- Complete tracking of the cattle supply chain from calving to slaughter would guarantee that the beef produced in the Amazon is untainted by illegal deforestation.
- The largest meatpackers have been promising to track their indirect suppliers since 2009. Now, under pressure from investors, they have set a deadline of 2025.
- The tracing technology and data already exist. But a lack of integration between information systems, concerns over data confidentiality and resistance from the sector are slowing progress.
A set of tools that is already used in Brazil may be the key to controlling deforestation in the Amazon rainforest caused by the cattle raising industry.
According to data from the Trase platform, which highlights the relationship between commodities and deforestation, 80% of the Brazilian forest razed in 2018 became pasture supplying the country’s supermarkets, despite public agreements that the sector has signed promising to eliminate illegal logging from their supply chains.
Substantially reducing the problem requires no new technologies or large sums of money, and the meatpackers seem to have realized this. On September 23 the world’s largest meatpacker, JBS, said it would increase controls over its supply chain using currently-available public data. Marfrig had also made a similar announcement in July, and Minerva confirmed to our reporters that it has been carrying out risk analyses since August.
The companies decided to act to calm overseas investors, who are looking for ways to divest from meatpackers, fearing repetitional damage. “The problem is the purchase of cattle from suppliers over whom you don’t necessarily have any control. The person you buy from directly from may be okay, but if he buys from another supplier, you really don’t know [if the animal is legal],” said Eric Pedersen, director of responsible investments at Nordea, a European bank which divested 240 million Brazilian Reais ($43 million) from JBS stocks in July. Last year, Norwegian Storebrands Asset Management sold off its shares in Marfrig for the same reason.
But while the giants of the beef industry promise to combat deforestation by 2025, the systems which would allow Brazil to tackle herd control have existed for some time.
The list includes publicly available information on deforestation generated by satellite data from INPE (the National Institute for Space Research); the federal government’s “dirty list” of slave labor; IBAMA’s register of fines and embargoes; private property boundaries and conservation obligation data included in the Rural Environmental Registry (CAR); and the inter-farm cattle transport data registered by the Animal Transport Guides (GTA).
They are all distinct systems but were they to be united by a mechanism directed toward guaranteeing environmental legality, they could provide a competitive edge to Brazil’s meat industry, helping reconcile the agendas of environmentalists and businesses in the Amazon.
Invisible links focus 60% of the problem
Today, the meatpackers monitor the origin of the animals they slaughter by checking the legal status of their direct suppliers. The problem is that only a very small portion of these rural properties raises the calves from birth. Most cattle farmers specialize in a specific phase of the animal’s life cycle or, at most, two: breeding, weaning, growth, or fattening. And some of these phases can be subdivided. This is why before slaughter an animal has probably lived on more than one unmonitored farm.
“For each direct supplier, I have 5 or 10 other related ones. So, if I have 16,000 suppliers within the Amazon biome, as is the case with Marfrig, we are actually talking about over 100,000 properties to monitor. It’s an enormously complex problem to fix because it’s not just a technology issue,” Paulo Pianez, Marfrig’s director of sustainability, said at a virtual company meeting earlier this year.
The only way to guarantee that the product sold to consumers is not linked to illegal deforestation is to register and monitor each property through which the animal passes before slaughter. “It is impossible to end deforestation in the Amazon, or at least achieve a minimal number of environmental crimes without fully tracking everything produced there,” Daniel Azeredo, a public prosecutor who led the investigations for the Legal Meat Operation, which revealed irregularities in the Brazilian beef production chain, told at the Mafrig’s virtual meeting.
He believes that the lack of coordinated monitoring is the main reason that the sector continues to be contaminated by deforestation, despite the advances made since 2009. That year, the Federal Prosecutor’s Office’s Conduct Adjustment Agreements were signed together with the Public Livestock Commitment (CPP), which obligated the companies to monitor their suppliers in order to guarantee that their products would be free of deforestation and slave labor.
Despite the new controls, illegal activity is still common. In July, for example, Amnesty International revealed that JBS had been slaughtering beef raised on Indigenous reserves, which is illegal. In the previous months, investigations carried out by Greenpeace and Repórter Brasil accused Marfrig and Minerva of similar activities. Together, the three meatpackers hold 42% of the slaughtering capacity at all the meatpacking plants currently operating in the Amazon.
This happens because, even though it is efficient, the monitoring carried out today does not take into account that most of the deforestation occurs on farms where the cattle are born and weaned, the phase called “cow-calf” farming. These links are invisible under the current system, which covers only direct suppliers.
