THE MARKETS INSTITUTE AT WWF

I

BUSINESS CASE

© Jason Houston / WWF-US

Deforestation and Conversion-Free: How Argentine Beef Can Lead theMarket — Faster and at Scale
Preface
Jason Clay, Ph.D., SVP Markets, Executive Director
Markets Institute, WWF-US
Markets Institute business cases aim to document
innovative and creative ways that companies,
governments, and other stakeholders are solving
significant global problems that others are or will face.
The goal is to elevate potential solutions to help otheractors think differently about both problems andsolutions with the resources they have at hand.
Through cases such as this, we strive to flatten thelearning curve, to make the journey to more sustainableproduction easier and quicker. As the climate continues
to change, urgent and chronic issues will add complexity
to the planning, management, and production of raw
materials. Fostering change in the food and renewable
resources sectors (soft commodities) will become moredifficult than ever.
If those who rely on renewable raw materials (e.g. fortheir livelihoods or the overall success and sustainability

the Chinese Meat Association has committed to DCF
animal protein and feed and helped develop an industrywide standard based on the Accountability Framework
initiative’s guidance. The EU and UK are putting in placelegislation to halt and reverse global deforestation
driven by their own consumption.
There has been much discussion of the valueof jurisdictional approaches as tools to achievesustainability commitments at more local government
levels. But it is rare that local governments have theinstitutions to monitor and redress the key issues.
Usually, national government do this; it’s where change
happens at scale and where there’s more likely to besystems in place to monitor, regulate, and enforce
necessary behavior changes.
If countries have invested in the systems needed tomonitor livestock and/or deforestation issues it is likely
at the national level. Enter Argentina. In response tofood safety issues and environmental degradation,Argentina has established such national systems.
Argentina adopted a Forest Law and a system to monitor

of their business) are to become more resilient, theyand enforce them. It also has a traceability system towill need to anticipate issues, not just lurch from crisis

monitor the movement of cattle over their lifetimes

to crisis. And that requires learning from examples ofto prevent the spread of disease and comply withwhat’s working and what’s not.

international trade rules. What Argentina has not yet

This case focuses on one example of what a government

done, however, is combine the two.

can do to reduce land use change and GHG emissions

These two systems could be used to do much more.

while positioning a country as a global market leader

For us, the first task was to see if they are interoperable

through beef exports that are free from deforestation— can the systems talk to each other? They can. The

and conversion (or DCF beef). There’s growing demand:next was to understand whether animals could be kept
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segregated through the slaughter at little to no extra

estimated that around 80% of global deforestation iscost. They can. Now the issue is to see if the approach

driven by agricultural expansion. The current biodiversity

can be scaled, credible, and leverage these emerging

crisis is also related to land use change.

markets to meet growing demand. And, if it can be
expanded to other commodities that are also traced
through government systems, such as soy or wheat.
That is the next phase of the work.
To mitigate the impacts of climate change, countries
need to use existing systems to tackle more thanthey may have originally been intended for. Whichgovernment will be next to step up?

One of the great challenges for countries is to resolve
the conflict between food production and nature
conservation and to obtain up-to-date and reliable
information on ecosystems and production chains.
Traceability is a fundamental tool to respond to thegrowing demands of consumers regarding food safety
and quality, adding value to commercialized productsthat minimize social and environmental impacts.

Foreword

Argentina is one of the few countries that can count on

Manuel Jaramillo, Director, Fundación Vida Silvestre
Argentina

reliable supply chain monitoring systems that effectively
contribute to the conservation of forests and natural

Increasing global food consumption and demand

ecosystems, that allow the positioning of our products

encourages the expansion or intensification ofwith differential attributes in terms of sustainability, andagriculture, which often leads to an increase inthat respond satisfactorily to demands and commercial

deforestation and conversion of natural habitats. It islimitations, both local and international.

Figure 1. Argentina’s Native Forest Territory (OTBN)
Forest Law Map for Chaco Region

Today we are faced with theopportunity to provide Argentinesand the world with deforestationand conversion-free food; all thatN

remains is to connect theexisting information systems andpromote health and environmental
traceability as a state policy
Argentine beef is much more thantasty and tender, it can also be
produced in a sustainable andclimate-smart way, which can andshould be put into value.

