The key to making conservation successful is making it profitable. John Carter may hold that key.
Since the early 1970s, environmental groups have spent billions of dollars on conservation efforts in the Amazon, but have failed to slow the destruction of its rainforests – the Brazilian Amazon has lost more than 700,000 square kilometers (270,000 square miles) of forest in that time. As donor dollars poured into the region, deforestation rates continued to climb, peaking at 73,785 square kilometers (28,488 sq mi) of forest loss between 2002 and 2004, before falling sharply in 2005 and 2006 due to declining commodity prices. To many, it's become apparent that the market, not conservation measures, will determine the fate of the Amazon.
The reasons for land-clearing in the Amazon are compelling: cheap land, low labor costs, and booming demand for commodities driven by a surging China and growing interest in biofuels. These factors have helped Brazil become an agricultural superpower – the world's largest exporter of beef, cotton, and sugar, among other products – in less than a generation. Amazon landowners have seen their land values double every 4-5 years in areas that just a decade ago were pristine rainforests. The market is driving deforestation.
John Cain Carter with his Xavante Indian neighbor Given this landscape, John Cain Carter believes the only way to save the Amazon is through the market. Carter is a Texas rancher who moved to the heart of the Amazon 11 years ago with his Brazilian wife, Kika, and founded what is perhaps the most innovative organization working in the Amazon, Aliança da Terra. Carter says that by giving producers incentives to reduce their impact on the forest, the market can succeed where conservation efforts have failed.
While deforestation rates in the Amazon have accelerated, the problem is not a lack of laws, but rather a legal system where enforcement is so slow and so corrupt that it renders the laws effectively useless. On paper, cattle ranching in the Amazon may be the most restricted in the world, with landowners required to keep 80 percent of their land forested – a limitation no rancher in Texas faces. Carter wants to see farmers in Brazil benefit in following the law, by turning this restriction into a marketing advantage. However in order to do so, Amazon producers have to ensure that consumers ( i.e., buyers of commodities like McDonalds, Wal-Mart, and Cargill) can confidently say that agricultural products are produced legally and even more sustainably than stipulated by the law. The incentive for producers is market access: Aliança da Terra helps Brazilian farmers and ranchers get the best price for their products, but only if they follow the rules. While producers get higher prices for their goods, buyers like Burger King and Archer-Daniels Midland can say they are using legally and responsibly produced beef. Meanwhile more rainforest is left standing, ecosystem services preserved, and biodiversity conserved. Everybody wins.
Accountability has other benefits. Aliança da Terra's growing clout even helps fight corruption – officials know they can't solicit bribes from Aliança's members while members know that passing bribes will only get them kicked out of the system. The promise of Aliança da Terra is so great that conservation groups and landowners are sitting down at the same table, when just two years ago they were the most bitter of adversaries – a substantial achievement and one that bodes well for the success of these efforts.
What is most remarkable about Aliança's system is that it has the potential to be applied to any commodity anywhere in the world. That means palm oil in Borneo could be certified just as easily as sugar cane in Brazil or sheep in New Zealand. By addressing the supply chain, tracing agricultural products back to the specific fields where they were produced, the system offers perhaps the best market-based solution to combating deforestation. Combining these mechanisms with large-scale land conservation and scientific research offers what may be the best hope for saving the Amazon.
In a June interview with mongabay.com Carter explains his experiences in Brazil and his approach to saving Earth's largest and most important rainforest.
INTERVIEW WITH JOHN CAIN CARTER OF ALIANÇA DA TERRA
Mongabay: You were born in Texas, so how did you come to be involved in agriculture in the heart of Brazil? How long have you been ranching in South America?
Carter with his Cessna in Mato Grosso. Image taken by Woods Hole Research Center scientists the day a section of Carter's forest burned due to "bad" neighbors.
Carter:I'm originally from San Antonio, Texas, but after college I was in the service and then did a graduate ranch business management degree at Texas Christian University in Fort Worth, Texas. Basically this was an MBA program for cattle production. While I was there I met my future wife who happened to be Brazilian. To make a long story short we got married and moved down to Mato Grosso, a state in the Brazilian Amazon. We've now lived there for 11 years.
Mongabay: So it sounds like for an American farmer you were ahead of the curve in terms of seeing the potential for agriculture in Brazil.
Carter:I suppose you could say that. When we moved down here there were no Americans here. It was, and in many ways still is, very much a frontier area. The interest in agriculture here has really just taken off in the last 3-4 years and there were no Americans here until very recently.