Sanitation traceability offers a solution
The ideal model for guaranteeing complete tracking of the beef supply chain would be individual monitoring of the animals, where each steer or cow is allocated a tracking number at birth. Normally this is a GPS-enabled ear tag with a chip storing information on the animal’s origin and transport history. Brands or tattoos are also acceptable, which function as a stamp identifying each farm through which the animal has passed.
Uruguay and Australia use this control technology on their entire herds. But in Brazil, the solution has been resisted by cattle ranchers, who say the process is too expensive, bureaucratic and complex, according to a 2017 study by the NGO Proforest. “Even if the cost may not be very high, if changes aren’t paid for by the meatpackers, they are normally rejected. Plus, the image that the producers traditionally hold of the process makes it hard to get them to adhere to individual identification systems,” it said.
For this reason, according to the National Agriculture Federation, less than 10% of the Brazilian cattle herd is linked to individual ranchers in the SISBOV, Brazil’s official cattle tracing system.
And even SISBOV has its gaps, according to a study released last month by the Brazilian Coalition on Climate, Forests and Agriculture, that showed there are cases in which ear tags are put on the animals only 90 days before slaughter or export. “The system wasn’t conceived in order to guarantee the legality of the animals’ origins. In order to do this, it would be necessary to register the animal as soon as it is born or at least before its departure from the farm where it was born. This doesn’t happen,” the report said.
But Brazil does efficiently track its herds via a system that monitors animal health. This system can quickly identify ranches at risk of spreading contagious diseases if an outbreak occurs. While it doesn’t work on the level of individual cattle, instead grouping animals together, this mechanism is trusted by the international market to assure that exported beef is not contaminated with any viruses that could harm the health of animals in other parts of the world.
This system could, if adopted to environmental interests, be the key to guaranteeing deforestation-free consumer products. According to an estimate by the Brazilian Certification Service mentioned in the Brazil Coalition study, this system accurately covers 97% of the national herd.
“It would be viable to use the sanitation tracking database and apply data layers to monitor for deforestation or social issues. To add new levels of complexity onto the current information,” said Luiz Henrique de Almeida, head of the Latin America sustainable cattle raising strategy at Partnership for Forests (P4F), which is working on a solution to the problem.
On the other hand, some cattle ranchers are reluctant to use the sanitation tracking system for environmental purposes over concerns that it will encumber the existing disease-control system. There are fears that producers will avoid registering moves between farms in case they are blocked as suppliers to the meat packers — a scenario that would put the entire supply chain at risk if a contagious disease were to appear and spread, such foot-and-mouth disease.
Challenges of connecting public systems
The heart of the sanitation tracking system is the GTA, or Animal Transit Form, a document created each time a group of animals is transported from one farm to another. It specifies the number, origin and destination of the cattle, and is compulsory even for transport of animals between farms belonging to the same owner. If a contagious disease does appear, health authorities can retrace the path of the affected animals and alert the farms they passed through that they may be at risk, or go directly to the origin of the outbreak and eliminate it.
The same logic can be applied to environmental control, retracing the path of cattle until their arrival at the meatpackers and verifying if any of the farms through which they passed is responsible for illegal deforestation. “The GTA has enormous potential for increasing the reach to indirect suppliers,” concludes Proforest in its study. But in order for this to happen, use of the digital version of the document has to be standardized — some states still use paper to document transactions — and, more importantly, there has to be an effort to connect the history of these documents to every batch of animals taken to slaughterhouses, experts say. Today, the only GTA that is delivered to the meatpackers is the one from the last farm through which the cattle passed.
Once this first step is taken, other public systems may offer the additional information needed to identify deforestation or slave labor associated with the farms mentioned on the GTAs and also check if the areas overlap conservation areas or Indigenous Territories.
“Brazil has all the tools it needs to fight illegal deforestation and land grabbing. All the information is there, but the fact that the data isn’t integrated makes things complicated. In recent decades we have built a fantastic set of tools to generate information, administrative intelligence and governance, but we haven’t integrated them,” said Marcello Brito, president of the Brazilian Agribusiness Association (ABAG).
Concerns over confidentiality
Even though the data on the GTA and the CAR exist and are available to the public, access is restricted, which makes it impossible to create a transparent system to check the origin of the cattle slaughtered in the Brazilian Amazon. This is why meatpackers have still not moved forward with monitoring the activities beyond the gates of their direct suppliers, even though the agreements signed clearly state they will cover the entire supply chain.
“When a meatpacker receives a shipment of cattle for slaughter, the GTA from the most recent farm, the one selling the batch, arrives with it. So the company can check all the data on that property, do the mapping and the environmental suitability check. But it doesn’t receive the GTAs from the previous farms, the ones that sold the cattle to the last one, because the [authorities mark] this documentation as confidential,” explained Federal Prosecutor Ricardo Negrini of the Pará State Federal Prosecutor’s Office.