Introduction
Over the last two years, Fundación
Vida Silvestre Argentina andWWF have been exploring a
concept with the potential toReferences
National Protected Areas

disrupt markets while 			Gran Chaco ecoregion

revolutionizing strategies for

Subnational Administrative Boundaries
Native forest territorial planning (OTBN)

climate impact and biodiversity 		Conservation categories

loss. Through an innovative modelI – high
II – medium
III – low

to reduce deforestation andconversion of critical ecosystems,2

economic and environmental resiliency can be enhanced
while enabling benefits for government, business,
producers, and the environment. This concept explores
the possibility for all exports in Argentina’s beefcommodity supply chain to be free of deforestationand other ecosystem conversion (DCF), thereby curbing
harmful environmental impacts while transforming the
global beef market.
In the past two decades, soy and beef production havebeen the main drivers of deforestation in Argentina’s
Chaco region. At this time, beef prices are rising, andprojections show that beef and soy production willcontinue to drive deforestation in the region. As thepotential for continued habitat loss in Argentina is high,an innovative approach to protect the Chaco and otherhabitats is a compelling opportunity. Argentina could
position itself as a global leader in DCF beef by adapting
its current traceability system, as well as leveraging
its strong position in the beef market, to define andtransform DCF beef exports. This could lead to a global
market shift where DCF commodities transition fromdifficult-to-achieve company commitments to a new norm.
Argentina is uniquely positioned to take advantageof emerging market demand for DCF beef due to its
superior product quality, existing traceability systems,
and ability to respond quickly to clear market signals.
Fundación Vida Silvestre Argentina and WWF exploredthe feasibility and potential economic impacts of anational approach for DCF beef in Argentina. This
analysis examined demand, Argentina’s market

Accountability Framework: Aligning
Key Definitions
A key facet of implementing a DCF requirement
entails aligning on what will or will not be included
as prohibited deforestation and conversion. In somecases, limited legal deforestation and conversion
may be allowed, or even appropriate, if it leads torestoration of degraded lands or sustainable grazing
practices with the potential to improve landscapes.
For the purposes of this analysis, the DCF definition
assumed is that proposed by the Accountability
Framework initiative, a collaborative effort to build
and scale up ethical supply chains for agriculturaland forestry products. By working to align on
key definitions, core principles, and operational
guidance, the Accountability Framework is applied bycompanies and governments to move towards moresustainable and ethical supply chains.
Defining Conversion
Change of a natural ecosystem to another land use
or profound change in a natural ecosystem’s species
composition, structure, or function.
• Deforestation is one form of conversion 					 (conversion of natural forests)• Conversion includes severe degradation or the		 introduction of management practices that result
		 in substantial and sustained change in the		 ecosystem’s former species composition, 				 structure, or function• Change to natural ecosystems that meets this		 definition is considered to be conversion 				 regardless of whether or not it is legal

advantage, enabling factors, and challenges todemonstrate that Argentina is well-positioned tocapitalize on this market opportunity while ensuring

China: Driving Global Beef Demandthat key habitats can be conserved.

Demand for beef grew by nearly 30% in the Asia-Pacific

DemandDespite the increasing media attention to plant-based
protein, demand for beef has been steadily increasing

region from 2010 to 2020, largely driven by China,
where demand grew by 5% annually from 2012 to2020.1 As disposable income for Chinese consumers
has increased, meat consumption has grown, and beef

worldwide, driven by rising incomes in Asia-Pacific asalong with it.

well as the Middle East and Africa. Between 2015 andIn 2017, the China Meat Association (CMA) signed

2020, global beef consumption increased by 7% due tothe Chinese Sustainable Meat Declaration, whichrising incomes in China and other developing countries,

committed to deforestation and conversion-free

as well as a growing global population.

animal protein and feed. While this commitment is

1 Argentinian Ministry of Agriculture, Livestock, and Fisheries and The Argentinian Beef Promotion Institute (IPCVA)

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not yet timebound and does not have specific targets

trade war reduced pork exports to China from its

to help achieve it, it represents an important andlargest exporter. As China has struggled to keep up withsymbolic step for the growing Chinese market. In 2020,

demand for pork, it has attempted to fill the gap withWWF China, in collaboration with the CMA, led theother animal proteins. As a result, China’s imports ofdevelopment of an industry-wide standard based on the

animal proteins, including beef, have soared.