Mongabay: Do you think growing interest in biofuels and rising demand from China are driving this change?
Carter:I think interest certainly increasing because of these factors, though soybeans were already getting big here before the biodiesel craze, mostly because the cost of production is so much lower here. A couple of years ago you saw a lot of concern among U.S. producers of beef and soy that Brazil was going to outproduce the United States in production from this point forward. The climate, the amount of open land, the lack of freezes, and higher yields all make agriculture here very attractive. Foresighted people could see that it wasn't going to take a lot for Brazil to get its feet under its legs. Sure enough, Brazil is now the leading exporter of beef, cotton, sugar, orange juice, coffee, and cacao. It's second in soybeans, but not for long. The country has become an agricultural powerhouse.
Mongabay: Can you describe the sort of environment where you have your ranch? Is it former rainforest, surrounded by rainforest, or cerrado grassland habitat?
Carter: When I first came to the ranch is was 60 percent forest and 40 percent pasture. Most of the forest was secondary forest that had been previously deforested but had regrown. The ranch is located in the southeast Amazon forest--the so-called transition forest in northeastern Mato Grosso. Most of that region was forest but I've witnessed the vast majority of that area cleared over the past 10 years. It's been very fast-paced progress with the frontier rapidly moving across the Amazon. Just a short time ago we had wilderness, but now we have Cargill at our back door.
Mongabay: What about the laws that require ranchers to keep a portion of their land forested? Has this not slowed deforestation?
Soy expansion in the Brazilian Amazon, 1990-2005
Total deforestation and area of soybean cultivation across states in the Brazilian Amazon. Overall soybean cultivation makes up only a small portion of deforestation, though its role is accelerating. Further, soybean expansion and the associated infrastructure development and farmer displacement is driving deforestation by other actors. Note: some soybean farms are established on already degraded rainforest lands and neighboring cerrado ecosystems. Therefore it would be inappropriate to assume the area of soybean planting represents its actual role in deforestation. Carter:Yes, since I arrived here there's been a forest reserve law in place. Actually in 1998 they raised it from 50 percent of your land kept as forest to 80 percent. That provision really backfired for the environmental movement. The law was already contested at 50 percent. Raising it to 80 percent just created a mass hysteria and a state of civil disobedience where landowners said "to heck with this" and just tore down everything.
The fact is, most people never respected the 50 percent requirement in the first place. For the most part, they just classified rainforest as cerrado so they could clear more land.
The problem stems a system that is essentially a corrupt, black market. The agencies that control the permits and law enforcement are on the take, so it basically is just a bribery process. While this has changed a little bit in the past couple years, there's still a lot of funny business. For example, the big story in the paper yesterday was a sting where they busted a whole ring of illegal loggers. A bunch of these guys worked for the environmental protected agency and the parks and wildlife agencies.
Deforestation in Mato Grosso State, Brazil, 1988-2005
There is very much a frontier mentality here. The return on land appreciation is so great and the justice system so slow, that by the time you catch a landowner, he's already sold the land and made a fortune. There's no real incentive for people not to do it and they could really care less what an American, Frenchman, Dutchman, or anybody else in the international community thinks because there are no repercussions for their actions. That's one reason why we started this program--we're using fire to fight fire by using market access as a carrot to encourage people to do the right thing. We're providing economic incentives and people want to be a part of it.
Mongabay: Sounds like a difficult situation. What kind of land appreciation are we talking here?
Expanding Deforestation in Mato Grosso, Brazil
This pair of images shows large clearings made in the Amazon Rainforest in the state of Mato Grosso, Brazil, between 2001 and 2006. NASA images by Robert Simmon, based on data provided by the NASA /GSFC /METI/ ERSDAC/ JAROS, and U.S./Japan
Carter:In our region you can pretty much expect 7-15 percent annually and that's a pretty conservative estimate. In 1999-2000 our land was valued around 150 reais per acre. Our neighbor just sold his land for 833 reais per acre. So that's more than a five-fold increase in seven to eight years. The returns can be higher depending on whether you buy forest, regrowth, or open area. The real play down here in on land appreciation, not the commodity you are producing. I don't think most people understand that. Most people come here looking at figures on crop production and yields. I think it still has a long way to go since Brazilian institutions are getting stronger and you're going to see institutional investors start pumping in money which will further drive land prices. The ethanol and biodiesel trend is pushing up prices as well.
