The landlocked Latin American nation of Paraguay has seen some of the most rapid deforestation on earth in recent decades. From 2001-2019, the country lost a staggering 6 million hectares of forest – much of it in the Gran Chaco biome in the west of the country. And the deforestation shows no signs of slowing. Beef ranching is the primary driver but the risk is that soy – now farmed mainly in eastern Paraguay – will soon spread west and put more pressure on the Chaco. Together, the beef and soy industries directly account for 10% of the country’s GDP but influence 70% of the economy. Paraguay, not unreasonably, has ambitious economic development plans for its livestock sector and new roads are planned to connect the Paraguayan Chaco to Brazilian, Chilean and Argentinian ports. The government wants to develop the Chaco, but there are fears this will come at the expense of accelerating land conversion, plunging biodiversity and soaring carbon emissions. What’s alarming, from an environmental standpoint, is the low level of protection provided by the Paraguayan state for Gran Chaco’s unique dry forests. There are forest laws. But rural properties larger than 20 hectares are only required to protect (or restore) 25% of the forest that was present in 1986, along with some tree buffers for pasture and riparian areas. Many farmers simply ignore the regulations, encouraged by what a recent IUCN report described as “the notorious lack of political will on the part of the national authorities to enforce the laws”. What is the private sector doing to ameliorate the situation? According to TRASE, a “data-driven transparency initiative” that’s mapping the supply chains of commodities driving deforestation, none of Paraguay’s beef exports in 2019 were covered by a zero-deforestation commitment. TRASE says “the deforestation risk of Paraguayan beef exports from the Paraguayan Chaco (dry and humid) is disproportionately high, even when compared to hotspots of risk in Brazil”.
▲Cattle, South America. © 2021 Alliance Bioversity International & CIAT/ Juan Pablo Marin García
Of Paraguay’s 378,000 tonnes of beef exports in 2019, Russia consumed 36% and Chile 31%, followed by Israel, Brazil and Taiwan consuming 19% between them. Apart from Chile, which has not yet publicly pressured Paraguay on this issue, none of the country’s main beef importers are signatories to the New York Declaration on Forests. “The beef industry in Paraguay has so far escaped the kind of scrutiny the industry has attracted elsewhere, and especially in the Brazilian Amazon”, concludes TRASE.
The luxury leather industry may also have a case to answer. A September 2020 report by the NGO Earthsight identified cattle ranches that have illegally cleared forest inhabited by the Indigenous Ayoreo Totobiegosode people. Earthsight investigators – who received funding from the UK Government for their research – tracked down the slaughterhouses buying cattle from these ranches in the Paraguay Chaco and traced the supply chain supplying hides through to Europe’s largest tanneries in Italy. Some of the world’s best-known luxury car brands source their leather from these tanneries, yet Earthsight’s survey found that “not a single car firm was able to trace all of its leather back to ranch”.
▲ More effective tracing is needed in the beef industry. © Tommaso Protti / Greenpeace
…not a single car firm was able to trace all of its leather back to the ranch
There are, however, some green shoots of hope. Mapbiomas – a regional initiative with major international backers including the Gordon and Betty Moore Foundation – has created maps tracking the evolution of land use and land cover in the Paraguayan Chaco from 2000 to 2021. The EU is approving 30 million Euros to promote sustainable activities in the northern Chaco even though the bloc only buys 2% of Paraguay’s beef exports. The Amsterdam Declaration Partnership (ADP) – supported by nine European countries – is working with the Paraguayan government as part of ADP’s wider ambition to achieve deforestation-free sustainable commodities. And then there is the Paraguayan Roundtable for Sustainable Beef (MPCS), which says it “incorporates 7,000 livestock producers…[and]… 10 slaughterhouses that export 100% of Paraguayan beef exports.” As ever, the solution comes down to hard cash. “Landowners are expecting incentives to preserve their forests,” says Víctor Vera, Paraguay Coordinator for the Tropical Forest Alliance. As the Chaco is a dry forest, it needs a very specific approach to beef production. You must use water very efficiently, as the Chaco receives one quarter the amount of rainfall that the east of Paraguay receives. And you need to create a specific kind of pasture that can survive the dry conditions, with a “green wall” of native forest planted around the pasture. But all this takes investment. “We need to move forest conservation in the Paraguayan Chaco into the international carbon market”, advises Vera. Payment for Ecosystem Services (PES) schemes are also an option, but to date they have paid out far less than could be earned through conversion to beef or soy. For now the producers are just trying to make a living. Vera says that they all say the same thing: “What is the incentive for me to leave the forest standing? I have to eat and I have to produce. What are you going to give me in exchange for that?”
