Seminars

Mardi 21 janvier 2025

Veronica Salazar-Retrespo (University of Geneva) will present “Cattle Supply Chains and Deforestation in Brazil”, joint with Matthieu Stigler (University of Geneva).

Abstract:

Tropical forests are crucial to the global environment, serving as biodiversity hubs, storing and sequestering carbon, yet they face severe threats from agricultural expansion. Recognizing their role in deforestation, countries like the UK, US, and EU have implemented trade policies to curb deforestation by requiring proof that the production of a set of agricultural commodities is deforestation-free. A key question is whether these policies will encourage farmers to adopt sustainable practices or instead push them toward less regulated buyers. In this paper, we ask that question in the context of Brazil’s cattle sector. First, we leverage a unique dataset on animal transport, matched with property boundaries, to document key empirical patterns of deforestation and the supply network of cattle at the farm level in the state of Pará, Brazil. Second, we build a structural model of farm-level land use decisions with an endogenous supply network. Third, guided by model-derived gravity equations, we estimate the role of existing domestic supply-chain anti-deforestation policies in shaping the trade of cattle and deforestation decisions. In the future, we aim to simulate counterfactual scenarios to quantify the potential outcomes of trade policies such as the EU’s upcoming Regulation on Deforestation-free products (EUDR).