Why Is BIC Opposing an IDB Loan to Brazilian Beef Exporter Marfrig?

Recent research by BIC and partners has found that industrial livestock operations, of cattle in particular, are continuing to result in illegal deforestation in the Brazilian Amazon, but this is just one of the multiple ways in which these operations are harmful to people and the planet. BIC is opposing a proposed $43 million loan to Marfrig Global Foods for multiple reasons: 

1. Continued deforestation: This loan will lead to further deforestation in Brazil’s Amazon and Cerrado regions. Cattle production is the largest driver of deforestation in the Amazon. While IDB Invest aims to support Marfrig’s plan to reach “100% deforestation-free” production by 2030, in the current decade, this investment would support a company that continues to drive deforestation at an alarming rate.  Moreover, under its plan, Marfrig would still be allowed to deforest primary forest plots of up to 15.4 acres each, and have no restriction on cutting down secondary forests. 
2. No need for public funds: Marfrig, the 2nd largest beef producer, recently invested $969 million to acquire an 81 percent share in the National Beef Packing Co. Clearly, it has access to ample commercial funding. It has no need for scarce public investment funds to implement its own sustainability plans. 
3. Corruption, Land-Grabbing, Human Rights Violations: Multiple sources report Marfrig’s involvement in corrupt practices and failing to meet legal commitments. More than a decade ago Marfrig promised to develop tools to eliminate illegal deforestation and forced labor from its full supply chain. Yet as documented in a 2021 Greenpeace report, Marfrig still has “no fundamental procedures” in place to guarantee that cattle from ranchers linked to environmental destruction or legal violations are excluded from its supply chain, and has repeatedly failed to track land-grabbing and human rights abuses against indigenous people within its supply chain.  Rather than correcting abuses, it has paid fines: in 2018, Marfrig was ordered to pay 8 million reales for “administrative misconduct” in Mato Grosso.
4. Lack of government oversight: The Brazilian government’s alarming decimation of social and environmental laws and protections, Indigenous rights, and resources in the Amazon region should lead all MDBs to refrain from financing projects and companies that take advantage of Brazil’s weakened legal protections, especially at a time of massive forest fires, biodiversity loss, and human rights violations in Brazil. 
5. Bad for food security, livelihoods, global health: Financing industrial livestock production like Marfrig’s is counterproductive for combating hunger and ensuring food security since it uses far more fossil fuel and water inputs than agroecological, regenerative, or mixed (agroforestry, silvopastoral) production systems. It also degrades local and Indigenous communities’ water, soil, and other natural resources essential for food production. Industrial livestock overuse of antibiotics increases the threat of antimicrobial resistance, already responsible for 700,000 deaths a year worldwide,  and its concentrated operations increase the potential for zoonotic diseases — a top pandemic risk. 

Instead of investing in harmful factory farming, we would suggest that the IDB and IDB invest to take the following steps:

1. Shift agricultural investment portfolios to support 100 percent sustainable agricultural approaches like agroecology and other regenerative processes that meet the eligibility criteria for land degradation neutrality projects. The IDB Group has developed an Amazon “Bioeconomy” Initiative to promote sustainable agriculture and livestock. While more details on this fund are needed, a loan to Marfrig appears to be a clear contradiction to what the IDB claims it wants to promote in the Amazon.
2. Establish a biodiversity action plan that recognizes the drivers contributing to biodiversity loss and destruction of ecosystems and vital carbon sinks, and supports the protection of land from conversion or exploitation. Establishing, expanding, and effectively enforcing reserves and restoring native ecosystems on spared land offers the most effective way to preserve and restore biodiversity and ecosystem stability. 
3. Work with both the public and private sectors to develop and deploy the monitoring, reporting, and verification systems needed to credibly commit to zero deforestation supply chains covering both direct and indirect suppliers, to update the Performance Standards implementation guidelines to reflect this and clarify borrowers’ responsibility for their full supply chains, and to adopt policies that are beneficial to local communities. 
4. Mainstream nature-based solutions into the IDB agenda and Regional Member Country Strategies and their national development plans. Sustainable farming (agroecology, organic farming, etc.) and forestry practices must begin by aligning national development plans and agricultural and forest management policies with the Paris Agreement and Sustainable Development Goals.

For more information on the Divest Factory Farming Campaign and BIC’s engagement with the IDB, please read the following resources:  

Read the letter from 200+ CSOs to the IDB Board urging it not to approve the proposed $43 million loan for Marfrig Global Foods.  Read the open letter from CSOs calling for MDBs to immediately divest from all industrial livestock operations. Read the Guardian op-ed,  To fight the climate crisis, banks must stop financing factory farming.

See BIC’s updates on How the Inter-American Development Bank can prioritize Indigenous Peoples, Afro-descendants, and forest protection in the Seed Program for Sustainable Development in the Amazon; the briefing to Congress on the IDB Amazon Initiative by BIC and partners; and whether the IDB is supporting Indigenous, Afro-descendants, and traditional communities’ rights in its Amazon Initiative.