Accountability Framework initiative’s (AFi) guidance. The

To illustrate the importance of the Chinese market

standard, which will be published May 2021, includes
recommended guidelines for Chinese meat companies
on the DCF transition. This is particularly significant
given that Argentina is the second largest beef exporter
to China. Additionally, the major players in the Chinese
market are required to participate in the CMA, making
progress within it particularly meaningful for its potential
impact at scale to drive the Chinese market.

to Argentina today, while they exported no beef toChina in 2013, 75% of Argentina’s beef exports went
to China in 2020. Given the long-term impact of pork
and poultry diseases in China, this is a trend that could
continue for ten years or more. Furthermore, Argentina’s
management of the COVID-19 pandemic has resulted
in far fewer interruptions in exports and supply chain
challenges than many other countries, enabling it to

The Chinese Sustainable Meat Declaration is a promisingcontinue to grow its vital trade relationship with China

commitment; however, other factors enhance its

and maintain both trust and service. In addition tosignificance. For a few years, the African Swine Fever

simply buying more volume, China has increased longer-(ASF) and avian flu have severely impacted China’s pork

term contracts (in the 3-year range), and sales of wholeand poultry production. This not only affects China’s

cows when traditionally certain cuts were purchased, as

progress on sustainability goals; it also represents a

the country seeks to ensure a stable meat supply into

national security issue as pork is the most consumed

the future.

animal protein in China. Additionally, the US/China
Figure 2. Commitments in agricultural supply chains have increased in recent years

4Deforestation-free Legislation in Europe

Argentine beef in China in recent years, markets are

In 2020, the European Parliament adopted a report

not always predictable, and charting a path to DCF
production will enable Argentina to add a layer of“calling on the Commission to present an EU legal

credibility and increase demand from the European

framework to halt and reverse EU-driven global

market. This would allow for future stability should

deforestation.” 2 The UK is making similar moves toreduce products associated with illegal deforestationfrom entering the country with a proposed law, which
may go beyond illegal deforestation to more transparent
reporting about commodity sourcing with potential fines
for noncompliance, among other measures.3 Whileneither of these initiatives has yet been backed by legal
measures, they offer a clear signal that Europe is moving
towards codifying that commodities be dissociated fromillegal deforestation.
In addition to these proposed measures, France passed
the French Corporate Duty of Vigilance Law in 2017.

4

market forces prove less advantageous for its beef
products than recent years have shown.
Commitments to Deforestation and Conversion-Free
Sourcing: Lagging Behind
Increasingly, large companies are committing to moresustainable sourcing, including zero deforestation andconversion in their supply chains. Commitments to
DCF products — including animal protein and feed —increased by 28% from 2012 to 2017 and continue togrow. This isn’t surprising: an assessment by CDP foundthat companies sourcing global commodities could

While not explicitly calling out illegal deforestation,lose $53 billion due to deforestation, while addressing

the law requires large French companies to address

forest loss would cost $6.6 billion.5 However, given theadverse planetary impacts of their businesses, which

complexities and opacity involved in sourcing, meeting

can include deforestation. As this law is already inthese commitments is proving difficult. It is costly,

place, affected companies, including large retailers

and there is little to no readily available product. The

such as Carrefour and car manufacturers (for thesale and resale of livestock before animals from many

leather industry), are seeking to address deforestation

producers are co-mingled in common slaughterhouses

and other environmental concerns within their supply

in particular limits traceability, making it difficult for

chains. Given the premium market status from Europe

companies to understand their indirect supply chains.

that typically confers higher prices, these initiatives are a

However, not meeting their commitments poses

strong enticement to get ahead of the curve on ensuring

reputational risks. Despite this, the 2020 Forest 500

exports are DCF.

report assessed that only 57% of the top 500 companies

While Europe is often a first mover on climate andwith forest-related supply chain risk have deforestation-other environmental action, this legislation representsa critical market signal for future commodity sourcing
requirements. But most countries are poorly
positioned to respond to these demands in the nearterm. Argentina has the potential to move quickly on
this opportunity, which would likely lead to growth

related commitments, and 34% of companies with atleast one commitment have not reported on progress in
the last two years.6 While commitments are increasing,
implementation of them throughout supply chainsremains slow and cumbersome, demownstrating theneed for a national approach such as the one proposedin European market share and the potential to draw

here.

funding from multilateral banks for implementation,

In addition to DCF-specific commitments, many

thereby injecting some much-needed capital into a

companies have committed to reducing greenhouse gas

country long troubled by economic instability. Althoughemissions in their supply chains. As deforestation and