This is the biggest roadblock preventing the linking of GTAs, officials say. “These documents contain private information and are protected under the Personal Data Protection Law, meaning the GTAs may not be published,” according to the Ministry of Agriculture and Cattle Farming.
An analysis of IBAMA’s online system helps explain the restrictions. The system allows users to review all fines handed out by IBAMA, including the tax ID number of the individual or company, the amount of the fine, the municipality where it was given and details of the infraction. The list of embargoed areas is even more specific and shows the location of the farm on a map.
None of this happens on the Federal Government’s Farming and Cattle Raising Management Platform, on which all the transit forms created by the states are stored. The only way to check if a GTA is authentic is to use the barcode from the document. One has to have information on the GTA ahead of time, which depends on cooperation from the cattle rancher. To make things worse, only one GTA can be checked at a time.
In 2015, the Federal Prosecutor’s Office reccomended GTAs should be made publicly available in their entirety. The Ministry of Agriculture and Cattle Farming itself promised to give transparency to the GTA system in its 2018/2019 open data plan, but backtracked at the last minute.
The main argument for maintaining restricted access echoes the reasoning of rural producers — that the publication of this data would reveal “business transactions that place the physical and patrimonial safety of farmers, their families and employees at risk, in addition to exposing business strategy for both the domestic and international markets, with risks and damages to the activities that protect farming and cattle raising and the economies of the States”.
Five tools for overcoming the obstacle
The impasse concerns environmentalists, agribusiness and retail chains alike. On the one hand, those defending nature want to prevent the Amazon rainforest from losing its capacity to regenerate and being transformed into savanna — a scenario thought to be fast approaching. Farmers and industries are struggling under the pressure from international investors. Companies carrying greater social and environmental risk tend to be less profitable and more exposed to financial loss. Finally, supermarkets are concerned with boycott threats from consumers and also with investor sanctions when their supply chains are international.
The convergence of these issues led in 2015 to the establishment of the Indirect Supplier Work Group (GTFI), which helped the parties come together. “There is practically a consensus that using the information contained in GTAs and its integration with the CAR (Rural Environmental Registry) database is the most promising solution for environmental tracking,” said Pedro Burnier, a member of the NGO Amigos da Terra and coordinator of the GTFI.
The group’s debates led to the development of many tools that use public data and take on the question of GTA confidentiality from different angles.
The belongs to the company NicePlanet, which already offers consulting services to Minerva for tracking of direct suppliers. It is even developing a verification tool for the company to use in its operations in the Paraguayan Chaco, where demand for social and environmental transparency is also growing.
Aside from the solutions developed by the private sector and specialized companies, the beef industry itself is designing and perfecting similar open-source tools to improve tracking. Marfrig and Minerva have announced they will use the tools developed by the NGOs, while JBS has opted to use its own system, which closely resembles the Conecta project’s platform. Marfrig also decided to revive an old in-house tool called Request for Information, or RFI.
Computational power vs. collaboration
Usually, the suggested solutions are based on public embargo lists and slave labor allegations, databases of protected areas and on INPE satellite imagery. The consultation of these systems is carried out from the information registered on the GTAs and CARs.
The difference is in the way they are obtained. While Visipec uses computational intelligence and automation to dodge roadblocks and access the public GTA and CAR systems, the Conecta project and NicePlanet, like Marfrig’s RFI and JBS’s Green Platform, rely on ranchers’ voluntary supply of information.
“The rancher signs a commitment and offers to supply our database with information. These are ranchers who understand the value of maintaining the legal reserves on their farms. Our platform empowers them, making it possible for them to capitalize on this by gaining bargaining power with the meatpackers,” said Luiz Henrique de Almeida of P4F.
Visipec’s method of extracting information directly from official servers has led to criticism that the data are not obtained legitimately, even though they are official data, and has prompted privacy concerns.
“Even though Visipec uses public databases, it is important to stress that the tool does not store the information contained in the databases. It is a common misunderstanding. Visipec connects indirect and direct suppliers based on information about the properties, not about people,” said Simon Hall of the National Wildlife Federation, “This means that many of the potential problems surrounding confidential personal data are irrelevant or could be easily managed.”
While it is not free of controversy, the technique of scraping data is also used and defended by researchers. This is how a group from the Minas Gerais Federal University (UFMG) led by professor Raoni Rajão revealed that at least 17% of the Brazilian beef exported to the EU was produced in deforested areas in the states of Pará and Mato Grosso.
“It is important that federal and state agencies as well as academia work with these data and provide the information society is asking for: basically, to know if trees have been cut down or not, and if it isn’t necessary to reveal the names of the people involved,” Rajão said.
