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Marfrig to Build Tracking System for Cattle Raised in Amazon

Tatiana Freitas

(Bloomberg) -- One of the world’s biggest beef suppliers is planning to track cattle ranches in parts of the Amazon, and is trying to convince the government to follow the move.

Marfrig Global Foods SA, the second-largest beef producer, will start a five-year project to build a tracking system for cattle raised in critical areas of the Amazon, according to founder and chairman Marcos Molina, who says it’s possible to do the same throughout the nation.

While Marfrig says it doesn’t buy cattle directly from farms in areas where illegal deforestation has been an issue, the initiative addresses the main hurdle to halt deforestation linked to cattle: indirect suppliers.

Over the past decade, major Brazilian beef companies invested a lot of time and money to show they don’t make direct purchases of cattle raised in deforested areas. But meatpackers can’t ensure they are not buying from any farms involved in deforestation indirectly.

“The beef sector is the most affected by Brazil’s bad reputation on fighting Amazon deforestation, but issues related to cattle raising are the easiest to solve,” Molina said in a telephone interview, echoing remarks made to Brazil’s Vice President Hamilton Mourao hours earlier.

The government has the necessary tools to track all of Brazil’s 200 million head of cattle, Molina said. But actions are needed, such as adding an environmental topic in documents for animal transit and requiring all cattle to be tracked from a certain date.

Such initiatives could reduce fires and deforestation, while improving Brazil’s reputation abroad, helping the nation gain access to new markets, Molina said. He gave the example of Uruguay, which has access to 12 markets partly thanks to its full tracking system. Marfrig exports beef from Brazil, Uruguay, Argentina, Chile and the U.S.

“Marfrig is doing a five-year plan,” Molina said. “But if we were able to join the government and companies on this purpose, we could do it faster.”

Molina said Mourao, who chairs the Council of the Amazon, was open to his suggestions, adding the federal government is aligned with Brazilian companies’ concerns about growing deforestation criticism.

Senior executives of other companies including Cargill Inc. and Suzano SA attended the meeting and sent a letter to authorities stating that the negative perceptions are potentially damaging to both reputation and business prospects. Molina was the only representative from the meat industry to sign the letter.

Around 40% of the cattle slaughtered by Marfrig in Brazil are supplied by farmers that raise animals from birth to slaughter, which annuls the indirect suppliers problem.

(Updates with comments on Uruguay in seventh paragraph)

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