[Written by Ahmed Saad, Diogo Fernandes, Rodger Douglas, Stephane De Jacquelot]
Deforestation in the Brazilian Amazon
According to a new study by the Climate Policy Initiative (CPI) and the Pontifical Catholic University of Rio de Janeiro (PUC-Rio), while deforestation in the Brazilian Amazon has fallen sharply over the past decade, a larger share of forest loss is now being driven by actors who are more difficult to control – small-scale clearings by local farmers – presenting a new challenge in the effort to limit the destruction of the Amazon.
Figure 1 – Evolution of Brazilian Amazon Deforestation
The Amazon
The Amazon is the world’s biggest rainforest, larger than the combined size of the forests in the Congo Basin and Indonesia, the second and third largest forests. In addition, it is a massive carbon sink, meaning it absorbs more carbon dioxide than it emits. However, researchers assert that deforestation has significantly decreased the amount of carbon dioxide absorbed from the atmosphere.
Deforestation in the Amazon
In the 1960s, a military dictatorship took power in Brazil and, concerned that a barely populated Amazon would leave the country vulnerable to foreign sovereignty claims and domestic insurgency, the government encouraged mass migration to the Amazon by implementing incentive programs that aimed to clear the land for production, triggering a large-scale deforestation of the Amazon. In 1971, the government announced a plan to build a 2,500-mile-long highway through the heart of the rainforest as part of a reform program aimed at alleviating poverty in the drought-stricken northeast. As result, hundreds of thousands moved into the forest to claim subsidized plots of land.
However, from 1988, the Brazilian Government and private corporations attempted to curb the deforestation of the Amazon through numerous initiatives and laws such as Forest Code (1988), Nossa Natureza (1989), Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) (1989), United Nations Framework Convention on Climate Change (1992), Environmental Crimes Law (1998), Soy Moratorium (2006), Amazon Fund (2009), Overhauled Forest Code (2012), UN Agreement on Forests (2014) and the Paris Climate Agreement (2015).
Ultimately, between 1960 and 2010, the population grew from six million to twenty-five million and, consequently, the deforestation resulted in loss of 19.1% of the Brazilian Amazon.
Table 1 – Annual Amazon Deforestation between 1977 and 2017
Causes of continued deforestation in the Amazon
Between 2005 and 2012, better monitoring of the forest, improved law enforcement, more efficient farming practices, and private-sector initiatives to halt the sale of goods cultivated on illegally deforested land helped bring down the rate of deforestation by 80%.
That said, deforestation and conservation policies affect the millions of farmers, ranchers and other Amazon residents who rely on the Amazon for sustenance. Many in Brazil’s agriculture industry say ranching and farming, which have contributed to wide-scale deforestation in the Amazon, have helped reduce hunger in the country. Therefore, despite some advances in environmental protections, the economic incentives to clear land remain as many small-scale farmers, who are responsible for the growing share of deforestation, say they clear land to grow food they need to survive. Additionally, according to an article on the Amazon Destruction by Rhett Butler, 85%-95% of the deforestation is driven by cattle ranching and small-scale subsistence agriculture.
Figure 2 – Time-lapse of Deforestation in Acre state of the Amazon in Brazil by Small Scale Farmers
Table 2 – Main Drivers of Deforestation in the Amazon
Impact of Amazon Deforestation
Deforestation has a serious impact and ramifications on the environment and such impact and ramifications have raised concerns of the international community. Amongst them are:
- Increased Greenhouse Gases: after burning of fossil fuels,deforestation is the second biggest source of greenhouse gas emissions, which scientists link to climate change;
- Loss of Habitat: one of the most dangerous effects of deforestation is the loss of animal and plant species due to their loss of habitat;
- Droughts: deforestation disrupts the regional precipitation patterns and is attributed to cause droughts. Consequently, rising temperatures and droughts contribute to the deforestation and death of trees, creating a human-instigated spiral of natural deforestation;
- Destruction of Homelands of Indigenous People
UN Sustainable Development Goal 15 – Life on Land
As part of the UN’s Sustainable Development Goals to transform our world, Goal 15 (Life on Land) aims to sustainably manage forests, combat desertification, halt and reverse land degradation and halt biodiversity loss. Amongst its targets, Goal 15 aims to promote the implementation of sustainable management of all types of forests, halt deforestation, restore degraded forests and substantially increase afforestation and reforestation globally by 2020.
Experts say that Brazil can meet its deforestation reduction goals while maintaining legal productive activity on much of the land that has already been cleared. Federal authorities can work with local officials to improve law enforcement and reduce illegal deforestation even in remote corners of the forest. In addition, policymakers can boost economic incentives to conserve and reforest, and international partners and consumers can take part of moratoriums on the purchase of produce from illegally deforested land as well as offer financial support for conservation and sustainable practices.
