August 27, 2015

Degraded Pastures Primary Source of new Row Crop Land in Brazil

In recent years, one of the primary sources of additional land for row crop production in Brazil has been the conversion of degraded pastures to row crop production. Pastures are considered degraded if they have a low level of fertility, are highly erosive, and have a low carrying capacity for cattle. Using degraded pastures for additional crop production is highly desirable because it reduces the pressure to deforest new land and it is a more intense use of existing land, which has many environmental benefits.

Estimates are that there are approximately 81 million hectares of pastures in Brazil that could eventually be converted to row crop production (approximately 200 million acres). Not all of that land will be put into crop production, but if only a small part is utilized, crop production in Brazil could continue expanding indefinitely in the years ahead if market conditions warrant the expansion.

This additional land is needed to increase row crop production because some of the existing row crop land must be converted back to its original vegetation. Several years ago, the Brazilian Congress adopted a new Forestry Code that requires landowners to reforest part of their land if it was deemed to have been cleared illegally. This highly contentious legislation requires reforestation especially along waterways and other environmentally sensitive areas. The total amount of land that will need to be reforested is estimated at 13 million hectares (32 million acres). Landowners have until mid-2016 to register their plans with the federal government as to how they will conform to the new regulations.

The new regulations are complicated, but generally, the larger the waterway, the more reforestation that is required along the banks. If it is a small stream, they may only need to reforest a few meters back from the bank. If it is a major river, they may have to reforest several hundred meters. There are exemptions from most of the regulations if you are a small family farmer or if the land was cleared before a certain date.

Yet to be resolved is the issue of landowners with multiple properties and if they can reforest one property and leave another property completely in row crop production. If the different properties are in the same biome, exchanging acreage like that is allowed. What is unclear is if it is allowed if the properties are in different biomes such as cerrado and rain forest.