Cattle ranching is a way of life in Brazil. It underpins local economies and provides livelihoods for communities. But it is also damaging critical ecosystems.
The state of Pará, which encompasses 14.6% of Brazil’s land and is home to the country’s second-largest cattle herd of 26 million, faces significant environmental and ecological challenges from illegal deforestation, land conversion, and land grabbing. It is estimated that at least 50% of the cattle in the state are reared on illegally deforested land.
To combat these issues, the State’s Governor introduced the Pará Sustainable Cattle Program at COP28 in December 2023, with support from The Nature Conservancy. The Program mandates an individual cattle traceability system to enhance transparency and foster sustainable development in the State’s cattle industry. Using electronic ear tags, each animal will be tracked throughout its lifecycle, generating vital data for producers, regulators, and traders alike.
This public commitment to full transparency and traceability in Pará’s cattle sector will tackle a critical factor contributing to climate change and habit loss. Tracking cattle throughout the entire supply chain is crucial to ensuring it is raised on deforestation-free land. The benefits of this are hard to overlook. It will bring greater health security by fostering better herd management and healthier animals that produce high-quality beef, access to new markets for producers, increased transparency, economic growth, the reduction of the informal cattle market, as well as improvements in the management of properties.
With a spotlight on Brazil in the leadup to COP30 later this year, which will take place in Pará’s state capital of Belém, the Program offers an opportunity for Brazil to show what is possible and lead by example.
A billion-dollar opportunity for Pará
The Pará Sustainable Cattle Program offers a comprehensive strategy to transform the State’s cattle industry and ensure economic growth is balanced with social and environmental safeguarding.
In collaboration with Bain & Company, The Nature Conservancy analyzed several mechanisms to support and accelerate the adoption of the Program and produced this report. Our analysis shows that the economic and environmental impacts of the Pará Sustainable Cattle Program would be transformative—with the potential to increase the state’s annual cattle production value by up to USD 1 billion within the next three to five years.
With higher-quality, traceable beef fetching premium prices in Brazil, this offers potential gains of up to USD $160 million on the domestic market, and up to a further USD $230 million could be achieved through exports. Cutting illegal activity could grow the official, licensed markets by an additional USD $330 million, and sustainable practices that boost productivity could add up to USD $224 million.
Beyond the economics, the Program offers significant environmental benefit by reducing illegal deforestation and restoring degraded lands. It seeks to bring all cattle ranching properties within Pará into compliance with Brazil’s Forest Code – a set of regulations that govern the use and conservation of forests and other natural resources in Brazil.
This simultaneously tackles two major challenges for the sector. Firstly, by improving environmental compliance, and therefore legal security for producers, it creates a foundation for long-term economic growth in Pará with the necessary safeguards to protect its unique ecosystems. Secondly, it provides financial incentives to small producers, who account for 90% of Pará’s cattle ranchers, making sustainable practices more accessible, equitable, and tenable moving forward.
Making the Pará Sustainable Cattle Program a success
Through decades of work in Brazil, we know that major producers tend to adopt traceability more easily. Small producers and those on illegal deforested properties (which account for 40% of the herd in Pará) face greater barriers, mainly due to the high cost of environmental compliance and the fear of losing access to the formal market.
The success of the Program depends on producer incentives. These interventions can improve animal health and welfare, product quality, and sustainability—positively impacting the product’s final value. Incentives can be financial, through public policies, market mechanisms, and philanthropic-led programs, or non-financial, such as technical assistance, environmental compliance for commercial requalification, and other forms of producer outreach.
Ultimately, producers can’t make changes that don’t make economic sense. Access to capital is a significant barrier for producers and smallholders, so financing solutions such as rural credit programs, where tracked cattle can serve as collateral for rural credit and allow producers to secure loans at favorable rates, and specialized loans for compliance-related expenses, are important levers for enabling the transition.
Direct payments to producers (e.g. bonuses) are already used around the world and have proven effective in Mato Grosso do Sul, Brazil, where they have boosted productivity. These mechanisms can encourage adherence to traceability, improve the quality of meat and leather, and ensure compliance with socio-environmental requirements.
With more than 11 million head of cattle currently raised on non-compliant properties in Pará, it is crucial that the Program is made accessible to these producers and support is accelerated. Many properties in Pará violate the Forest Code by operating on illegally deforested land. To address this critical issue, the program is providing vital support to producers, including technical assistance for creating recovery plans (PRADAs) and financial incentives to offset the high costs of establishing protected areas. The state of Pará initiated cattle tagging in September 2024, and local stakeholders are collaborating to ensure a successful rollout of the full program.
2025 is a critical year for Brazil to lead the way on climate
Whilst addressing ongoing issues is important, a long-term solution to prevent future non-compliance is vital. The Program supports proactive monitoring of deforestation using advanced software, building producers' capacity for sustainable ranching practices, and establishing transparent and simplified compliance standards moving forward.
As the world turns its attention to Brazil in the lead up to this year’s COP30, now is the moment for the industry, policymakers, and producers to come together and ensure the Pará Sustainable Cattle Program is a success. It is vital that we do all we can to support its full deployment.
Report
The full report, co-authored by Bain & Company and The Nature Conservancy, was published on January 20, 2025.
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