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The Escalating Fires in Brazil: An Environmental, Economic and Political Crisis

Date: Tuesday, 24 September 2024


Authors:  Adriana Ribas

Country: Brazil


Source: Joedson Alves/Agência Brasil


SUMMARY


In recent years, Brazil has witnessed a dramatic increase in wildfires, especially in its vital ecosystems like the Amazon rainforest and the Pantanal wetlands. These fires have drawn international concern due to their significant impact on biodiversity and climate change. However, this environmental catastrophe is closely tied to Brazil’s powerful agribusiness sector, which plays a crucial role in the country’s economy. Understanding the causes of these fires requires an in-depth look at the country's economic landscape, the role of the Bancada Ruralista (Rural Caucus) in Congress, and the difficulties in enforcing laws to curb illegal activities.


This article also delves into how implementing Environmental, Social, and Governance (ESG) practices in agribusiness can mitigate the effects of climate change within the food value chain and supply chains. Additionally, it explores the alignment of these practices with the Sustainable Development Goals (SDGs), especially SDG 2 (Zero Hunger) and SDG 12 (Responsible Consumption and Production).

 

BACKGROUND


The Escalating Crisis: Wildfires in Brazil


Brazil has seen a sharp increase in wildfires over the past few years. In 2019, Brazil’s National Institute for Space Research (INPE) recorded an 84% increase in fires, compared to 2018 . Fires surged again in 2020 and 2021, devastating large parts of the Amazon rainforest, with more than 75,000 fires detected in the Amazon by 2022. Much of this fire activity is closely linked to illegal land-clearing for agriculture, exacerbated by weak enforcement of environmental laws.


Most of these fires are human-induced, often set intentionally to clear land for agricultural purposes such as cattle ranching and soybean production, two pillars of Brazil’s agribusiness sector . Illegal deforestation, followed by intentional burning, is a common practice used to convert forest into agricultural land. Climate change compounds this issue, as the Amazon experiences increasingly erratic rainfall and higher temperatures, both of which intensify the spread of fires.


Agribusiness: The Economic Driver Behind the Fires


Agribusiness plays a pivotal role in Brazil’s economy, contributing 26.5% to the country’s GDP and accounting for a significant share of exports, including soybeans, beef, and poultry. In 2020, Brazil’s agribusiness exports reached $100 billion, driven by global demand, particularly from China, Europe, and the United States .


Brazil is the world’s largest exporter of soybeans, and approximately 50% of global soy exports come from the country . This growth, however, has come at the expense of the Amazon and Cerrado regions, where vast tracts of land are cleared for monoculture plantations and cattle ranching. Deforestation linked to cattle ranching is another major contributor to environmental degradation, as Brazil’s 200 million cattle require extensive pastureland, much of it created by clearing forests.


The expansion of agribusiness into previously forested areas has accelerated deforestation and exacerbated fire activity. As agribusiness interests continue to drive the push for land, both legal and illegal land-grabbing have become increasingly common. Land-grabbers and illegal loggers clear forests for agriculture, while enforcement agencies struggle to curb these activities due to a lack of funding and political support.


The Bancada Ruralista: Power and Influence in Congress


The Bancada Ruralista is a powerful political force in Brazil, representing the interests of the agribusiness sector. Composed of senators and deputies, this caucus has historically pushed for legislation that prioritizes agricultural expansion over environmental protection. In 2012, they were instrumental in revising Brazil’s Forest Code, which granted amnesty to landowners who had illegally cleared forests before 2008, effectively legalizing much deforestation. The group continues to advocate for policies that weaken environmental regulations, including pushing for the opening of Indigenous lands for agricultural use.


The influence of the Bancada Ruralista has been particularly evident during the Jair Bolsonaro administration, which rolled back many environmental protections. Under their pressure, fines for illegal deforestation dropped sharply, and funding for agencies like IBAMA and ICMBio, tasked with enforcing environmental laws, was significantly cut. This political climate has emboldened illegal land clearing and fires, with little fear of retribution.


Driven primarily by climate change, its effects, and the United Nations 2030 Agenda, the European Union passed new legislation in 2023, set to take effect in 2025, called the Regulation for Deforestation-Free Products. The core idea is to ban and prohibit the commercialization of products derived from environmentally destructive activities. To achieve this, countries trading with the EU must necessarily trace the entire value chain of the product in question to ensure a “deforestation-free label” whether the deforestation is legal or illegal. For now, the products under scrutiny include cattle, cocoa, coffee, palm oil, soy, rubber, wood, and some of their derivatives. The list will be regularly reviewed.


