Project Amazonia: Solutions - International Solution for Sustainable Ranching (ISSR)
1. Problem:
Current ranching practices in Brazil harm the Amazonian environment.
2. Thesis:
Project Amazonia will establish the International Solution for Sustainable Ranching (ISSR) which will generate a market for “rainforest-friendly” beef products, while minimizing the market for beef products whose production harms the rainforest.
3. Background:
Cattle ranching is a very important industry in Brazil that is progressively becoming even more vital to the Brazilian economy. The Brazilian commercial cattle herd is the largest in the world.1 Beef and milk are the top two livestock products in Brazil2 and exports of Brazilian beef grew to $1 billion (USD) in 2001. By 2003, Brazilian beef output is expected to reach 7.4 million tons, with exports of 925,000 tons. One problem in Brazilian beef exporting has been the existence of foot and mouth disease in some Brazilian states. This has caused the United States to be very stringent with Brazilian beef imports. However, the United States and Europe are still major consumers of Brazilian beef.3
For every 1/4 lb hamburger consumed in the US from rainforest beef, about 55 square feet of rainforest was cleared. Although many fast food chains claim not to use rainforest beef, this claim is simply not valid. The USDA does not have an adequate system of labeling the origin of beef. Thus beef grown in the rainforest can pass through a processing plant in the US and still be labeled as domestic meat.4 With the outbreak of many bovine diseases worldwide, Brazil has been able to conquer some new markets and continues to expand its thriving cattle industry. It produces the second largest amount of beef in the world after the United States.
Unfortunately, this has disastrous effects on the rainforest. Cattle ranching depletes the land of nutrients because cattle often destroy all the biomass on a piece of land by eating beyond the restorable grass height; furthermore, this makes self-restoration very difficult. Slash and burn tactics are also often employed to clear land for cattle to graze. Thus, current cattle ranching practices, are very destructive to the land and is not sustainable.
The following map shows the severity of the cattle problem in the Amazon. The orange region is where the rainforest is currently threatened by ranching.
Cattle ranching is one of the most important problems that is destroying the Amazon rainforest now. Although ranching has been commonly associated with small farmers, large corporations and ranches are responsible for more than 80% of cattle ranching in the Amazon. Therefore, we believe that our plan will prove effective because some economic impositions will not be damaging to corporations that reap huge profits every year.
At present, Brazil produces about 6.14 million tons carcass weight of beef and veal per year and exports around 7% of the world’s total beef export. 5 The most important motivation for ranching is the huge fast-food industry that has grown in developed countries in corporations such as McDonald’s, whose demand for beef is at the rate of over tens of thousands of tons per day. 5 In addition, there were government subsidies and tax incentives for ranchers in the past that allowed the rich landowners and companies to monopolize the ranching industry. The standing Brazilian law is that landowners must preserve 80% of their land, but this is a law that is very hard to enforce and cannot be fully investigated with 300 inspectors for 5 million acres of land. Therefore, our plan provides a new method for the implementation of a more stringent and diverse set of rules and regulations for ranchers to follow.
The plan that we are proposing is indirectly related to the dolphin-safe tuna labeling plan of the early 90’s. 6 The dolphin-safe tuna campaign started when consumers were informed of the killing of hundreds of thousands of dolphins as a by-product of tuna fishing. Consumer awareness and activism spread quickly in the United States, and labels were soon seen on tuna products ensuring the contents were produced “dolphin-safe”. The campaign then moved into the legislative body. After some debate, the US Congress passed a law allowing only the sale of “dolphin-safe” tuna in the country, and proposed a set of standards to define “dolphin-safe.” As the specifics of the standards do not pertain to the case at hand, we shall leave them unlisted, but they can be found in the previously mentioned source.
Similarly, our plan involves stamping beef exports from the Amazon region as “rainforest-friendly” according to standards that we determine to be safe practices, which will be outlined in the next section. A major concern is how to achieve consumer awareness, which is a crucial requirement. Consequently, our plan involves carrying out a major advertising and public relations campaign to inform the public of the connection between Amazonian ranching, deforestation and, global warming. The details of the campaign are described in a later section.
4. Procedure
Week 1 – Week 2: Begin analysis of the beef supply and consumption of potential American and Canadian target cities. Analysis of the target cities will include, but may not be limited to:
- Annual beef supply/consumption from:
a) Brazilian cattle ranches located near or in the Amazon rainforest.
b) Brazilian cattle ranches not located near or in the Amazon rainforest
c) United States cattle ranches
- Annual beef consumption of beef in comparison to other meats.
Potential target cities would initially include:
- United States
- Boston, Massachusetts
- Philadelphia, Pennsylvania
- Columbus, Ohio
- Atlanta, Georgia
- Denver, Colorado
- Chicago, Illinois
- San Jose, California
- Houston, Texas
- other more rural cities as well
- Canada
- Montreal
- Quebec
- Toronto
- Ottawa
Week 2: Determine three (3) American and two (2) Canadian target cities. Choose marketing company.