ASF and other factors have led to strong growth forconversion are among the most significant contributors

2 https://www.europarl.europa.eu/news/en/press-room/20201016IPR89560/legislation-with-binding-measures-needed-to-stop-eu-driven-global-deforestation
3 https://www.bbc.com/news/science-environment-53891421
4 https://respect.international/french-corporate-duty-of-vigilance-law-english-translation/
5 https://www.bloomberg.com/news/articles/2021-03-22/global-business-seen-facing-53-billion-hit-from-deforestation
6 Ahomson, E., 2020, Time for change: delivering deforestation-free supply chains, Global Canopy, Oxford, UK. https://forest500.org/publications/time-change-delivering-deforestation-free-supply-chains5to GHG emissions globally, reducing these practices

global markets. As the demand for DCF beef increases,

to help achieve more sustainable production is a key

competition for product from areas or producers

long-term strategy for governments and businesses

that have low deforestation and conversion risk maythat could also help meet climate commitments such asprove too much for the current available product to

Nationally Determined Contributions (NDCs) to the Paris

meet these needs. Broader, more scalable solutions

Agreement and Science Based Targets. Furthermore, as

are required to make meaningful progress to increase

natural habitats are lost due to agricultural expansion,

availability of DCF products.

vital ecosystem services — that also help mitigate
climatic impacts — will be lost. Over time, this will reduce
the productivity of biological systems, including thosethat allow us to produce food.

SupplyArgentina is well known for high quality beef andstrong genetic stock (dominated largely by Angus andAt the same time, most companies will not pay more

Hereford breeds). Its beef exports command high prices

for DCF products, but they can offer some incentives for

globally along with New Zealand, Uruguay, Australia,

producers who meet the criteria for their commitments.

and the US. It is also among the top beef producers

Assistance will vary by company but could include

in the world in terms of volume. Additionally, due tolong-term contracts or off-take agreements, preferredsupplier status, access to finance, or other innovative
options. Such incentives are vital to making DCF
production successful by not placing undue burden on
producers who may be least able to afford additionalcosts related to compliance. In the future, companies
might even be willing to buy sequestered or avoided
carbon from producers who did not deforest land thatthey legally could have, or from those who set land aside
for carbon sequestration.

strong biosecurity measures put in place from previous
exposure to hoof-and-mouth disease, beef exports were
not strongly impacted from the COVID-19 pandemic
compared to supply chain disruptions seen elsewhere.
When compared with its neighbors, Argentina stacks
up well, as Uruguay’s and Paraguay’s production aremuch lower due to their respective sizes, and Brazil
lacks Argentina’s traceability strengths and potential forgovernment interest to undertake such an endeavor.
Furthermore, Argentina was the first major exporter ofBased on analysis undertaken by the Boston Consulting

frozen beef globally and exporting DCF beef presents a

Group (BCG) in 2019 as part of this initiative, demand for

new opportunity to redefine global beef exports.

beef from companies with DCF commitments is around
2.7M tons, or 5.7% of the global beef trade. This would
be the equivalent of 86% of Argentina’s production anda significant economic opportunity if its production
can meet DCF requirements. Currently this demand isdriven by a few key global players, but it is unlikely that
this trend will reverse, and, in fact, more companies are
expected to make commitments as they look to mitigate
the long-term business, reputational, and climate risks
associated with sourcing products from converted
habitats. Furthermore, large companies are also pushing
their suppliers towards DCF goals, which has thepotential for cascading impacts across supply chains.
Many companies saw 2020 come and go without
meeting commitments they made for that year, whichwere challenging even before COVID-19 began to impact

Domestic Consumption
Argentina is second only to Uruguay in domestic per
capita beef consumption, making beef an important
staple across the country. As a result, domestic
affordability is a critical market factor that has resulted ingovernment policies to reduce exports and keep prices
low for domestic consumption. These protectionist measures, along with hoof-and-mouth disease, depressed
beef exports and global market share. This situation began to shift in 2016, which led to slow increases in ex
ports up to 2018, now halted again by the pandemic. Atthat point, demand from China for more animal proteincaused beef exports to increase rapidly. Beef exports willcontinue to play a key role in Argentina as long as the importance of beef in the local diet and

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JUJUYSALTAFORMOSACHACO

SANTIAGO DELESTEROTUCUMANCATAMARCA

Satellite imagery reveals the extent of deforestation in the Chaco region.

