reduction of GHG
emissions and mitigate climate change
- Reduces investments in low production systems and
stimulates recovery of degraded pastures
 But there are also some likely risks
- Leakage to other vulnerable ecosystems, for example
Cerrado or other Amazonian countries
- Medium-scale ranchers locked in a situation with lack
of access to credit and in need to invest to intensify
- Some social risks since smallholders can be excluded
from supply chains due to capacity constraints
- Also environmental risks due to adoption of artificial
solutions for increasing productivity and profits
- May also lead to retarded economic development of
less developed regions or municipalities

6. BEEF CATTLE IN THE BRAZILIAN AMAZON
Total cattle
population
81
Million heads
Slaughterhouse
s
95
In the Brazilian
Legal Amazon
Cattle
population in
smallholdings
20%
out of total
BLA
Pasture lands
60%
out of total
deforested
lands
Cattle
population
38%
out of total in
the country
Stocking ratio
1.0
Head/ha
3
corporate
groups
control most
of the supply

7. 10.5
Million
cultivated
Labor
3.0
Million people
27.8
Million tons
CPO
Smallholders
42%
of total
cultivated
area
~600
Palm oil mills
25
corporate
groups
control most
of the supply
Indonesia
3.5
Tons
CPO/ha/yr
53%
global CPO
supply
PALM OIL IN INDONESIA
Farmers
2.1
Million
households

8. PUBLIC AND PRIVATE ARRANGEMENTS IN BRAZIL
 Soybean moratoria – stimulated soy expansion on pasture lands
 The black list of municipalities - “green municipalities” model
 A key step: the environmental rural registry [TAC and CAR]
 The cattle agreement – involving JBS, Marfrig, and Minerva
 Significant legal reforms - approval of the new Forest Code
 Policies: insurance, land use planning, finance schemes for LCA

9. LESSONS FROM THE ACHIEVEMENTS
 Clear legal frameworks as well as distribution of
responsibilities among different levels of government
 Enforce regulations consistently based on
transparent monitoring open to the wider society
 Governments at intermediate levels play a key role
in land registration, planning and enforcement
 Institutional mechanisms to make accountable to
individual producers and company buyers
 Economic policy instruments (e.g. public credit,
fiscal transfers) to support environmental regulations
 Agreements among key actors (e.g. retailers,
industry and state) and compliance monitoring

10. SOME UNRESOLVED ISSUES
 Limited adoption of good management practices for cattle beef
 Intensification with artificial and costly systems based on chemical inputs
 Medium-scale and smallholders more constrained to adopt new systems
 Deforestation is linked to smallholders often still expanding in frontier areas
 Persistence of leakage and laundry due to complex cattle beef value chains
 High-risk areas often related to lack of titling, and poor infrastructure
 Lack of positive incentives for producers to overcome constraints

11. WHAT LESSONS FOR INDONESIA?
 Agreed map among state actors identifying “go” and “no go” areas
 Clear sanction mechanisms with disclosure of non-compliant producers
 Transparent monitoring with open access of outcomes to wider society
 Promote compliance of environmental law under unclear tenure rights
BUT greater attention should be placed on:
 Identification of measures to support intensification
 Positive incentives for supporting the reduction of yield gaps
 Design of frameworks to incentivize inclusive business models

12. WAYS AHEAD
 Increasing control and incentives in the supply chains
- Extend the traceability from direct to indirect suppliers
- Monitor and rewards for improvements in performance
- Technical assistance with flexible technological packages
- Investments in productive infrastructure and logistics
 Policies to lower risk and increase investment attractiveness
- Land regularization and clarification of tenure rights
- Land taxation with differentiated rates depending on use
- Integrate environmental criteria in commercial lending
 Jurisdictional and/or territorial arrangements
- Systems to monitor social and environmental performance
- Certification processes with independent systems of verification
- Fiscal incentives to support good environmental performance
- Policies of preferential procurement by processors/industry

13. KEY QUESTIONS
 What are the unfinished tasks of the Brazilian policy framework to support smallholders
after deforestation slowdown in the Amazon? What positive incentives are needed?
 What more synergies between the public and private sector are needed to facilitate the
transitions towards more sustainable land uses and intensive production systems?
 What are the initiatives implemented by the beef industry in Brazil to foster more
sustainable supply chains? What else is needed to foster adoption of good practices?
 Is it possible to integrate supply chain and landscape management approaches? What
innovative perspectives have evolved in Brazil with potential for scaling up?
 What are the public and private arrangements needed in Indonesia to halt deforestation
and peatlands conversion while supporting more inclusive business models?