Globalization, Deforestation, and the
Expansion of the Cattle Industry into the
Brazilian Amazon
John O. Browder (Virginia Tech)
Robert T. Walker (Michigan State University)
2007 Annual Meeting of the Association of American
Geographers, San Francisco, California
Evolution of Cattle Herd in Brazil and
Legal Amazon
(Source: IBGE)
State
1990
2002
% Change
Brazil
147,102
185,347
+26.0%
Legal
Amazon
-Rondônia
26,258
57,388
+118.5%
1,719
8,040
+367.7%
-Acre
400
1,817
+354.2%
-Pará
6,182
12,190
+97.2%
% Brazil
17.8%
30.9%
Deforestation in the Brazilian Amazon
(square miles per year)
Forest Area Cleared (sq km)
(Source: INPE)
Year
Annual Area
1978-1988
21,130
Accumulated
Area
21,130
1990
13,810
34,940
1995
29,059
119,221
2000
19,836
204,356
2005
18,900
317,145 (6.4%)
Research Questions
The rapid expansion of Brazil’s cattle industry
since 1990 is clearly related to that
industry’s successful penetration of global
beef markets…
1. Has Brazil’s recent extraordinary success in beef
exports induced any significant internal restructuring of
its cattle industry?
2. How is the Amazon’s cattle sector articulated to Brazil’s
national cattle industry, and the global forces driving its
expansion?
4. How much new deforestation in Amazônia is now
attributed to the expansion of the Amazon’s cattle
sector?
Major Corridors of Cattle Industry Expansion
Note: 1= Central Production Zone (Center-West/Southeast Study Area)
2= Upper Amazon Cattle-shed (Goiana-Mato Grosso-Rondônia BR 364 Corridor)
3= Lower Amazon Cattle-shed (Belém-Brasilia-Transamazon BR 230 Corridor)
1. Foreign Market Penetration Hypothesis
• Hypothesis 1: The expansion of Brazil’s cattle
industry is largely explained by its successful
penetration of foreign markets.
• Test: ANOVA of number of slaughters per year
and percent of sales to foreign markets by
municipio or by company (survey data, CACEX,
Agriculture Ministry)
Evolution of Brazilian Beef Exports (all Products),
1990-2003
(Source: ABIEC)
Year
Percent
Change
1990
Metric Tons US$
(000)
(millions)
249
234
1995
269
445
+8.0%
2000
455
623
+69.1%
2003
1054
1300
+131.6%
Amazon Exports
“Between 1990 and 2001 the percentage of
Europe's processed meat imports that
came from Brazil rose from 40 to 74
percent" and by 2003 "for the first time
ever, the growth in Brazilian cattle
production—80 percent of which was in
the Amazon—was largely export driven."
(Source: CIFOR)
2: Regional Function Hypotheses
2.1: Foreign Market Articulation Hypothesis:
• Large producers located in aftosa-free municipios in the
Amazon will export directly.
2.2: Domestic Market Substitution Hypothesis:
• Producers (typically smaller) located in non-certified
municipios will replace beef supplies for domestic
markets that large producers in the Center-west had
previously supplied.
• Tests: ANOVA tests using processor survey data, key
informant interview information, and secondary data from
CACEX, SIGSIF.
3. Restructuration Hypotheses
3.1. Consolidation Hypothesis:
• There will be a higher rate of consolidation of large
producers in aftosa-free certified municipios into
corporate conglomerates than in non-certified
municipios.
3.2. Vertical Integration Hypothesis:
• There will be a higher rate of “verticalization” in aftosafree certified municipios as corporate conglomerates
seek to lower production costs by integrating more
stages of the production chain.
• Tests: Historical and descriptive statistical analyses of
changes in corporate holdings from 1995 to 2000 using
corporate key informant information.
Number of Beef Processing Plants by Corporate
Group and State – Southern Corridor
Corporate Group
Friboi
Goias
Mato Grosso
Rondônia
Total
1
4
5
10
Quatro Marcos
6
6
Margem
3
1
2
6
Marfrig
1
2
1
4
Arantes
2
2
Others (single plant co.)
20
15
2
37
25.9%
50.0%
80.0%
44.7%
Corporate Concentration Rate
4
4. Deforestation Selectivity Hypothesis
4.1. The rapid increase in beef exports has
resulted in rapid increase in deforestation and
pasture formation in key cattle producing areas.
• Test: ANOVA and spatial analysis of Landsat
scenes to determine rate of increase in area
deforested and rate of increase in beef exports
by municipio (using data from meat processing
industry survey) along study corridors.
Trends in annual Amazon
deforestation, the Amazon cattle
herd, Amazon soy production, total
soy exports from Brazil to the
Europe Union (EU) and China, and
the value of the Brazilian Real (in
U.S. dollars).
Source: Nepstad et all, 2006
Policy Factors Supporting Cattle Industry
Expansion in Amazônia
• Macro-economic Policy – Currency Devaluation
• Trade Policy – Elimination of Agricultural Export Taxes
• Infrastructure Investment – Road Construction
• Increasing Land Prices
• Property Consolidation in Colonization Areas – Household Life
Cycle
• Sanitary Certification of Amazon Cattle Producers
• Continuing EU Concern About Mad Cow Disease