Forest land is by far the cheapest but with all the pressure on the Amazon today. people who have a lot of exposure really tend to shy away from forest, because they don't want to be caught in the spotlight and put in the paper. If they stay within the law, they are fine, but most people don't do that. Most multinational corporations today wouldn't touch forest land with a 10-foot pole due to the negative press. Most people are looking for cerrado lands that have already been cleared so they don't have to do the crime. That leaves forest demolition mostly to investors who don't really care about public opinion. A lot of time they are dealing with land that has no title or title problems or land invaders. That's where the real opportunity comes. They go in there, get it for cheap, fix it up, and try to get their title in order before they sell for a hefty return.
Mongabay: Is there any record? Is there a way to prove forest was there a year ago?
Carter:Yes, they can prove you tore down forest in the past two weeks using satellite imagery or the state monitoring system but the problem is the corruption and payoffs that ruin the system. Fine are rarely collected, but bribes are common. If they wanted to, they could enforce the law immediately. Actually, prosecution is happening more these days. I think international pressure is a factor.
Brazil's satellite monitoring system is one of the best in the world. If needed, you can tell if someone deforested their land 15 years ago. For my old property, I can get annual satellite imagery from 1979 to the present.
Mongabay: Why did you get involved? Why do you care about the sustainability of ranching in the Amazon?
Carter:My first visit here was in 1993. My wife's dad had a ranch and was helping him look for some more land. I drove up with him to a small town on the edge to the cerrado and forest. The dirt road took us through the forest of the southern Amazon. On the way, I saw a Xavante Indian walking naked along the road with a bow and arrow in his hand and a black jaguar in the highway. I knew this is where I want to be so I moved here.
Carter's plane over Mato Grosso
View from Carter's airplane window during the burning season
When the smoke clears, it is not a pretty site
I flew down from the U.S. as a pilot and moved to this property. Since the infrastructure here was terrible, we usually got around by airplane which gave me a really good perspective of the scale of what was going on down here. We lived on the frontier in the truest sense of the world. For five years we had no electricity, no telephone and no neighbors. We got a real dose of what's happening. I don't think many people have experienced this firsthand--certainly the environmental groups haven't. Their perspective is from 10,000 feet or from their air-conditioned offices in Washington, D.C. Sure they pop in by parachute every now and again, but they don't live here and sense what's really happening. We lived this kind of lifestyle for over ten years. We saw the corruption firsthand. We, like everyone else, would hear loggers on the shortwave radios warning of a proposed IBAMA (Brazil's environmental protection agency) raid. Sure enough the loggers would have bribes in hand, waiting for IBAMA to arrive. At one point there were more than 100 unlicensed saw mills in the area, though now there are none -- there's little harvestable forest left.
I saw this on a day-to-day basis as I flew. I've now flown probably somewhere between 700,000 and 800,000 kilometers in the state and seen what seems like the whole thing deforested in 12 years. On the ground it can be even worse. Our neighbor one time tore down 12,000 acres of forest in three months. We couldn't see for about 4 weeks when he burned the residual--the smoke was so thick. During the burning season in the Amazon it's like this all over. You can't describe it unless you've been there and seen it. You can't see the sun at mid day and have to drive with your headlights on. It was terrible.
It was clear that environmental groups hadn't had much of an effect in slowing deforestation. They've been effective at making the world aware of the problem but they have never come up with a real solution to the problem. The slowing of deforestation the past couple years was not due to their efforts as the minister of the environment likes to claim, it was the market. People went broke and no one had money to invest in deforesting. Landowners only clear forest when they have extra money in their account--they do it out of their own cash flow and private equity, they don't use loans.
Acquired by the Moderate Resolution Imaging Spectroradiometer (MODIS) on June 30, 2003, this image shows a portion of the Brazilian state of Mato Grosso. Intact forest is dark green, while cleared land is tan or reddish-brown. Mato Grosso is located on the southern edge of the Amazon, east of Bolivia. Image courtesy Jacques Descloitres, MODIS Land Rapid Response Team at NASA GSFC
In the Mato Grosso region of Brazil, fire (red dots) is a major cause of deforestation. "Slash and burn" agriculture is used to clear tropical forests for farming and ranching, and this series of Moderate Resolution Imaging Spectroradiometer (MODIS) images shows the resulting transformation of the landscape. Lines and geometric shapes reveal where plots of land have been converted to agricultural uses. In many of the images, the Xingu National Park hangs like an appendage off the broad expanse of Amazon rainforest to its north. Credit Jacques Descloitres, MODIS Rapid Response Team, NASA/GSFC
Anyway since the environmental moment was not accomplishing much of anything with the hundreds of millions they spent a year to try to stop it, my wife and I decided to try. We were pretty disillusioned with the environmentalists because they never seemed to confront the problem: economics. They were always trying to create a villain to blame and a colorful bird or mammal to save. As landowners we could see opportunities that the environmental movement had missed.