Week 3 – 10: The ISSR will begin consumer awareness campaign with the help of the marketing company, an independent marketing company researched and chosen by ISSR leadership. The marketing company will create a marketing strategy to raise public concern for the status of the rainforest, to educate the public about the possibilities of global warming as a result of deforestation, and to win public support for “rainforest-friendly beef.” Though the marketing company may suggest unforeseen possibilities to our current marketing strategy, the marketing will include: publicity events (such as a “Walk for Beef”), internet advertising, special interest group alliances, network news stories, television advertising, newspaper advertising, and magazine advertising.
Simultaneously, ISSR market analysts will conduct surveys to measure public attitudes regarding the beef products and the Amazon rainforest. These surveys, conducted by random phone calls or mailings, would answer the following general questions:
- How significant is the origin of beef for the average customer?
- How threatening does the average consumer perceive global warming to be?
- How threatening does the average consumer perceive the deforestation and destruction of the rainforest to be?
- How high a premium would the average consumer pay for “rainforest-friendly” beef?
- Would the average consumer prefer to buy American or Brazilian beef? If so, how high a premium would they pay for their preference?
ISSR market analysis would be conducted at varied intervals with fixed variables to determine the effects of the consumer awareness marketing campaign.
Week 11: Compilation and Analysis of Market Analysis: The ISSR will determine the helpful and detrimental aspects of the consumer analysis marketing campaign. They will create abstracts and pamphlets explaining the results of the market research for Brazilian ranchers.
The ISSR will continue the US and Canadian consumer awareness campaign.
Week 12: Funding Analysis: Based upon the market analysis, ISSR economic advisors will project necessary subsidy funds for Brazilian cattle ranchers. These estimates, though certainly more complicated, will rely heavily on whether consumers are willing to pay a Brazilian “rainforest-friendly” beef. They will also rely on the projected US beef market.
The ISSR will continue the US and Canadian consumer awareness campaign.
Week 13-23: Certification: The ISSR central headquarters will establish the Office of Certification, responsible for verifying and certifying cattle ranchers who abide by the Good-Grazing Guidelines (GGG), a program previously outlined and to be fully established by the Office of Certification.
Simultaneously, the ISSR Brazilian marketing team will begin targeting cattle ranchers, particularly those near or in the Amazon, to encourage their cooperation with the outlined Good-Grazing Guidelines (GGG). The Brazilian marketing team will explain the advantages of compliance and certification, primarily the potential increase in market share, to Brazilian cattle ranchers. Current projections indicate that Brazilian ranchers will be coerced into compliance by the increased market for “rainforest-friendly” beef; essentially, market forces will drive this aspect of the plan.
Simultaneously, the ISSR US marketing team will begin a less intensive US marketing campaign to American ranchers. The campaign will be less intensive primarily because US cattle ranchers will not be forced to alter ranching practices and therefore will be more willing to comply.
The ISSR will continue the US and Canadian consumer awareness campaign.
Week 24- 52: The ISSR will initiate and continue certification of “rainforest-friendly” beef products in all US and Canadian markets.
The ISSR will continue the US and Canadian consumer awareness campaign.
The ISSR will establish interval based market analysis of the US and Canadian beef market. The market analysis team will produce data and documentation of the status of the beef market monthly, considering general beef consumption trends and the effects of the consumer awareness campaign, amongst other variables.
The ISSR will monitor and analyze the changes in ranching techniques in Brazil. Soil, forest, and water indexation on cattle ranches will be carefully studied and documented. The ISSR Environmental Analysis Team will publicly release documentation of its research and analyses every two weeks. The Environmental Analysis Team will collaborate with SIVAM, an established Brazilian environmental protection agency, to maximize the breadth and accuracy of its reports.
Week 52: The ISSR will release “The First Annual Report of the International Solution for Sustainable Ranching”. This report, distributed in both English, French, and Portuguese, will include the analysis of expected results (outlined below), success index for the Brazilian and American ranching industries, success index for the preservation of the Amazonian rainforest, consumer support of ISSR, Brazilian public support of the ISSR, the ranching industry of Brazil support of ISSR, the ranching industry of the US support of the ISSR, unforeseen complications and variables, and projected future of ISSR. The Report should also propose and potentially establish changes in the ISSR, as the leadership determines is reasonable.
Week 52-104: The ISSR will continue the US and Canadian consumer awareness campaign.
The ISSR will continue interval based market analysis of US and Canadian beef market.
The ISSR will continue interval based environmental analysis.
Week 104: The ISSR will release “The Second Annual Report of the International Solution for Sustainable Ranching”. The formatting of the report would be similar to the First Annual Report.
Week 104-indeterminate:
The ISSR will continue the US and Canadian consumer awareness campaign.
The ISSR will continue the interval based market analysis of US and Canadian beef market with significantly longer intervals for market analysis as the leadership determines to be reasonable.
The ISSR will continue interval based environmental analysis.
Week 156: Expansion: The ISSR will begin exploring the possibility of European expansion of the ISSR. It will initiate market analysis and consumer awareness campaigns in Europe similar to those mentioned earlier for the US and Canadian analysis.