© NASA Earth Observatory, 2019

concerns about inflation allow beef to remain affordable

System to alert the government of violations against

for domestic consumption.

the Forest law that enabled the country to identify land

Additionally, the European market prefers certainuse change via satellite monitoring. However, the Forest

cuts of beef, while the remaining portions are typicallysold in Argentina. This could create an opportunity tomarket and sell DCF beef domestically, which would

Law does not currently limit habitat conversion moregenerally, and conversion of grasslands is a key concern
in Argentina, particularly in the Pampas and Humid

be attractive to global brands that need to meet

Chaco regions.

commitments locally and then drive further adoption.

According to the BCG study, approximately 32% of land

Despite the rapid growth in exports in recent years,

with high cattle production potential has already been

Argentina’s excess production capacity has enabled aconverted, but another 39% is at high risk of conversion

stable domestic market while also meeting external

since it lacks legal protection. In 2020, the Early Warning

demand.

System worked overtime due to a proliferation of both

Traceability
An outbreak of hoof-and-mouth disease in the 1990s led
Argentina to establish a traceability system to provide
individual animal identification and monitoring fromdeforestation and forest fires, demonstrating that thesystem is effective and able to identify land use changes
well, whether illegal or accidental. The Forest Law anddesire to protect this at-risk area is one of the reasons
Argentina’s traceability capacity is well poised to support

cradle to slaughterhouse, with farms also georeferenced

DCF beef requirements.

by coordinates. In 2007, Argentina also put in place aGiven the possibility of future disruptions, it is pivotal

Forest Law to stop deforestation in medium and highthat Argentina’s traceability system was developed withconservation value areas, which resulted in further

an eye for biosecurity to prevent the chaos that ensued

traceability capabilities, including an Early Warning

after exports were harmed due to their hoof-and-7

Figure 3. The Building Blocks of Argentina’s Traceability System
Animal identification

Farm mapping

Animal tracking

Land-use change

Ear tags are used as uniqueanimal identifiers.

Ranches have unique
ID numbers andgeoreferenced polygons(RENSPA).

Electronic Transit Document(DT-e) tracks cattle
movement from farm toslaughterhouse.

Satellite imagery is used tomonitor land-use change
for compliance with theForest Law.

An interoperable platform could tie it all together
mouth disease outbreak. As the potential success of acommodity-wide DCF approach hinges on government
as well as industry, the Argentine experience has
demonstrated the ability to act in response to crisis
and implement measures to prevent future biosecurity
issues in one of their most important commodities.
However, a challenge of the current traceability systemis that the information generated is not publicly
accessible (although it is available to provincial andnational governments), making further government
collaboration and goal alignment critical to the successof this approach. But while the traceability system will

The Forest Law categorizes native forests

according to conservation value and determines
what activities can occur in each.
Forests are categorized as: 				Low value (green): Land use change 		
allowedMedium value (yellow): Sustainable 		management with no land use changeHigh value (red): Conservation with noland use change

require some updates and enhancements to monitor
conversion in addition to deforestation, and other(via geospatial coordinates on-farm), and land-use

potential buyer requirements, the current system ischange components (via satellite imagery), but that

adequate to achieve export ready DCF beef, adding toan overarching platform would need to be developed

the appeal for external buyers.

ensure interoperability.

In 2020, Fundación Vida Silvestre Argentina contracted

Individual animal traceability is possible from birth

local Argentine consulting firm Genesis to assess

to slaughterhouse. For the concept to succeed,

the traceability system and ensure that it would beslaughterhouses will also need to commit to only accept

able to handle the demands required by buyers and

DCF animals as, once in the slaughterhouse, it becomes

importers of DCF beef to prove that the products would

cost prohibitive to trace individual animals. As a result,be free from deforestation and conversion. The study

the slaughterhouses need to either be wholly DCF or

found that all the necessary components exist within

traceability would be done via lots or delivery days tocurrent systems and protocols to ensure product isthe facility within a given slaughterhouse, as is currently

DCF, contemplating animal (via ear tags), producer

done with Kosher and Halal meat.