My wife and I decided that amongst other things, including all the violence in the region which, on occasion, impacted us personally, we weren't going to stay in the area unless something was done to change it. We could not continue to sit and witness this rape without at least trying something.
So that's how we started the idea. We went on all the wrong trails and all the naive roads that people seem to take. We banged our heads against the wall and realized there was no way to stop it--the momentum is just too great. The one thing we could do was try to minimize the collateral damage by creating incentives for people to at least maintain forest in riparian zones and as corridors between properties. If we got that done, we would accomplish more than anyone had done in the whole history of the Amazon. So that's where we concentrated our efforts. We lowered the bar enough so that we knew landowners would jump if they had a small incentive. The carrot is market acceptance for their products. We believed at least 30 to 40 percent of the forest in the Xingu region could maintained in a pilot project. We'd then aim to expand the program to frontier regions.
Mongabay: How does Aliança da Terra work?
Carter:Aliança da Terra is based on the concept of market acceptance for sustainable agricultural production in the Brazilian Amazon. We're presently focused on beef, which is the largest driver of deforestation in the Amazon, though we're also working with other products including soy. Aliança da Terra is doing the necessary field work first to prepare for an all out attack on the markets, demanding recognition of the ecosystem services being provided by private land owners through market access. This gives a tangible incentive to farmers and ranchers who farm in a responsible manner and obey good land stewardship practices as well as the forest code and excludes those who don't. Our reasoning is that this land is going to be deforested regardless of the law or public sentiment if some immediate, tangible economic incentives are not installed asap. The soy boycott by Greenpeace was a sign of how globalization can touch conservation. It helped to prep the battlefield for us, showing that the world is starting to pay attention to how food stuffs are produced. But, the flip side to that is that the world needs to work with producers as well as make adjustments along the supply chain on how margins are distributed. Now it is not a fair and equitable distribution, more should trickle down to the producer/land owner as he is the one with the conservation burden/ecosystem service on his back. This needs to be itemized on the balance sheet!
Landowner with Aliança da Terra staff
We're setting up an accrediting mechanism that will help responsible landowners gain access to markets and get the best price for their products. The timing for this is perfect with international pressure forcing landowners to face these issues head on. The landowners like our system because they have a say in the creation of standards and a vested interest in making it economically viable. Getting landowners on board was key. We knew there would be huge repercussions if people thought there's just another non-profit coming in and we also built it to be Brazilian and not a foreign entity. Other than myself everyone here is Brazilian.
We've built an accrediting mechanism that allows consumers to use their purchasing power to select between environmentally responsible producers and environmentally irresponsible producers. By doing this, we've effectively created an incentive for producers here to do the right thing.
Mongabay: Does this mean you are seeing "pull" from consumers who are asking for certified products?
Carter:That's a tricky question. With mounting worries about global warming reflected in Al Gore's movie, there's no doubt the world is more concerned principally with what's happening in the Amazon. The international community sees where we are going to be in 100 years, and it's not a pretty picture. In even the best case scenario, we're still kind of in trouble, while under the worst case, we're toast. In the best case scenario we still need to take action. This outlook gives us enormous room to work and a wide range of options. Environmental groups and the international community have basically prepped the battlefield for us, so the world is prepared for what we're creating. It is already looking for solutions like this.
This pie chart is based on the median figures for estimate ranges. Please note the low estimate for large-scale agriculture. Between 2000-2005 soybean cultivation resulted in a small overall percentage of direct deforestation.
Nevertheless the role of soy is quite significant in the Amazon, displacing small landholders who then clear virgin forest areas. Further, according to Philip Fearnside, a leading Amazon expert, soybean farming also provides "key economic and political impetus for new highways and infrastructure projects, which accelerate deforestation by other actors."
For the most part, the consumer always wants to buy the cheapest product on the shelf. If someone is willing to pay a premium because of conservation, it's called a niche market. Niche markets will never stop the deforestation of the Amazon. We have to hit the commodity markets and spread the benefits across the whole region, not just a niche sector. To do this, we can't raise the price of the commodities--people simply haven't shown a willingness to pay more for these products on a consistent basis.