5. Testing
Much of the testing required for the success of ISSR has been fully documented in the procedure. However, there are tests that have not yet been adequately explained. The tests to be executed by the ISSR are listed here (an *asterisk designates a test that has been explained above).
o Week 1: Target City Market Analysis *
o Week 3-10: Consumer Awareness Analysis *
o Week 11: The ISSR will determine the helpful and detrimental aspects of the consumer analysis marketing campaign by analyzing how responses to the consumer awareness survey changed with respect to the progress of the marketing campaign. If public understanding and concern for the rainforest increased significantly since the beginning of the project, the marketing campaign would be deemed successful.
o Week 24-52: Interval based market analysis*
o Week 24-52: Interval based environmental analysis: The aforementioned soil, water, and forest indexation will be tested using the Project Amazonia Soil Quality Index Method (described here), the Project Amazonia Water Quality Index Method (described here), and the Project Amazonia Flora Quality Index Method (described here). SIVAM will also be able to provide any necessary equipment for this type of analysis.
o Week 52: “The First Annual Report of the International Solution for Sustainable Ranching” will utilize a complex set of testing methods. Though, the ISSR may incorporate additional testing methods, the following are highly anticipated:
-To index Brazilian and American ranching industries, the ISSR will analyze fluctuations in market share, production, sales, net profit, stock prices, and overhead costs.
-To index the preservation of the Amazonian rainforest, the ISSR will implement methods described for interval based environmental analysis.
-To measure consumer support of the ISSR, Brazilian public support of the ISSR, and the ranching industry support of the ISSR, the ISSR will hire an independent surveying company to conduct a mail-based survey. Possible survey questions will produce public perceptions, questions, and suggestions for the ISSR.
o Week 104: “The Second Annual Report of the International Solution for Sustainable Ranching” will be tested in the much same way as the First Annual Report.
6. Expected Results
The ISSR is expected to minimize rainforest destruction due to cattle ranching while improving both the US and Brazilian beef industries.
A key component of our expected success is the strength of our preliminary market analysis. By putting forth a great deal of time and resources into preliminary market analysis, the ISSR makes success more than just a possibility. Both Brazilian and US ranchers are wholeheartedly expected to accept and even embrace the research that ISSR will present. After all, market forces will drive these ranchers to do so. Presented by our research regarding the very lucrative market for “rainforest-friendly” beef, ranchers will be more than willing to cooperate with the ISSR. We are confident that market forces will be successful.
Furthermore, by not only encouraging the GGG but also making the GGG a practical reality for Brazilian farmers, the ISSR expects to see a relatively high percentage of Brazilian farmers (an expected 80% to 90%) join.
With a strong consumer awareness campaign, the ISSR expects a strong beef market, especially strong for beef that is deemed “rainforest friendly.” Because the overall beef market is expected to greatly expand, we can also expect significant increases in both Brazilian and US beef sales. This discredits the notion that an increase in the beef market of one country will cause a decrease in the beef market of the other country. It further discredits the argument that Brazil and the US will enter hostile trade relations due to increased competition in the beef market. In fact, we feel that the sense of cooperation created by the ISSR will foster better relations between Brazil and the US.
7. Externalities:
A reasonable number of externalities may affect our plan because any market-oriented plan is susceptible to the inherent uncertainty of economic markets. There are two serious externalities that may affect our plan.
Foot and Mouth Disease: In recent history, the Brazilian cattle ranching industry has been severely affected by the Foot and Mouth Disease, a very dangerous virus that threatens the health of both domesticated and wild cloven-hoofed animals. The virus caused approximately $300 million dollars of losses in cattle. Extensive research is underway to eliminate this devastating virus, though no solutions have been found. The success or failure of the Foot and Mouth Disease research may very well affect the Brazilian beef market, and perhaps even the US beef market. This, in turn, would have adverse effects on our market plan.7
Foreign Diplomacy: Though Brazilian foreign relations with the United States are currently favorable, uncontrollable future changes would adversely affect out plan. If Brazil, for political, economic, ideological, or any other reason, grew hostile to the United States, it is unlikely that the ISSR would continue in Brazil. However, the effects of the future international politics will be undoubtedly less threatening after week fifty two (52), when the ISSR will produce its First Annual Report and thus, finally establish its full legitimacy.
Enforcement and Corruption: It is possible that the Office of Certification and SIVAM, along with the other agencies, could become corrupt in ineffective. However, maximum feasible security has been incorporated into the plan, as all agencies will have oversight of other agencies. Furthermore, the interval-based reports will ensure accountability. Corruption, though possible, is by our best estimations, unlikely.
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1: “Brazil’s Prized Exports Rely on Slaves and Scorched Land”, NY Times, March 26, 2002.
2: Economic Research Service, US Dept. of Agriculture
3: Marcelo, Raul O. Inquirer News Service. 30 April 2002. Available on the WWW: http://www.inq7.net/bus/2002/may/01/bus_7-1.htm
5: ABARE, USDA 2000
6: Mitchell, Lorraine. Economic Research Service, 2000 Dolphin-Safe Tuna Labeling
7: Institute for Animal Health, Copyright 2001. Available on the WWW: http://www.iah.bbsrc.ac.uk/iah_education/FMD.html