8

Benefits for Argentina
Primary among the advantages to moving towards DCF
beef is the potential to unlock finance for the transition.
For a country that has been fraught with economic crises
and volatile financial markets for decades, the chance
to find new ways to bring dollars into the country iscompelling. Traditional commercial banking lacks theappetite do so. However, direct funding from importcompanies, particularly in the critical Chinese andEuropean markets, via trade finance, or in partnershipwith multilateral banks, represent pathways to vital

who are beginning to organize themselves via initiatives
such as the Sustainable Finance Protocol (SFP).
Additionally, with the EU and UK on the verge of passing
legislation requiring products sold within their borders
to be free from illegal deforestation, Argentina could
secure an advantageous position with key premium
markets. Instead of a reactionary approach, the country
can proactively set an example for how DCF products
can be achieved and unlock not only funding, but also
more advantageous relationships with buyers.

financing needs for key commodities such as beef

Collaborationin Argentina. And long-term contracts or off-take

As part of this analysis, WWF and BCG interviewed

agreements also provide assets that can be used toleading companies to understand their sourcing needs

borrow against to obtain the working capital or evenand commitments for DCF beef. A key takeaway was

longer-term investment capital to make the transition

that, given the complexity of supply chains, transitioning

possible.

to DCF is a bigger challenge than individual companies

Public international markets and domestic finance are

can take on alone, even those with considerable

all invested in seeing Argentina’s economy stabilize.
They can aid in this effort through facilitating theinfluence. Pre-competitive collaboration by companies,
and national initiatives such as the one proposed here,

DCF transition via direct investment and de-risking

are critical to making DCF sourcing a reality at scale.

approaches, such as long-term contracts and blended

Initiatives such as the Amazon Soy Moratorium infinance support, among other strategies. This could thenBrazil and various roundtables on sustainable beef

serve as a catalyst for domestic banks and investors,(country-specific and global), including Argentina’s, are

Cordoba Province — Argentine gauchos on horseback riding among herd of Aberdeen Angus cattle.

© JohnnyGreig / Getty

7 https://www.gov.uk/government/news/cop26-brings-countries-together-to-protect-worlds-forests#:~:text=The%20FACT%20Dialogue%20aims%20to,while%20promoting%20development%20

and%20trade.

9demonstrating that through collaboration, progress on

government, business, and communities to achieveenvironmental issues can be achieved. These initiatives

a common goal.8 As many companies reach back in

do not solely tackle deforestation and conversion, which

their supply chains to tackle environmental challenges,

does not affect all beef production globally, but can

individual company action is not enough. Governments

provide some key lessons on bringing stakeholders to

can also benefit from company partnerships that will

the table to set common goals and work towards them.

help them tangibly enforce (i.e., financial benefits via

Furthermore, the Accountability Framework initiative

long term contracts or relationships with producers) the(AFi), of which WWF is a member, has developed a vitalframework to define deforestation and conversion in
supply chains. WWF also created an implementation
toolkit for how to implement and monitor commitments
related to deforestation and conversion. In addition
to AFi’s general framework, there is regional guidance
for the Chaco, which is already being implemented bylaws and regulations that protect habitats. In addition
to government actors, other stakeholders within agiven jurisdiction must be involved in the design andimplementation of the approach. In the approach
outlined in this case for deforestation and conversionfree beef, producers must take part and be key partners
to achieve success.

Danone Argentina and considered by other companies.

Additionally, credible systems are needed in the

The Accountability Framework is a critical framework injurisdiction both to enforce regulations and monitor

the DCF approach to align companies and the Argentine

impacts. In the case of beef, systems must also monitor

government on key definitions and parameters.

leakage from other jurisdictions to the jurisdiction in

Additionally, in February 2021, the UK launched thequestion. For example, slaughterhouses often purchase

Forest, Agriculture and Commodity Trade (FACT)

animals from more than one jurisdiction. As important,

Dialogue 7, to bring together both commodity exporting

animals are often bought and sold and transported

and consuming countries to work towards moreprior to slaughter. Many cow-calf producers sellsustainable production.

weaned calves to other producers who fatten them for

Finally, it is important to note that in beef production,
the entire carcass is used; nothing is wasted. As a result,when considering markets for DCF beef, it is crucial
to engage buyers for every part of the carcass, frompremium high-quality steak to ground beef, leather,slaughter. Setting up credible systems to track animals
from birth to slaughter under these conditions iscomplicated, which gives Argentina a unique advantage,as traceability systems are already in place there at thenational jurisdictional level.

