Feature Story

Beefing up Paraguay's meat industry

July 17, 2019

Over the past two years, IFC’s Manufacturing, Agribusiness and Services’ Advisory Services team has been working on a pilot project with 11 of Neuland’s farms to showcase the operational and financial benefits of shifting to more efficient and environmentally sustainable ranching practices. Photo: Neuland Cooperative.
Over the past two years, IFC’s Manufacturing, Agribusiness and Services’ Advisory Services team has been working on a pilot project with 11 of Neuland’s farms to showcase the operational and financial benefits of shifting to more efficient and environmentally sustainable ranching practices. Photo: Neuland Cooperative.

Paraguay is one of the top 10 largest beef exporters in the world and has the potential to double its reach over the next decade. But as demand for sustainable livestock practices increases, the country will need to overcome environmental challenges linked to raising livestock if it wants to reach its export potential.

Until recently, the country has faced deforestation rates of more than 250,000 hectares per year in the Chaco eco-region—one of the most biodiverse areas in South America—to make way for pasture and soy plantations for cattle feed. This comes at a time when consumers and global food companies are demanding beef from sustainable sources. In addition, international markets are calling for robust traceability of beef products to verify their source and safety.

“We want to increase productivity and improve business profitability in our farms,” says Georg Harms, a producer for Neuland Cooperative, which has over 1,200 members and is one of Paraguay’s largest cattle producers and processors.

“Every year the price of land increases, therefore we have to use resources efficiently to increase productivity and ensure our future generations continue with beef production,” Harms said.

Over the past two years, IFC’s Manufacturing, Agribusiness and Services’ Advisory Services team has been working on a pilot project with 11 of Neuland’s farms to showcase the operational and financial benefits of shifting to more efficient and environmentally sustainable ranching practices.

Neuland is piloting techniques to improve feed and grazing management as well as cattle health and breeding. These techniques are expected to increase production from 140 to 250 kilograms of beef per hectare.

This is not just a win for farmers, it is a win for the environment. Neuland has an environmental permit and any change in land use is done in accordance with forestry-use laws, which will require that in total, Neuland leaves untouched about 50 percent of the native forest. Neuland anticipates a 23 percent decrease in greenhouse gas emissions because it is now applying these new techniques for increasing beef production. Animal feed, which is supplemented by sorghum and corn feed, is produced on the farm without using pesticides, fertilizers or even irrigation.

IFC is also working with a second company, Frigorifico Guarani, to design an energy and water efficient beef processing facility with a supply-chain-verification scheme. This will make it attractive for potential investors.

“Guarani is determined to implement sustainable programs within the company and throughout its whole global supply chain, from cattle procurement and all other necessary materials for beef production up to the final consumer with a fully transparent traceability program,” said Juan Carlos Pettengill, Frigorifico Guarani CEO.

At government and sector level, IFC and the World Bank have been supporting Paraguay as it develops strategies to address beef-sector sustainability as part of the country’s Country Partnership Framework, and to establish a framework for environmental traceability of cattle.

Manufacturing, Agribusiness and Services’ Advisory Services and Environmental and Social Governance teams are working with the government, civil society and industry stakeholders to create the first comprehensive biodiversity map for the Chaco eco-region.

Nearly $2.5 million has been raised through the Global Environment Facility as well as from Neuland and Guarani to tackle sustainable production in the eco-region.

USAID, World Wildlife Fund, Athena Foods, Neuland, the Association of Municipalities of Chaco Central and IFC jointly worked together to develop a manual for best management practices for beef production in the eco-region. The manual was published under the Alianza para el Desarrollo Sostenible initiative. Athena Foods is also one of IFC’s existing clients and exports 50 percent of Paraguay’s beef.

Along with beef industry producers, retailers and the financial sector, IFC is helping to develop sustainability criteria for Paraguayan beef based on the Global Roundtable for Sustainable Beef (GRSB), and a local GRSB chapter has been established.

 “An increase in productivity improves livelihood for the whole community as it involves many actors along the value chain such as producers, industry, suppliers and services,” says Jose Renato Saalfeld, Technical Advisor for Neuland Cooperative.

This story was originally published by the International Finance Corporation.