Brazil & Southern Cone - August 2023

Deforestation in the Amazon biome decreased by 33.6% in the first half of 2023 compared with the same period in 2022, according to data from Brazil’s national space research institute (Inpe) released on 6 July. The figures were welcomed by President Luiz Inácio Lula da Silva’s left-of-centre government as a victory for its environmental protection efforts. This progress, however, may be threatened by the government’s continued commitment to boost agriculture exports, which potentially undermines Lula’s green goals, given the huge amount of deforestation associated with the expansion of agribusiness activity.

Protecting sensitive biomes such as the Amazon was one of Lula’s key election pledges during the 2022 presidential race. Even before taking office in January, Lula attended the United Nations (UN) climate change conference (COP27) in November and declared his aim for “zero deforestation” in the Amazon rainforest by 2030. Lula’s green credentials are backed by his previous experience in office, as Brazil’s deforestation rate in the Amazon decreased by around 70% during his first two terms (2003-2011). The annual deforested area in the Amazon dropped from 21,600km² in 2002 down to 6,400km² by the time Lula left office in 2011. This is in stark contrast to the environmental record of Lula’s right-wing predecessor Jair Bolsonaro (2019-2023), as Inpe’s satellite monitoring systems detected a 73% rise in Amazon deforestation between 2019-2021.

Despite encouraging numbers in the Amazon, Inpe’s data showed worrying signs in other sensitive biomes, such as the Cerrado. The vast tropical woodland-savannahs of the Cerrado cover over a fifth of Brazil’s total land area and span 13 of the country’s 27 states, including Maranhão and Bahia in the Northeast, Mato Grosso and Goiás in the Centre-West, and Minas Gerais and São Paulo in the Southeast. Inpe noted a 21% year-on-year rise in Cerrado deforestation in the first half of 2023, with Bahia registering the highest yearly increase (28%), with 1,247km² of deforested land.

A major cause of deforestation in the Cerrado has been the practice of slash-and-burn. Farmers have been known to use this method to clear land for their cattle or crops. Inpe detected 4,472 forest fires in the Cerrado in June, marking a 5.4% increase from a year earlier and the highest number of fires registered for the month of June since 2010. More than half of the Cerrado’s forest fires in June this year (2,447 fires) were detected in the agricultural powerhouse of Mato Grosso state.

President Lula announced a package of environmental protection measures on World Environment Day (5 June), including an expansion of some protected conservation areas in Amazonian states, as well as the revival of the ‘Bolsa Verde’ fund. This conditional cash transfer programme for rural populations in the Amazon, first launched during the presidency of Dilma Rousseff (2011-2016), aimed to alleviate poverty and reskill communities towards environmentally sustainable jobs and sectors. The following day Lula travelled to the municipality of Luís Eduardo Magalhães in Bahia to attend one of Brazil’s largest agribusiness fairs, the Bahia Farm Show. At the event, Lula urged agricultural producers to prioritise sustainability and warned that “anyone who wants to act like a criminal and go cutting down trees will have to suffer legal punishments”.

But Lula’s tone towards agribusiness groups at the Bahia Farm Show was not entirely confrontational. He also said that “Brazil needs agriculture and industry” and that the government must support agribusiness to “finance the machines, finance the harvest, to guarantee exports.” The president went on to promote his government’s agriculture funding programme, Plano Safra 2023/24, initially announced on 27 June, which will provide R$364.22bn (US$75.63bn) in loans and subsidies for agribusiness companies.

The governor of Bahia, Jerônimo Rodrigues, hosted President Lula again on 3 July in the municipality of Ilhéus to attend the launch event of the first section of the Oeste-Leste railway (Fiol). When completed, Fiol will connect the Ilhéus port to Caetité and then to Barreiras, both municipalities in Bahia state. The final stretch would connect Barreiras to Figueirópolis, a municipality in neighbouring Tocantins, another state in the Cerrado biome with an economy predominantly driven by agro-industry and which saw a 17% yearly rise in deforestation in the first half of 2023.