and gelatin. To make the transition to DCF beef viable,

While no roadmap exists for a country to produce

various stakeholders throughout the supply chain need

DCF beef, or any other commodity for that matter,to buy in and see the value of DCF for their portion ofprograms being implemented elsewhere offer key

the market. By leveraging market opportunities acrosslessons about the path to becoming DCF. Ireland’s

the various supply chains related to beef, the likelihood

Origin Green program through Bord Bia, its nationalof successful adoption increases considerably.

food board, is one such program. Origin Green is anationwide traceability program in which food exporters

Jurisdictional Approaches: Driving Change across
Stakeholders

are required to participate. It also collects information

Strong demand and robust supply are necessary

more sustainable production, animal welfare, and otherto transform market dynamics, but alone are not

metrics. And it lets producers see how others achieve

enough without both buy-in and action from relevant

better performance. The program includes on-farmstakeholders. Jurisdictional approaches, especiallyassessments built onto existing Quality Assurance

those at the national level, can represent a robust

infrastructure already in place for food health andform of public/private partnership that brings together

safety.

from each exporter on some critical impact areas for

8 https://c402277.ssl.cf1.rackcdn.com/publications/1145/files/original/wwf_jurisdictional_approaches_fullpaper_web_1.pdf?152045447

10

Horses on the landscape of the El Cachapé ranch and wildlife refuge — Gran Chaco region, Northern Argentina.

© Jason Houston / WWF-US

While not specific to DCF beef production (though it

the country, making progress difficult for initiatives

includes beef), Origin Green represents a successful

such as PCI. It appears deforestation in Mato Grosso

country-wide program that incorporates sustainability

is lower relative to other regions without jurisdictional

principles and standard setting at a national level.

DCF approaches, but rates have still been elevated

Additionally, Bord Bia has invested considerably

given the lack of high-level governmental support forin marketing the program’s traceability and origin

conservation, demonstrating that, while the potential for

attributes, which has led to significant brand recognition

impact of jurisdictional approaches is tremendous, theand export opportunities. Ireland focuses primarilyneed for strong support across various stakeholders canon the quality of the meat, which could also prove a

represent a key challenge. Even with local support forsuccessful strategy for Argentina. During research forthe initiative, national signals working against PCI’s goals

this case, WWF and BCG interviewed various companies

make them difficult to achieve.

that have made DCF commitments, and there was

Most DCF jurisdictional approaches are too nascent toa high level of brand recognition for and interest in
Origin Green, particularly among European companies.
Furthermore, since launching Bord Bia, Ireland’s beefexports grew 24% over 5 years.
Another example of a jurisdictional approach is Brazil’s
Mato Grosso region’s “Produce, Preserve, Include (PCI)”
initiative, which has implemented a pilot for sustainable
beef through the Novo Campo program. The pilot has
shown promising results not only in terms of sustainable
practices, but also in terms of improved productdemonstrate strong results; however, the concept ofbringing together communities, government, and private
sector to co-design solutions, including appropriate
incentives and disincentives, represents a promising
pathway towards meaningful change. Getting the rightactors to the table to discu[ss and agree on goals andforge a path forward together is no small task, and thevast potential for co-benefits merits further investment
into the concept.

quality and quantity of beef. However, the Brazilian

Status of At-risk Areas

government’s environmentally detrimental policies

Within Argentina, most beef production takes place inhave led to an increase in deforestation throughout

areas that have either been converted long ago or are at11low risk for conversion. Around 18% of beef-producing

on DCF sourcing commitments. Coupling the benefits

farms and 13% of animals (SENASA, 2020) are in the fourof DCF with other consumer concerns, such as ethicalmain Chaco provinces (Chaco, Formosa, Salta, Santiago

or sustainable production, may increase the level ofdel Estero).

interest and success in promoting DCF production. If,

There is still a significant and relevant portion of theas alluded to above, the tie between DCF and reducing

country that is at risk for deforestation (19%) andconversion (45%) that needs to be protected (INDEC.

carbon emissions can be drawn more strongly,
consumer education and interest can likely be advanced

Censo Nacional Agropecuario 2018. Preliminary results).

more quickly.

However, relative to other beef-producing countries,

The DCF beef concept proposed here involves full

the overall footprint of at-risk land is not as high of acompliance with Argentina’s Forest Law, as well as the

proportion within the country. This makes Argentina

addition of another law(s) to incorporate protection ofan excellent test case given that there is a high-risk but
lower landmass area that needs protection, making
design and control for this initiative less cumbersome
than it would be in a country such as Brazil, for example.