▲ Herd grazing in Chaco central, Paraguay. © Andrea Ferreira
Landowners are expecting incentives to preserve their forests
▲ Laguna Capitan, Chaco central, Paraguay. © Andrea Ferreira
The Tropical Forest Alliance (TFA) launched its Gran Chaco Programme in Paraguay in September 2021, with the aim of promoting the development of the country’s meat and soy sectors in a way that supports livelihoods and protects standing forests. “We don’t seek to limit industry and production, rather the opposite: we want productive development and forests at the same time”, says Víctor Vera, TFA’s Paraguay coordinator. “It is possible to expand those degraded areas or those that currently do not have a high value, generating sustainable development”, he adds. In partnership with the UN Environment Programme (UNEP) and The Nature Conservancy, TFA has backed a major new initiative to generate concessionary finance to support deforestation and conversion-free beef and soy in the region. Known as Innovative Finance for the Amazon, Cerrado and Chaco (IFACC), the initiative is targeting $10 billion of commitments by 2025 to help farmers invest in the sustainable intensification of existing pasture to meet future demand for beef, soy, leather and other agricultural products without further conversion of natural habitats.
We don’t seek to limit industry and production, rather the opposite: we want productive development and forests at the same time
Building cross-sector collaboration is at the heart of TFA’s approach, which engages with local NGOs, government departments, global organizations and forest owners – whether they are Paraguayan businesses, indigenous communities or international companies. Priorities for TFA include developing more efficient traceability systems and promoting incentives for producers to preserve the forests under their ownership. TFA contributes to the work of FOLUR Paraguay, an initiative financed by the Global Environment Fund (GEF) to boost sustainability practices across soybean and beef value chains. Led by UNEP, the FOLUR project notes that despite many existing legal and policy frameworks that aim to protect forests, the expansion of commodities driven by favourable market conditions continues to drive land degradation and deforestation, especially “in the Chaco region where deforestation rates have increased substantially to 255,000 hectares a year”. It is clear that market-based solutions are urgently needed to tackle the expanding impact of commodities on Paraguay’s forests and soils. The government’s national forest strategy acknowledges that insufficient incentives for forest conservation are one of the main factors driving deforestation across Paraguay. To help address the issue, the Ministry of the Environment and
Sustainable Development has spearheaded the creation of the Paraguayan Public-Private Alliance for Sustainable Finance, to promote the development of sustainable agriculture projects that could generate carbon credits on international markets. The alliance is supported by, among others, TFA, WWF Paraguay, IFACC and the UK Embassy in Paraguay. In a sign that the initiative is gaining traction, the Central Bank of Paraguay has recently assumed the alliance’s rotating presidency and aims to use the platform to highlight the economic relevance of developing the country’s commodities in a sustainable way. Running through all TFA’s work, however, is the need to balance economic, social and environmental priorities, taking into account the nutritional needs and livelihoods of all people involved in the production process. Víctor Vera puts it this way: “We seek to promote access for forest owners to economic incentives, such as carbon projects and payments for environmental services that give value to forests and at the same time benefit and encourage Paraguayan producers – we must let them know that their businesses will continue to be profitable.”
Watering plants. © Almani ►