Amongst the sustainable practices that aim at curbing deforestation by small-scale farmers and ranchers, Peixes da Amazonia S/A (Fish of the Amazon), a B Certified Corporation, has implemented an initiative that fosters the adoption of sustainable agricultural alternatives to farming and cattle ranching by offering the farmers to take part of its processing of Amazonian native fish farming in a sustainable manner.
Peixes da Amazonia S/A
Peixes da Amazonia S/A was founded in 2011 and started operations in April 2015. It aims to develop a sustainable business model that not only creates value for shareholders but also delivers social impact through anchoring a production ecosystem that reduces deforestation and improves social outcomes for socially disenfranchised smaller holder farmers.
Figure 3 – Peixes da Amazonia smolt production, ration production and fish processing plant in Acre State
Aquaculture has always been a significant part of the local economy in Acre state, fishing is a big part of indigenous culture in the Amazon basin and carried out by internal immigrants settling in the state. The big problem is the small scale employed without proper processing and logistics services that struggled to get this production outside of the local market and add value to the production.
Peixes da Amazonia has set up a large-scale closed loop fish production unit focused on taking native value added Amazonian fish products to consumers throughout Brazil. They are providing centralised genetic selection, feed sourcing, processing, marketing and logistical infrastructure while partnering with smaller scale farmers who undertake the production phase of the cycle. The company is a certified B Corporation with both profit and social aspirations and has the fish producer’s cooperative, regional development funds and an impact investment private equity fund as shareholders. They are currently operating with three native fish species including one which is endangered due to over fishing. They are also actively researching a number of other native fish species with the aim of diversifying options for their suppliers and capturing value with new products.
Figure 4 – Some of Peixes da Amazonia’s product line
With the current infrastructure Peixes da Amazonia can provide services for around 3,000 fish farmers and their operation is inherently replicable in other areas providing an economic alternative to extensive agriculture in the Amazon. Subsistence agriculture for own use and local markets and extensive, extractive cattle ranching for a wider market is the common model for small scale farmers in this region. Extensive cattle ranching is inherently not sustainable as it relies on decaying the carbon and nutrient sinks to support pasture production in a decaying spiral of soil degradation. This mode of production generates about R$250/ha/annum of gross income for around 10-15 years before new areas must be deforested to maintain production. In contrast fish farming under this model can generate about R$11,000/ha of net income 100% in areas that have already been deforested.
This model is inherently impactful as it scales due to the positive externalities being a key feature of the production system and not merely a by product or having to trade off economic and social/environmental considerations.
At Peixes da Amazônia, everything has been carefully designed to combine the highest level of productivity with the lowest level of impact on the environment. Our objective is the sustainable aquaculture development of 3 native Amazonian species. This is achieved through a modern industrial complex that operates within a closed production system, guaranteeing good practices of handling, control, traceability and quality, from the production of the fingerlings to the end sale. – Peixes da Amazónia SA, corporate website
A truly innovative model
Fish of the amazon business model is innovative in many aspects. First, it is a model of re-sequencing by having the company only take care of the first and last stages of the process, respectively the nursing and processing, while outsourcing the time and space consuming growth phase. This allows the company to only focus their resources on the truly value adding and consumer facing steps while keeping out of the labor and capital intensive. By doing so they do not have to find the land and funding necessary to construct all the necessary ponds and can limit their own physical footprint.
Figure 5 – Fish farming process and outsourced operation
In addition, pooling the production across all these farmers enables selling the company to distribute much bigger volumes that what they could have achieved by themselves. Thanks to that they can sell their production through bigger distribution channels and get more value out of it. Furthermore, production risk, such as fish diseases, is spread out meaning less variability in the production volumes and more steady cash flows.
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References:
[1] https://www.cfr.org/interactives/amazon-deforestation/#/en
[2] https://rainforests.mongabay.com/amazon/amazon_destruction.html
[3] https://news.mongabay.com/2015/08/amazon-paradox-drop-in-large-scale-deforestation-makes-enforcement-more-difficult/
[4] https://climatepolicyinitiative.org/publication/strengthening-brazils-forest-protection-in-a-changing-landscape/
[5] https://en.wikipedia.org/wiki/Deforestation_in_Brazil
[6] https://www.un.org/sustainabledevelopment/biodiversity/
[7] https://www.peixesamazonia.com.br/
[8] https://sustainabledevelopment.un.org/sdg15
[9] http://www.kaeteinvestimentos.com.br/?lang=en
[10] http://bcorporation.eu/community/peixes-da-amaz%C3%B4nia-sa
[11] https://thefishsite.com/articles/cultured-aquaculture-species-barramundi
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