Challenges
Transitioning to a DCF beef export market will not beeasy. And, despite the possibility of long-term economicand environmental benefits, the transition will require
up-front investments. One of the findings of thisresearch was that, although there is a high level ofinterest from global companies in DCF beef, it is unlikelythat they would pay a premium for DCF products. As
a result, it is essential to identify other incentives for
producers and innovative strategies to cover the costsof transitioning to DCF beef. Alternatives such as market
access, competitive financing, and long-term contracts
are examples of potential benefits that may reduce
the economic weight of transition. Government-led
incentives during the transition could also ease theburden as producers begin to see the medium andlong-term benefits.
While some consumers care about sustainableproducts, decision-making based on DCF products
like beef is still nascent to non-existent. Consumers
are not well-informed about the meaning of DCF,
complex supply chain issues, company commitments,
or where companies stand in relation to meeting theircommitments. Consumer education regarding theimportance of DCF sourcing to the protection of habitats

other at-risk habitats such as grasslands, and relies,in part, on legal repercussions for failure to comply.
However, legal measures are only truly effective whenlaws are enforced. Therefore, enforcement and a strong,or at least adequate, legal system are key to enacting
DCF beef as a country-wide export condition.
While this opportunity represents many possibilities forthe country, some producers with land in or adjacent tohigher-risk habitats will be more impacted than thosein areas already heavily deforested or in areas with landof low conservation value. The design of appropriate
incentives and safeguards to support producers where
the opportunity costs of complying with the program
are high will be critical to the success of this program.
Additionally, training to support and encouragesustainable intensification of production in existing or
degraded pastures is essential to ensure the country canmeet growing demand without converting additional
forests.

Conclusion
The COVID-19 pandemic has highlighted the urgencyof adaptability. Old business models will not ensure
future success, and there are more disruptions tocome. Transforming commodity markets to remove
deforestation and conversion from supply chainsrepresents a way to see commodities in a new light, thatof enabling environmental and economic benefit rather
than exploiting them.

and species, as well as the mitigation of climate change,

There are many factors that would allow Argentina

could increase pressure on companies to make progress

to position its beef exports as DCF with minimal

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investments, setting the country up to be a pioneer inAgreement while also creating market opportunities.

this space. Argentina has significant forested area at risk

Furthermore, Argentina could later expand the programof conversion, as well as high quality beef, legal systems

to other commodities, gaining first mover advantage andto monitor and reduce deforestation, and an existingpushing other countries to move in the same direction,

traceability system that could help turn this opportunitye.g., meet buyer expectations to shift towards more

into a reality. Taking advantage of existing systems andsustainable sourcing.

infrastructure and re-using or repurposing to solve other

If Argentina presents a compelling country level example

complex challenges is something we will all need to doof how to transition supply chains to DCF beef, whatmore of as the climate changes.

could that mean for other countries? By viewing DCF

Argentina has demonstrated adaptability to meeting

beef as a market opportunity and supporting producers

both market demands and needs for biosecurity
through overcoming past challenges and continuing
to grow exports during the COVID-19 pandemic.
With imminent EU legislation banning products fromdeforested habitat, and the potential to make anargument for a DCF product, the time to act is now. To
take this national level jurisdictional approach forward,
convening the right stakeholders — government,
producers, industry, and NGOs — to discuss how tomake it happen is critical. The opportunity is not withoutrisk, but the climate and biodiversity loss crises demandbold solutions to confront these challenges.
By leading with beef, Argentina can position itself

in steps to achieve it, governments can leverage criticalinfrastructure and precious resources to affect change
at a meaningful scale. Companies are clamoring for
support in achieving ambitious DCF commitments,
yet there is a considerable disconnect between
government realities and corporate-led initiatives.
National approaches such as the one proposed here
demonstrate that the two need not be mutually
exclusive: governments can work towards climate goals
while strengthening economies through market-based
solutions like DCF beef exports.
Katherine Devine, Director, Business Case Development
Markets Institute, World Wildlife Fund
Katherine.Devine@wwfus.org

as an innovator, improving market share of global
beef exports while credibly addressing sustainability
issues like deforestation. This would allow Argentina
to meet some of its commitments to the Paris Climate

Celebratory toast with family at the traditional midday meal in Buenos Aires.

© AzmanL / Getty

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