Assessing the economic viability of integrated crop−livestock systems in Mato Grosso, Brazil

Abstract

AbstractPopulation growth and rising incomes have led to increasing global demand for meat products. Meeting this demand without converting remaining natural ecosystems or further degrading ecosystems is one of the largest global sustainability challenges. A critical step to overcoming this challenge is to increase the productivity of livestock grazing systems, which occupy the largest land area of any type of agriculture globally. Integrated crop−livestock systems (iCL), which re-couple crop and livestock production at the farm scale, have been considered a promising strategy to tackle this challenge by restoring degraded pasturelands and providing supplemental nutrition to livestock. However, few studies have analyzed the economic viability of such systems, especially in Brazil, an important player in global food systems. This paper presents an economic analysis of iCL in Mato Grosso, Brazil, the largest grain and beef producer in the country, which spans the ecologically diverse Amazon, Cerrado and Pantanal biomes. We compare the economic performance of an integrated soybean/corn and beef cattle system to a continuous crop (soybean/corn) system and a continuous livestock (beef cattle) production system from 2005 to 2012. We use empirical case study data to characterize a ‘typical’ farm for each production system within the study region. We find that the integrated crop−livestock system has a higher annual net present value (NPV) per hectare (ha) than continuous cropping or livestock under a range of discount rates. However, under a scenario of substantially higher crop prices, the continuous cropping outperforms iCL. While iCL is not feasible in all regions of the Amazon and Cerrado, our results indicate that in places where the biophysical and market conditions are suitable for production, it could be a highly profitable way to intensify cattle production and potentially spare land for other uses, including conservation. Nevertheless, additional credit and technical support may be needed to overcome high upfront costs and informational barriers to increase iCL areas as a sustainable development strategy for agriculture in the Amazon and Cerrado regions.