Under our system, the only benefit a producer will get is market access, but by gaining access to the European, American, and other foreign markets, local producers will benefit significantly. Instead of having prices based on the Brazilian Bolsa, they will be getting Chicago mercantile rates which are inherently higher, less freight and trade tariffs. The only way producers have this access is by following the rules. We are essentially creating a hurdle that's effective for conservation and low enough to be attractive, but that allows you to jump to that higher price and even get bargaining power with slaughter plants and the big grain brokers like Cargill, Bungee, and ADM [Archer Daniels Midland]. Currently the big guys have the leverage. The real reward is going to come from money that already exists in the system but is currently staying in the pockets of the big guys. We're trying to reach critical mass of volume that we have market leverage. We are absolutely convinced that once this happens, and you have two products, one with credibility and transparency and the other with a questionable origin, people will choose the option with legitimacy.
An added benefit for producers is that our system reduces the risk of a moratorium on Brazilian products. While the EU may slap a beef or soybean on Brazilian agriculture, certified products would stand a better chance of escaping sanctions.
Mongabay: So you are offering a path to markets?
Carter: Exactly. We offer a ticket to the market. We also look for other financial incentives for producers that participate. For instance, cheap money through loans used to reforest their riparian zones, lower interest rates, and financing for production. Most of the big investment banks are looking for prerequisites before they lend money and it appears some of them will be adopting our policies. We're trying to facilitate two bottlenecks in the beef industry: when you want to get money and when you try to sell. We're not saying you're going to get paid more for your product, but you'll get a pathway to the market, which in and of itself, is more lucrative because they are going to be getting prices based on the Chicago Mercantile rather than the local market.
Credit Aliança da Terra
We have the largest livestock association in the world on board, the Associação Brasileira dos Criadores de Zebu [the Brazilian Zebu Cattle Raisers Association] (ABCZ) involved. It's a registered breeders association, the most prestigious in Brazil, with 16,000 ranchers. They are going to start requiring their members to participate, using Aliança criteria on their property. It's similar to a land registry. We started a pilot project in Xingu and Mato Grosso and we're planning to expand it to the whole country. Within 2-3 years we'll be in ten states. It's extremely exciting -- we're doing just as we hoped.
Mongabay: So ranchers are enthusiastic about the project because of the legitimacy and financial inventive? That is, you're not dragging them on board kicking and screaming?
Carter: To be honest, we were a little hesitant at the start, thinking that we were going to have trouble signing them up. We feared negative feedback, but from the start people were very enthusiastic. They told us, "This is exactly what we need. We're tired of being branded as bandits." Now we've gotten a huge resounding applause from the sector.
Being a landowner here is complicated. When you live in this region, you see the corruption. People involved in the take are supposed to be protecting the forest so it's no wonder that you get the state of civil disobedience among landowners. There's no real honest leadership to set an example. So when we come in and offer them a path of least resistance to the right thing as well as hanging market incentives, landowners jump at it.
Settler participant with Aliança da Terra. Credit Aliança da Terra
We want market recognition for shouldering this conservation burden. Where else in the world do you have landowners who have to keep 50 percent of their land forest? Nowhere. If the consumer is supposed to benefit people for doing that then you tip the scales back in favor of the landowner and its going to create more positive feedback for people to follow the rules by maintaining the forest. As it is right now there's nothing to keep forest standing because the law doesn't catch you in time and you can always bribe your way out of it if you do get caught. You might as well tear it all down since the your land value shoots up and you can also produce a lot more product on your property. You're more profitable. When you look at the numbers it doesn't take 5 minutes to understand why its all coming down.
We're trying to turn this forest reserve law from a negative into a positive, or make lemonade out of lemons, so to speak. People think farmers in the Amazon are bandits so we're trying to show there are good people who are trying to make a difference and reduce their impact. Working with some magazines to make it more meaningful, we're going to have a landowners award ceremony every year where we recognize the best land steward. No one's ever patted these guys on the back or even shown them how to do the right thing. All they've told them is no. The officials fine them and extort them, often at the same time. Meanwhile the whole production system is opaque. For example, the vast majority of beef that's produced in Mato Grosso state is for export but it's hard to pinpoint the origin of the beef. Slaughter plants do a good job of hiding it. We're turning the system on its head, adding transparency and credibility to turn it into a worldwide example of good land stewardship. Producers will be rewarded through market acceptance for taking the extra steps to do the right thing. They'll be able to take their product to McDonalds, Burger King, and other firms worried about reputations. All the big multinationals want credibility these days in regards to the environment and sustainability.
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