Facing rapid rates of deforestation, the government of Paraguay has been working with the private sector to manage the expansion of cattle ranching in Chaco, a semi-arid region in the western part of the country with very low population density and a growing agricultural sector. The goal is to ensure that the agricultural sector’s growth does not come at the cost of valuable ecosystem services.
In this context, CSF completed a targeted scenario analysis (TSA) to inform policies on potential trade-offs between forest conservation and the expansion of cattle ranching, in addition to providing opportunities to implement production systems with higher economic benefits. CSF worked closely with cattle ranchers to highlight cost barriers faced by producers, value ecosystem services as perceived by producers and by the public at large, and design incentive systems for forest conservation without compromising competitiveness in the industry.
The results of the analysis showed that many producers are seeing net losses in their productive systems, primarily due to high operating costs and inefficiencies in land management. Cooperatives in the region have higher net revenues and higher productivity levels but most of their farms have already exploited their productive frontiers. Although the productive systems are considered sustainable, because of the general adherence to regulations requiring standing forest in up to 50% of the farm, the TSA identified opportunities for improvement: better defining what sustainable ranching is, aligning definitions and practices with niche markets, and marketing sustainable practices. Other recommendations include creating incentives through tax systems and payment schedules, as well as strengthening a system of Payments for Ecosystem Services, among others. If these recommendations are adopted, producers could see financial gains of about USD 400 per hectare while government agencies could collect about USD 10 million more over the course of 10 years.
The project is one of several UNDP TSAs implemented by CSF. TSAs are designed to “capture and present the value of ecosystem services within decision making, to help make the business case for sustainable policy and investment choices.” (1)
Photo: Cattle herd in Paraguay
Photo Credit: Jo Gerken/ Shutterstock.com