This new legislation presents an obstacle for Brazilian agribusiness, which has historically and economically been one of the main drivers and contributors to deforestation in protected areas to expand agricultural frontiers. President Luiz Inácio Lula da Silva requested a postponement of Brazil’s compliance with the regulation but also emphasized and warned the Bancada Ruralista that destructive agribusiness, which disregards sustainable practices, jeopardizes the reputation and trust in Brazilian goods.


Challenges in Sanctioning and Punishing Illegal Activities


Brazil’s environmental enforcement agencies are severely underfunded, making it difficult to impose sanctions on those responsible for illegal deforestation and fires. In 2020, IBAMA saw a 25% reduction in its budget, leading to a 93% drop in fines for illegal deforestation . This budget cut has hindered inspections and enforcement activities, allowing landowners and agribusiness interests to act with impunity.


In addition to weak enforcement, legal loopholes allow many offenders to escape punishment. Legal disputes over land ownership, coupled with slow judicial processes, make it difficult to hold perpetrators accountable. The political influence of the Bancada Ruralista, which often shields its members from environmental penalties, further complicates the situation. Many large agribusiness operators maintain close ties to politicians, making it harder to implement meaningful sanctions .


Implementing ESG Practices in Agribusiness to Mitigate Climate Change


Environmental, Social, and Governance (ESG) practices refer to corporate initiatives that aim to make businesses more sustainable by considering environmental impact, social responsibility, and ethical governance. In the context of agribusiness, ESG involves measures that reduce deforestation, encourage biodiversity, promote fair labor practices, and ensure transparency in business operations.


Implementing ESG practices can be a game-changer for Brazil’s agribusiness, particularly in mitigating the environmental impacts of deforestation and fires. By prioritizing sustainable land use, companies can reduce their contribution to climate change. Sustainable agricultural practices, such as crop rotation, agroforestry, and organic farming, can improve land productivity without expanding into forested areas. Additionally, improving transparency within supply chains allows companies to better monitor and manage their environmental footprint.


ESG practices in the food value chain and supply chain can significantly reduce greenhouse gas emissions associated with deforestation, livestock production, and transportation. For example, reducing deforestation for cattle ranching can lower Brazil’s methane emissions, a potent greenhouse gas emitted by cattle. Moreover, sustainable land use helps preserve the Amazon’s role as a carbon sink, which is critical for regulating global climate.

According to FAO, establishing a supportive environment for sustainable agribusiness and food value chains requires robust legal and institutional frameworks, along with coordinated efforts across various levels of governance – from national ministries to local districts – in developing policies, legislation, and implementing actions. The FAO advocates for transparent, evidence-based governance that fosters inclusive and sustainable agribusiness practices, ultimately promoting healthy diets for all.


Implementing ESG practices directly supports multiple Sustainable Development Goals (SDGs), particularly SDG 2 (Zero Hunger) and SDG 12 (Responsible Consumption and Production).


  • SDG 2: Zero Hunger focuses on ending hunger, achieving food security, and promoting sustainable agriculture. By adopting ESG practices, agribusiness companies can increase the productivity of their land without resorting to deforestation, helping to maintain food production levels while also protecting the environment .

  • SDG 12: Responsible Consumption and Production aims to ensure sustainable production patterns. ESG initiatives, such as sustainable sourcing of materials, reducing waste, and lowering the carbon footprint, align with this goal by promoting environmentally responsible practices throughout the supply chain .


Incorporating ESG strategies can also help agribusiness companies meet consumer demand for more sustainable and ethically sourced products, thus enhancing their market competitiveness and long-term viability.


Conclusion

Brazil’s fires are a complex issue deeply rooted in the country’s agribusiness-driven economy, weak environmental enforcement, and political dynamics. The role of the Bancada Ruralista in shaping legislation that prioritizes economic expansion over environmental sustainability is undeniable, and the difficulty in punishing illegal activities exacerbates the crisis. However, there is a path forward.


By implementing ESG practices, Brazil’s agribusiness sector can mitigate the environmental impact of its activities, reduce its carbon footprint, and protect critical ecosystems like the Amazon. ESG initiatives will not only enhance sustainability within the food value chain but also contribute to global efforts to combat climate change. Furthermore, aligning these practices with the SDGs, particularly SDG 2 and SDG 12, can help Brazil balance its economic goals with the urgent need for environmental conservation.


The challenge now lies in transforming the agribusiness sector from a contributor to deforestation and climate change into a leader in sustainable practices. This will require coordinated efforts from the government, businesses, and international stakeholders to ensure that economic development does not come at the expense of the planet’s most vital ecosystems.






 
 
 

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