For Brazil, increasing cattle productivity is critical to raising beef production without increasing forest clearing and thereby meeting the nation’s environmental commitments. Currently, pastures cover over 220 million hectares of the nation, and their expansion has been the primary driver of deforestation both in the Amazon and in the Cerrado. The typical pasture of the country’s productivity is so low that the intensification of cattle ranching activities could enable cattle productivity to increase at least twofold, reducing the pressure on forests while generating economic benefits. Therefore, identifying rancher incentives to improve their pastures’ productivity will be essential for designing effective environmental and agricultural policies in Brazil in the coming decades.

This white paper outlines the close connection between cattle productivity and the share of farmland devoted to this activity. Estimates using Agricultural Census data from the last four decades show that these variables are inversely related, indicating that cattle ranching becomes more productive as ranch size declines. Additional empirical exercises suggest that the cost of the land relative to the capital might explain this relationship. Finally, the white paper presents policy lessons that might show a pathway for intensifying cattle ranching without inducing further deforestation.