Cattle production is the largest driver of tropical forest loss worldwide, with devastating impacts for climate, biodiversity and people.

Paraguay has one of the highest rates of deforestation in the world, largely due to the rapid expansion of cattle ranching, especially in the western Gran Chaco region — a highly biodiverse and sparsely populated dry forest ecosystem.

Experts predict that if the current rate of expansion continues in the Chaco, the forest and other native vegetation there could disappear within decades.

As Paraguay considers new global markets into which to expand, and implements a new forest monitoring platform, a new report suggests that the country has a unique opportunity to shift towards large-scale sustainable cattle production, greatly reducing deforestation.

While South American deforestation news has typically been dominated by Brazil’s now rapidly decaying record under President Jair Bolsonaro, the country’s southern neighbor, Paraguay lays claim to one of the highest rates of forest loss in the world.

Between 1987 and 2012, Paraguay obliterated nearly 4.4 million hectares (16,988 square miles) of forest, mainly to expand cattle ranches in the western part of the country — a semiarid region once dominated by dry forest and savanna known as the Gran Chaco biome, which extends from Paraguay into neighboring Bolivia, Argentina and Brazil.

Deforestation there has only escalated since then, driven by international consumer demand for Paraguayan beef and leather. This extraordinary boom prompted the Paraguayan government, ranchers and meat processors to strive aggressively to move into wider — but also more sustainably stringent — markets, such as those found among the environmentally sensitive nations of the European Union.

Responding to this impetus, a new report by the Supply Change Initiative (SCI), lays out the opportunity for the Paraguayan government and private industry to reduce land degradation in the Chaco through implementation of better deforestation monitoring systems to make cattle and associated forest loss more traceable and controllable and ultimately reduce it.

“The Chaco is home to extremely rich biodiversity, and at the same time a huge source of economy and income… The types of investments the government is making [now] signal that [it] is seeing the opportunities in sustainable production,” explains SCI director Stephen Donofrio. The Supply Change Initiative is an initiative of the NGO Forest Trends, that tracks corporate commitments to reducing deforestation related to agricultural commodities production.

Experts acknowledge that there isn’t much time left to act, as the window for conserving the Gran Chaco’s remaining vegetation in Paraguay is rapidly closing.

“The pace of deforestation is moving quickly, and just looking at the spatial analyses of what has happened to date, it is easy to see the phenomenal change,” says Joel Correia, a human geographer and assistant professor in the Center for Latin American Studies at the University of Florida who has studied Paraguay’s forest loss over the last decade. “If deforestation continues at the same pace [in future], the likelihood of maintaining an intact ecosystem [there] is slim to none,” he says.

The Gran Chaco dry forest ecosystem, though assaulted, is still home to more than 3,400 plant and 900 animal species. More than two dozen indigenous peoples also call the Gran Chaco home, including some who still live in voluntary isolation.

A country for cattle

Paraguay’s economy has thrived over the last decade and a half, with GDP rising by nearly 4.5 percent annually between 2004 and 2017. The agricultural sector — specifically cattle — has driven a lot of this growth.

“Cattle are extremely important to the political economy of the country,” notes Correia. “Paraguay is a small country, but a major player in the cattle industry. It has emerged as one of the leading exporters of beef in the world.”

Paraguay ranks among the top 10 beef-exporting countries on Earth. It also exported nearly nine million pounds of leather in 2018 to EU car companies including BMW, Citroën, Peugeot, Renault, Porsche and Ferrari — manufacturers that utilize leather from the Chaco for their car interiors.

But those plush luxury auto seats come at a high cost to nature. The region is seeing among the world’s fastest deforestation rates, with the entire biome losing nearly 250,000 hectares (617,764 acres) of forest cover annually between 2001 and 2014.

Cattle expansion into the Chaco shows no sign of slowing, with the Paraguayan government aiming to ramp up production. According to the SCI report, the country’s beef industry still primarily exports cattle products to markets in developing nations that don’t have stringent environmental and traceability import regulations, but is looking at expanding into markets like the U.S., Singapore, and Canada, that have stricter traceability standards.

“There is a lot of demand out there that isn’t implementing the same standards,” says Donofrio. “The demand has to be there and the traceability for that demand needs to be increased.”

Challenges and opportunities

According to the report at least 56 major companies with $26.3 billion in annual revenues have pledged to reduce or eliminate forest loss in their global cattle supply chains — that’s a big market that Paraguay could tap into if it made a serious deforestation monitoring and reduction commitment.

However, of the 81 companies in Paraguay known to produce and/or procure cattle products like beef, dairy, or leather within the country, only fifteen have made commitments to address deforestation in their cattle supply chains, with only McDonalds and Minerva specifically mentioning Paraguay in their commitment documentation.

“A significant amount of work [needs to be done] to get to the goalpost of zero-deforestation,” says Donofrio. “At this point, it really comes down to how much companies are willing to push their voluntary commitments beyond government requirements.”

But that incentive is currently lacking. Ruth Kimmelshue, the chief sustainability officer of Cargill, one of the world’s largest protein producers, reported earlier this year that not a single company would achieve their supply chain-related deforestation reduction goals laid out for 2020.

“The voluntary commitments to end tropical deforestation by 2020 have failed,” concludes Global Canopy’s Forest 500 annual assessment of the most influential companies and financial institutions in forest-risk supply chain.

In the case of Paraguay, commitments, even if they were made, would remain hard to trace because effective monitoring systems aren’t in place. “You can’t tackle deforestation or habitat loss associated with commodity production if you can’t understand where that commodity is coming from,” concludes Donofrio.

But quality deforestation monitoring systems do exist. They include the voluntary Traceability System of Paraguay (SITRAP), as well as a new forest monitoring system signed by the Paraguay Minister of the Environment last year in partnership with the World Resources Institute (WRI) — an agreement that offers greater transparency including over the cattle industry.

With aggressive implementation, systems like these could greatly reduce the conversion of forests into ranchlands, positioning Paraguay to capitalize on the expanding international sustainable cattle products market, according to SCI.

Paraguay’s new national forest monitoring platform, developed in partnership with WRI, is the first of its kind in South America and will draw on real-time satellite imagery provided by Global Forest Watch and correlated with the boundaries of ranches and locations of meat and leather processing facilities. The system would make it far easier for commodity buyers to trace cattle products in their supply chains and evaluate compliance with forest conservation legislation.

While significant barriers still exist in the country hampering a shift toward more sustainable cattle production — including weak forest protection laws, ongoing corruption and regulations focused on cattle safety rather than deforestation,— Donofrio is cautiously optimistic. “The main message: it isn’t a hopeless situation, it is an opportunity for it to change,” he says. “Paraguay is on the cusp of being able to implement new practices and policies that would avail itself to new markets and [the nation] has the chance to do that sustainably.”

Banner image caption: Cattle continue to be the primary driver of deforestation in the Gran Chaco, as is true in the Amazon and Cerrado biomes, and elsewhere in Latin America. Image © Henrique Manreza courtesy of The Nature Conservancy.