June 23, 2011

Pasture/Row Crop Rotations Could Reduce Deforestation in Brazil

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

There has been a greater emphasis in recent years to expand row crop production in Brazil into areas of pastureland instead of clearing new land for additional grain production. This effort has been in conjunction with the national goals of reducing deforestation as well was limiting greenhouse gas emissions. Approximately 70% of the greenhouse gasses emitted in Brazil are from deforestation and the clearing of land. The process of deforestation not only releases the greenhouse gasses contained in the vegetation, the subsequently cleared forest is also no longer available to serve as a carbon sink. As a result, the quickest way for Brazil to reduce greenhouse gas emissions is to limit the amount of deforestation occurring in the country.

As a way to achieve those goals, the Brazilian research service, Embrapa, has been conducting research for over ten years in long-term rotations involving pastureland and row crops. The goal of the research has been two-fold, not only to increase grain production without the necessity of clearing new land, but to also increase the carrying capacity of the land once it is returned to pastures.

Many cattle ranchers in Brazil have been reluctant to invest limited resources in periodically reforming their pastures due to the high costs and long payback period. Researchers felt that if ranchers could get an immediate return on their investments by selling grain for one or two years, they would be much more willing to invest what is needed to greatly improve the productivity of their pastures.

Researchers from Embrapa estimate that it would cost R$ 1,300 per hectare to remove the pasture and plant a crop of rain-fed rice. The sale of the rice would generate an income of approximately R$ 500 per hectare. After two rice harvests, the area would then be replanted to higher yielding and more nutritious pasture grasses for another eight years. The improved pastures would then have a much higher carrying capacity and improved productivity. The process could then be repeated every ten years.

The National Economic and Social Development Bank (BNDES) is offering low interest loans for this type of pasture renovations. The loans carry an interest rate of 5.75% (which is less than half the prime rate) with a three year grace period and twelve years to pay off the loan. The loans could also be used for stump removal and improve fencing on the property as well. The financing package is part of the 2011/12 Harvest Plan released by the Brazilian president late last week.

One of the reasons for the interest in pasture/row crop rotations is because there are approximately four times more acres of pastures in Brazil as compared to row crops. If row crop acreage is to be expanded in Brazil, these types of rotations could serve as an alternative to the clearing of new land and the environmental concerns associated with deforestation.