The Lula government has similarly backed the construction of the Ferrogrão railway, a stalled infrastructure project originally proposed during the Rousseff administration and then suspended by the supreme court (STF) in 2017. If completed, Ferrogrão would tear through 993km of Cerrado woodlands and Amazonian rainforest, allowing freight trains to deliver Mato Grosso’s agricultural products to Itaituba, a municipality in Pará state which sits on the Tapajós River, a major tributary of the Amazon River. The railway was blocked because it would have infringed upon protected conservation areas, such as the Jamanxim National Forest in Pará. Speaking on national radio Band News on 16 July, Lula’s agriculture minister Carlos Fávaro expressed optimism that congress could table the necessary legislation to reduce the size of the Jamanxim protected area standing in the way of Ferrogrão’s licence.

Environmental impasse over EU trade deal

President Lula attended a summit on 17-18 July between European and Latin American leaders, where he repeated his criticisms of the additional environmental protocols requested by the European Union (EU) to be added to the free trade deal between the EU and the Southern Common Market (Mercosur). Lula has made environmental protection and the ratification of the EU-Mercosur deal a priority for this government. But, at the summit, he continued to accuse the EU of using environmentalism as veil for protectionism – reportedly fearing competition from South American agribusiness which would enter the European market if the deal were to come into force.

Brazil’s hub for climate diplomacy  

Belém, the capital of the northern Amazonian state of Pará, will be the venue for two climate diplomacy events during President Lula’s current term – the leaders’ summit of the Amazon Cooperation Treaty Organisation (OTCA) on 8-9 August this year and the United Nations climate change conference (COP30) in November 2025. On 8 July Lula travelled to Colombia, another OTCA member state, to discuss preparations for the summit of Amazonian nations, where he boasted that COP30 would be an opportunity “for the world to see the real Amazonia”, setting up the OTCA summit between eight South American nations as a small-scale rehearsal for the world’s largest climate diplomacy forum.

Rise of ‘narco-deforestation’

The United Nations Office on Drugs and Crime (UNODC) released the 2023 edition of its annual World Drug Report on 26 June, which included a special chapter on environmental crimes in the Amazon Basin. UNODC noted a phenomenon known as ‘narco-deforestation’, which has been on the rise in recent years.

Not only in Brazil but also in neighbouring Amazonian nations, such as Colombia, Peru and Bolivia, UNODC found growing evidence of drug-trafficking organisations (DTOs) reinvesting their proceeds from the drug trade into legal and illegal land acquisition and forest clearances for farming activities and other extractive industries. DTOs not only ‘tax’ the miners, cattle ranchers, poachers, or fishing groups under a type of protection racket, but also use small local businesses as front companies to launder money across the thin boundaries separating the formal and illicit economies in the Amazon regions.

The largest DTOs in Brazil, such as Comando Vermelho (CV) and Primeiro Comando da Capital (PCC), have long had business links with logging groups and have been known to smuggle drugs in the hulls of boats shipping timber abroad. Between 2017 and 2021 Brazilian federal police carried out 16 major seizures of cocaine concealed in timber shipments. DTOs also share logistics networks and transport infrastructure with illegal mining groups, who often operate their own aircraft and landing strips. The UNODC report estimated that 58% of the 2,986 private airstrips in the Brazilian Amazon were not registered on official records.

The areas near the borders between the Amazonian nations are often under-policed, allowing Brazilian, Colombian, and Peruvian DTOs to collaborate as well as compete over local extractive industries. But competition between rival groups, such as the PCC and CV, has often turned deadly. UNODC observed a correlation between the rates of deforestation and violent crime, as the criminal groups vying for control of trafficking routes as well as the extractive industries tied to ‘narco-deforestation’ have caused a rise in homicides in Brazil’s northern region, where the murder rate in 2019 was 260% higher compared to 1980.