October 5, 2011

Deforestation Declines in Brazil, Degraded Pastures Used for Increased Crop Production

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

The Brazilian National Space Institute (Inpe) recently reported that during the month of August 164 square kilometers of land had been cleared in Amazon Region of Brazil. This is 38% less than in August of 2010 and the lowest amount for the month of August since the government started the Real Time Deforestation Detection System (Deter) in 2004. The August number was also less than the 225 square kilometers deforested in July.

According the Brazil's Environmental Minister, Izabella Teixeira, the amount of land clearing in the Amazon Region should decline again in September. For the purpose of deforestation, a year is defined as the period from August through July and in 2010, there was 6,450 square kilometers of land cleared in the Amazon. This is the least amount of land clearing on a yearly basis since they started tracking it in 1988.

The system of "real time" tracking can detect an area of clear cutting as small as 25 hectares (62.5 acres). It can also determine if a forest is degrading over time due to selective cutting or over use.

The government has tightened the rules concerning land clearing and many farmers have turned to existing degraded pasture lands for their crop expansion instead of clearing new lands.

Brazil utilizes 27% of its land area for crop and livestock production and of this total; 200 million hectares are what is considered degraded pastures. These are pastures that have a very low carrying capacity (less than one head per hectare) due to low fertility, high amounts of erosion or poor management. It is on these types of lands where much of the crop expansion is expected to occur over the next few years.

In the state of Mato Grosso do Sul for example, there are an estimated 9 million hectares of degraded pastures and only 1.7 million hectares of soybean production. In Mato Grosso do Sul, the number one agriculture product is soybeans followed by beef and then forestry products. Reforestation projects and cellulose production is ideally suited for these degraded pastures and it is estimated that cellulose will be the number one agricultural export product from the state of Mato Grosso do Sul within three years.

A lot of foreign investments have flowed into Brazil in recent years for reforestation and cellulose projects, but those investments suddenly stopped in August of 2010 when the Brazilian president essentially declared a temporary halt to foreign purchases of Brazilian farmland. At the time, President Lula instructed the Brazilian Congress to draft new legislation concerning foreign purchases of Brazilian farmland and those new regulations are supposed to be announced by the end of the year. Until then, foreign investors will remain on the sidelines.