Land Rights, Beef Commodity Chains, and Deforestation Dynamics in the Paraguayan Chaco

Research

Cattle ranching is expanding in the Paraguayan Chaco and has contributed to the degradation and loss of forests and associated ecosystem services there.  Until the late 1880s, much of the Paraguayan Chaco was used by indigenous peoples; they now legally hold just a small fraction of their traditional land. Today, most land in the Paraguayan Chaco is private land, with a significant amount also in large public protected areas. Deforestation rates on private lands are considerably higher than on indigenous lands and lands in the public protected estate. As cattle production expands, the risk of more deforestation on private lands is high. Protecting the land rights of indigenous peoples could help secure their livelihoods and protect forests.

This report provides an assessment of the deforestation and land rights risks to meatpackers sourcing cattle from the Paraguayan Chaco, and identifies some possible approaches to addressing these risks. Given the significant losses over time, particular attention is paid to indigenous lands, including both lands that are now legally held by indigenous peoples and those that are claimed by indigenous peoples but are legally held by private landholders or the state. The Chaco has the greatest diversity of indigenous peoples in Paraguay, including the last uncontacted indigenous persons outside the Amazon. The Chaco covers 24,155 ha (250,000 km2), or about 60 percent of Paraguay’s land area; however, it is home to less than two percent of the country’s population.

Extensive cattle ranching began in Paraguay in the 1960s. Over time, as the population in the Chaco has grown and international beef markets have expanded, previously (locally) powerful, but small-scale cooperative farm groups have transformed into much larger cattle agribusinesses.  Furthermore, in the early 2000s, Brazilian and other foreign ranchers began to buy large tracts of land in the Chaco exclusively for livestock production, particularly because of the low price of land.  The result has meant the transition of the Chaco in the minds of Paraguayans living in the capital or the eastern region from a distant wilderness to a region with significant economic influence, nearly all of which is concentrated in cattle-oriented agribusiness. The expansion of market-oriented agriculture (annual crops and cattle) incentivized enormous forest clearing.

Decades of unrestrained agricultural expansion, often at the expense of tropical and sub-tropical forests has made Paraguay one of the world’s top exporters of soy (ranked fourth) and cattle (fifth). The remaining Atlantic forest has been lost to annual crop production (especially soybeans in a number of departments in the far east of the country), while the also biodiverse Gran Chaco, the second largest forest in Latin America after the Amazon, has been particularly hard-hit, losing nearly three million hectares (7.4 million acres) of forest – mostly to pasture – in the past ten years alone. Having moved through the south of Argentina and east of Paraguay with large-scale soy production and cattle ranching, agribusiness (in particular cattle ranching) has extensively expanded into the Chaco of western Paraguay.

The current pattern of land rights and tenure security in the Paraguayan Chaco has roots in land grants issued by the government in the 19th century. At the time, the Chaco was inhabited principally by indigenous peoples. In 1825, the government issued a decree mandating that all citizens present titles to the lands they occupy. Lands without titles, such as those held and used by indigenous peoples, were declared state property. The decree allowed the government to take “legal” possession of the Chaco, although it did not lead to an immediate occupation or use of this land. This all changed in the late 1800s. To pay for Paraguay’s debt following its defeat in the 1865-70 War of the Triple Alliance with Uruguay, Brazil, and Argentina, the government sold large tracts of land to foreigners, mostly Argentines. These actions concentrated land holdings that are still present today.

Today, more than 95 percent of land in Paraguay is held as private property. In the Chaco, most land is privately owned, principally by individuals, corporations, and cooperatives. Some land is public land, such as land in the protected areas and the lands alongside roads and power lines. While estimates vary, a relatively small amount of land in the Paraguayan Chaco – likely less than five percent – is legally held by indigenous peoples (although they claim considerably more land). There are also a number of smallholder farmers living in the Chaco.

Based on World Resources Institute (WRI) calculations, the Paraguayan Chaco lost an average of 245,746 ha of forest/year between 2001 and 2014, for a total loss of 3,440,441 ha in this 14-year period from 2001-2014. This translates into an annual average deforestation rate of 1.4 percent, resulting in a 14 percent total decline of forest area in the Chaco. These figures are in general agreement with those provided by other researchers. More specifically, public protected areas experienced the lowest annual average rate of average deforestation rate of 0.3 percent/year from 2001-2014 and indigenous lands had an average deforestation rate of 0.6 percent/year. Private lands had the highest average deforestation rate at 1.5 percent/year.

The last decade has seen an enormous shift in the generally accepted standard of agricultural commodity sourcing standards. The global beef and leather industries are, however, arguably the least progressive among the major drivers of tropical deforestation, with neither a globally recognized certification or standard-setting body, and little uptake of basic sourcing criteria or global, time-bound commitments by major multinational players. The Global Roundtable on Sustainable Beef (GRSB) is relatively young and with little influence compared to the other major commodity roundtables (for example around timber, soy and palm oil), and is resistant to any verified certification or standard setting regime. While major grain and vegetable seed oil traders (Wilmar, Cargill, ADM, etc.) have made global commitments, the major meatpacking companies sourcing in the tropics have so far not done so.

As Paraguay’s cattle exports are not primarily to higher value markets (e.g. the United States, European Union [EU], or Japan), there has been little history of promoting progressive criteria for social and environmentally monitored beef production. In general, the respective markets for Paraguay export beef determine the relatively small differences in sourcing criteria, and these correspond to price differences. The European market is both the smallest and most demanding of markets, requiring higher levels of traceability and animal welfare requirements, while Chile also requires documentation of the corral location as part of its requirements. Russia, the leading export destination of Paraguayan beef in most years, imposes very few criteria on imports beyond sanitary controls (such as foot and mouth disease regulations).

Apart from the portion of the market that requires corral coordinates, the present perception of risk and the relatively permissive regulatory environment discourages additional measures to connect supply chains to ranch locations or inquiries into the land tenure of sourcing areas. Investment in geospatial data for day-to-day operations is likewise limited (against the general trend in the agricultural world), and the land use and land ownership history is of little concern for cattle buyers. Disputed titles and indigenous claims and their related controversies tend not to weigh in sales contracts that are more concerned with volume and price.

Recognizing this context, three potential avenues for improvement are provided, including:

  • Leveraging of existing cattle sector initiatives and best practices. Provided that sufficient incentives come into play, especially from major buyers in export markets, collaborative standard setting processes like the Carne Natural (natural beef) initiative and increased transparency of ranch locations and other geospatial data may set the stage for sourcing criteria and monitoring protocols to allow Paraguay to expand and secure its export market destinations. A wide variety of improvements across government agencies and meatpackers would be required, but there is potential to raise standards.
  • Pressure for the private sector to self-regulate. The proactive response of the private sector to a real or expected negative impact on exports and revenue suggests a potential avenue for risk reduction in other realms, namely the potential barriers of export market access that deforestation and violation of indigenous land rights may portend. Efforts by the private sector alone, or through pressure on the government may encourage greater efficiency and implementation of government policy, and even small improvements in data transparency can be helpful to a company seeking to reduce its risk.
  • Data management and transparency by the beef sector and the government of Paraguay. A key element of an effective monitoring system involves data availability: ranch locations, accurate and legally sanctioned land use change data from the National Forestry Institute (Instituto Forestal Nacional, INFONA), comprehensive indigenous community locations and land claims (including those disputed or in process with the government or international legal system), environmental license data from the Secretariat of the Environment (Secretaría del Ambiente, SEAM), and property level data from the national cadaster.