The question of rancher compliance
Dependence on the voluntary supply of GTA and CAR data from cattle ranchers themselves also raises questions. The Proforest diagnosis regarding Marfrig’s Request for Information stresses that this format is limited: it allows one to go only one step beyond the cattle supply chain. “If there are other intermediary suppliers between the first (calving) and final (feedlot) stages, it is possible that the system will not reach these properties.”
The fact that it backtracks only to the first link before the direct supplier is not the main problem because according to the GTFI studies, 48% of the deforestation happens in this part of the supply chain. Because of this, it could be hard to convince direct suppliers to offer data on their purchases because it would drastically reduce their negotiating options as it would mean excluding all suppliers with poor environmental records.
Even the director of NicePlanet, who is also a cattle rancher, declined to use the system on his own property because it was too “complicated”.
“I am a cattle feedlot owner and skinny animals are my raw materials. Why would I create a restriction for myself, raise [purchasing] costs, if it brings me nothing aside from the results of the study?” Jordan Timo Carvalho said.
The Conecta project is aware of this problem but is focusing on other ways of attracting ranchers. Aside from believing that adherence to the system can mean empowerment for ranchers who abide by the law, increasing their negotiating power with meatpackers, the group of organizations formed a partnership with SEBRAE, which offers training for farm owners to improve management of their properties and increase profit from production.
“Participation in the activities and training requires the producer to sign a commitment and make the information available to feed our database,” explains Luiz Henrique de Almeida of P4F. Today, the project is up and running on farms in São Félix do Xingu in the state of Pará and 85 cattle ranchers have already signed the commitment.
JBS and Marfrig announced that adherence to the Green Platform will be compulsory for all the company’s direct suppliers by 2025. The company promises technical and legal assistance to help indirect suppliers who want to become part of the official supply chain.
The fact that small ranchers are marginalized because they don’t have the financial clout to invest in technology to adapt their farms raises another issue: they could end up supplying smaller meatpackers which have no public agreements and some of which even operate illegally. “Note that the more quality is required of rural producers, the more marginalized the small and medium farmers become, feeding the informal market. The probability of this product staying on the domestic market is immense,” said Taciano Custodio, head of Sustainability at Minerva Foods.
“The complexity of the production chain allows farmers excluded because of illegalities to always find buyers for their animals, foiling the objectives of the tracking systems,” according to Coalition Brazil.
An initiative is being developed by the NGO Imaflora to fill this gap, lending greater transparency to agreements aimed at controlling the origin of beef produced in the Amazon. Called Boi na Linha, the project will create a standard for measuring performance. “We want to show who has signed the TAC, which plants are covered, if the companies have signed the agreements in more than one state and if audits are being carried out,” said Lisandro Nakaki de Souza, the project coordinator.
Risk analysis and mentality adjustment
For Proforest, the secret to increasing controls within the cattle supply chain isn’t a matter of choosing just one of the methods, but rather combining all the possibilities currently in use in Brazil.
“The most appropriate thing would be to think of social and environmental tracking and monitoring strategies that are adapted to different circumstances,” the group said. For example, if the meatpacker makes its purchases in areas with high rates of deforestation, and where small calf producers with low productivity are concentrated, individual traceability can make a difference. But this technique does not need to be applied to large direct suppliers that are located in regions with low rates of deforestation.
One model to be followed is the Wood Legality Verification System developed by Bolsa Verde Rio, which compares data such as the productive capacity of a region with information on fines given, satellite imagery and field audits. The system can identify if a purchase presents greater or lower risk of having links to illegal deforestation. “The verification procedures include document checks, information checks and data consistency checks, which can identify irregularities or fraud,” according to the group.
Meanwhile, the meatpackers are already launching their risk analysis tools. Marfrig has announced that it is creating a Risk Mitigation Map and Minerva has promised to have the diagnostics on its production chain complete by the end of the year. Meanwhile, the Federal Prosecutor’s Office has incorporated a maximum productivity calculation in its audits, which makes cattle laundering more difficult.
What may lie ahead for Brazil’s cattle farming supply chain in the Amazon is a change of mentality. “The industry understands that it must meet demands for more sustainable products. The focus which is currently on competition for suppliers will have to change to product quality,” said Almeida of P4F. “They will have to include this attribute and make purchasing decisions based on it instead of structuring the supply chain according to the lowest price or greatest volume.”
This report is part of a series investigating the relationship between the financial market and the Brazilian beef industry. If you would like to contact our reporters to offer a suggestion, please write to: [email protected]
This story was originally published in Portuguese by ((o))eco.
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