Brazil Can Use Land More Efficiently to Simultaneously Grow Agricultural Production and Protect Natural Resources

RIO DE JANEIRO, Dec. 3, 2013 /PRNewswire/ -- Brazil has vast natural resources that carry immense potential for the country's economic and environmental goals. Yet efficient land use, which can help the nation achieve both goals concurrently, still stands as a great challenge.

A new Climate Policy Initiative study, "Production and Protection: A First Look at Key Challenges in Brazil," finds the nation has room for enhanced protection of natural resources and growth of agricultural production. From a protection standpoint, the country would benefit from significantly driving up the cost of clearing native vegetation, as well as through the advancement of market-based incentives that promote sustainable practices. From a production standpoint, there is room to increase Brazilian agricultural production via productivity gains, at no apparent cost to environmental conservation.

"Brazil's natural resources are the foundation for our country's future," said Izabella Teixeira, the Minister for the Environment of Brazil. "Climate Policy Initiative's analysis identifies challenges to, and opportunities for, increased productivity of existing agricultural land and protection of native vegetation. It shows that if Brazil pursues the right strategy, we can both grow our economy and protect our natural resources." 

Today there is substantial variation in agricultural productivity both across and within Brazil's five regions. Much of this variation can be attributed to non-geographical factors such as access to finance, technology, rental markets, cooperatives, and infrastructure. The study looks at each of these factors for Brazil's major agricultural sectors in turn, indicating ways in which to increase productivity.

For example:

• About a fifth of the regional variation in Brazilian agricultural productivity is associated with credit availability, suggesting that greater access to credit could improve productivity. Yet, access to rural credit in Brazil is limited. According to data from the last available Agricultural Census, about 75% of large-scale crop farmers and less than 20% of small-scale agricultural producers accessed credit.
• In infrastructure, Brazil's crop storage capacity can accommodate 80% of total harvest, well below the recommended 120%. Similarly, poor roads make transportation costly – carrying a ton of soybean from one of Brazil's leading soybean production municipalities to its point of export is almost three times more expensive as it is to carry the same amount of soybean over a similar distance to a port in the United States.

The analysis also looks at Brazil's recent conservation policies, finding that over the past decades, the country has made significant progress in the protection of its natural resources, especially in the Amazon. In 2006, protected areas occupied more than ten times the area they covered in 1985. Today, Brazil has a relatively consolidated regulatory framework and well-established instruments for the protection of natural resources in public lands. However, the study points out that challenges remain in the protection of native vegetation among smaller-scale deforesters, on private property, and with Brazil's ecosystems beyond the Amazon, while sustainable forestry is underdeveloped.

Moving forward, Climate Policy Initiative recommends two immediate steps: First, introduce the systematic monitoring of selected areas with key land uses, for identification and assessment of efficiency gains. Second, integrate action across government agencies and private firms to structure and develop a Production and Protection strategy.

"The case for action is clear," said Juliano Assunção, director of CPI's Brazil operations and professor at the Department of Economics at the Pontifical Catholic University of Rio de Janeiro (PUC-Rio). "We look forward to working with stakeholders in Brazil over the next years to implement a land use strategy that helps Brazil achieve both its economic and environmental goals."

For more information, and to download the report, visit www.ClimatePolicyInitiative.org.

Climate Policy Initiative is a team of analysts and advisors that works to improve the most important energy and land use policies around the world, with a particular focus on finance. An independent organization supported in part by a grant from the Open Society Foundations, CPI has offices and programs in Brazil, China, Europe, India, Indonesia, and the United States.