Pará has the second-largest cattle herd in Brazil, totaling 26 million heads and a 150% increase in pasture areas over the past 20 years, leading to significant environmental challenges, such as illegal deforestation and land grabbing. To enhance transparency and promote sustainable development in the supply chain, the Integrity and Development Program for Pará’s Livestock Production Chain was established in 2023. This program includes a mandatory individual cattle traceability system aimed at supporting environmental and land regularization while providing greater support to producers through incentives and productive development.

According to a study by Bain & Company and The Nature Conservancy, mandatory individual traceability could increase the annual value of Pará's livestock production by up to $1 billion in the next three to five years, in addition to reducing losses caused by sanitary interruptions. To arrive at this estimate, the companies analyzed 18 possible mechanisms and concluded that the stand-out mechanism would be direct payments to producers for each tracked head of cattle. This bonus system would require investments of up to $58 million annually.

Key growth drivers include:

• Increased exports of traceable beef: A 4%–10% increase in the export mix of traceable beef could expand Pará’s livestock production by $115 million to approximately $230 million.
• Growth in domestic demand and price: A 3%–8% rise in the sale price per arroba (15 kilograms) could increase the state’s cattle production value by $70–$160 million, based on 2023 results.
• Reduction in the informal market: A 50%–80% reduction in the share of beef sold in the informal market could raise the value of cattle production by $200–$330 million.
• Increase in productivity: Boosting productivity by 5%–10% through better management of traceable cattle could increase production value by $112–$224 million.

Large-scale producers are more likely to adopt traceability due to the direct benefits in management and market access. Conversely, small-scale producers and those on lands affected by deforestation—responsible for nearly 50% of Pará’s cattle herd—face greater barriers to adoption, primarily due to the high cost of environmental compliance and concerns about being marginalized in the formal market.

A significant portion of rural properties in Pará face irregularities caused by illegal deforestation. It is estimated that at least 50% of the state’s cattle are located on properties with environmental issues linked to deforestation.

Approximately 88% of properties with irregular CAR (Rural Environmental Registry) records for livestock activities are small rural properties and settlements, totaling over 100,000 properties that host nearly 6 million heads of cattle. Meanwhile, medium and large properties with environmental irregularities account for nearly 8 million heads of cattle across more than 14,000 properties.

Successful implementation of interventions in the livestock value chain is often tied to improved sanitary security, enhanced product quality, and the adoption of sustainable practices, including animal traceability. These outcomes frequently depend on support mechanisms that enable the adoption of better productive practices, especially among the most vulnerable segments of the supply chain.

To encourage adherence to these interventions, it is common to establish mechanisms that provide both financial and non-financial benefits, aiming to motivate rural producers and farmers and ensure a smooth transition to new social, productive, and environmental requirements.

Given the complexity of this scenario, well-structured enabling mechanisms and collaboration between the government, the private sector, and livestock producers will be crucial for achieving consistent results. Balancing productivity, sustainability, and competitiveness in the sector will require coordinated efforts to overcome barriers and ensure that the benefits of these interventions are widely distributed across the value chain.