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Brazil to Fight Deforestation With New Cattle-Tracking System

Carlos Favaro Photographer: Ton Molina/Bloomberg (Ton Molina/Photographer: Ton Molina/Bloombe)

(Bloomberg) -- Brazil is pressing ahead with plans to track its cattle herds as the world’s largest beef producer contends with international pressure to prevent deforestation caused by commodity production.

The government is working with the private sector to launch a data platform that will allow meat packers to fully trace their supplies starting in 2027, Agriculture Minister Carlos Fávaro said in an interview at Bloomberg New Economy at B20 in Sao Paulo on Tuesday. That will allow Brazilian beef to be completely traceable by 2032, he said.

Beef production in Brazil has often been associated with degradation of the Amazon, and the new system promises to be the most-significant response to growing international requirements. While companies including JBS SA, Marfrig SA and Minerva SA say they have advanced in monitoring direct suppliers, a government-backed program would allow a more robust tracing of indirect suppliers as well.

“We are not running away from our responsibility,” Fávaro said. “It’s legitimate that people want to know the origin and how the animal that was slaughtered was reared for the consumer to buy, and here we have a plan.”

The move comes just as the European Union proposed delaying the implementation of new rules that would require sellers of commodities including beef, coffee and soybeans to prove their products don’t come from deforested areas. The 12-month delay would give countries including Brazil more time to prepare for it. 

JBS is working on its own cattle traceability system using blockchain technology, which already includes more than 73% of all its cattle suppliers in Brazil, Chief Executive Officer Gilberto Tomazoni told Bloomberg on the sidelines of Bloomberg New Economy at B20 in Sao Paulo on Wednesday. The system already allows the company to meet at least part of Europe’s beef consumption, but the goal is to achieve 100% traceability of the beef it supplies to the European market, Tomazoni said.

The government of President Luiz Inacio Lula da Silva has been one vocal opposer of the EU’s Deforestation Regulation. While the new cattle traceability system would not be ready before the EU legislation comes into force in 2025, Fávaro is confident the bloc will renegotiate some of the terms and that Brazil will have a seat at the table. 

“The issue with this legislation is that it was drafted arbitrarily and unilaterally, breaching the sovereignty of Brazil and other countries,” Fávaro said. “That’s unacceptable.”

Brazil’s point is not to simply delay the legislation, but to show it’s unhappy with the way it was done, and the Europeans understand that, he added.

A cattle-tracking system could put an end to years of stalled efforts to ensure full traceability. In the past, ranchers have fiercely opposed the disclosure of data that includes detailed information on the transit of animals, citing privacy reasons.

Brazil has also been strengthening its relationship with other countries in Asia, Africa and the Middle East, which don’t have the same requirements as Europe, Fávaro said. 

“In this geopolitical bloc we have a lot of people, so a lot of consumption, a lot of money, money from the Middle East, Asian money, money from South America, and this allows us to overcome any kind of embargo or restriction generated under the pretext of the environment,” Fávaro said. “No one can have inflationary stability by giving up on Brazilian food production.”

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(Adds JBS CEO comment in sixth paragraph)

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