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Cargill rejects Cerrado soy moratorium, pledges $30 million search for ideas

  • The 2006 Amazon Soy Moratorium — a voluntary agreement credited with stemming deforestation in the Amazon due to soy growing over the last decade— is the model put forth in the 2017 Cerrado Manifesto, intended to catalyze action to stop rampant clearing of forests and native vegetation in the savanna biome.
  • But now Cargill, a trading firm active in the Cerrado, has published an open letter to its Brazilian soy producers avowing that it will not support a soy moratorium in the savanna biome. Bunge, Archer Daniels Midland, Amaggi and other commodities firms have been resistant to the Manifesto’s call to action as well, which could doom it.
  • Cargill’s nixing of a Cerrado soy moratorium came after the firm announced its sustainable soy action plan, along with a $30 million fund to limit Cerrado forest loss, and amid international pleas to curb Brazilian deforestation prompted by the new EU / Mercosur (Latin American economic bloc) trade agreement.
  • One possible reason Cargill and other commodities firms and producers are resisting the Cerrado Manifesto: under the Amazon Soy Moratorium producers simply moved their operations out of the Amazon and into the Cerrado. But the Cerrado Manifesto would prevent further deforestation for soy in the biome, potentially curbing rapid production expansion there.
A tractor ploughs up newly deforested land in the Cerrado, Brazil’s savanna. Experts say there is plenty of degraded land in the Cerrado that could be brought into cultivation, without further deforestation, allowing for soy expansion. Photo by Jim Wickens, Ecostorm / Mighty Earth.

June proved to be a month of mixed, and contradictory, soy signals from Cargill, the largest privately owned company in the U.S., and Brazil’s second largest soy trader. The firm has extensive soy operations in the Cerrado — a biodiverse savanna biome experiencing rapid deforestation as agribusiness converts vast areas of native vegetation for cattle and crops.

Last month, Cargill announced its ambitious soy action plan, committing the firm to transforming its “supply chain to be deforestation free, while protecting native vegetation beyond forest.” Included in that plan was a $30 million fund to source ideas to protect Brazil’s Cerrado biome.

Then Cargill’s CEO posted an op-ed saying that the industry as a whole is poised to fall short of the goal of the New York Declaration on Forests, of which Cargill is a signatory, to halve deforestation by 2020 in key supply chains, including soy, while recognizing the urgent need to reduce native vegetation clearing in the Cerrado.

Coming as an even bigger surprise was an open letter from Cargill to Brazilian soy producers published online on June 24th, stating the company’s steadfast opposition to a proposed Cerrado soy moratorium. Environmentalists say that such a moratorium (as called for in the Cerrado Manifesto), would build on more than a decade of conservation success achieved by the Amazon Soy Moratorium, widely acknowledged for its key role in reducing deforestation in that biome since 2006.

“Cargill has just announced the creation of a $30 million fund to seek and foster innovative ideas that will contribute to ending deforestation in the Cerrado biome, [while] at the same time supporting the prosperity of rural producers and local communities,” wrote Cargill in the letter. “In a very objective way, the creation of this fund does not change the company’s position of being against the creation of a ‘Cerrado Moratorium’ and of continuing to participate and contribute… to the Cerrado Working Group (GTC).”

But critics argue that Cargill can’t have it both ways. They say that the long-term solutions needed to curb Cerrado deforestation already exist in the Amazon Soy Moratorium model, and that by refusing to consider any kind of moratorium in the Brazilian savanna, as called for in the Cerrado Manifesto, Cargill is pandering to its producers. At the same time, the firm will be able to publicize its $30 million deforestation idea fund as proof of Cargill’s green credentials in PR to consumers.

“Cargill is trying to position itself as being concerned about the wholesale destruction of Brazil’s forests while at the same time not taking any action to address it,” Says Glenn Hurowitz, CEO of the environmental advocacy group and NGO Mighty Earth. “Their desire to be seen as sustainable while maintaining links to the worst deforesters in Brazil is at the heart of these contradicting statements.”

In a written response to a Mongabay query, Cargill wrote: “We don’t support a [Cerrado] moratorium that simply cuts off farmers for exercising their legal land rights. We do support working alongside our industry to consider short term actions that would support farmers so livelihoods are not adversely impacted, as the wider industry considers how to provide longer term solutions.”

Signs of the times: Bunge and Cargill logos planted in Cerrado soil. The support of the big commodities companies for the Cerrado Manifesto is crucial to its success, but hasn’t been forthcoming. Photo by Jim Wickens, Ecostorm / Mighty Earth.

Soy’s increasingly concerning footprint

Soy is becoming a hot topic. It is one of just four crops responsible for around 75 percent of deforestation worldwide, with a disproportionate amount of that native vegetation loss occurring in the Brazilian Cerrado biome, bordering on the Amazon. Pressure has been mounting on the European Union (EU), one of Brazil’s largest trade partners, to create strict legislation regulating deforestation from agricultural supply chains. That pressure is bound to grow as EU nations consider ratification of the just completed Eu / Mercusor (Latin American economic bloc) trade agreement, which was 20 years in the making.

However, enforcement of any such Cerrado deforestation agreement would almost certainly need to be entirely voluntary, because much savanna deforestation is legal and so would require a sign-on from the handful of large transnational soy traders that operate in the Cerrado, including Cargill, Bunge, Archer Daniels Midland (ADM), Louis Dreyfus and Glencore Agriculture. Amaggi, a large Brazilian commodities firm also is active in the biome.

The 2017 Cerrado Manifesto call for action has been hailed by some environmentalists and retail companies, including McDonalds, Tesco, Unilever and Walmart, as a means of earning the Cerrado the environmental recognition and conservation it deserves. “The Manifesto represents a significant breakthrough in civil society consensus that there’s no need to destroy native ecosystems for soy,” Hurowitz told Mongabay in a past article.

The Manifesto falls just short of demanding a Cerrado soy moratorium, recognizing instead that “Collaboration between different links of the production chain…. was the path taken by the [Amazon] Soy Moratorium, and should now inspire similar solutions in the Cerrado.” But without the backing of large-scale industrial agribusiness and the transnational commodity companies — most of which have not signed on – the Manifesto lacks the teeth to actually implement any tangible action to stem deforestation in the Cerrado

Ongoing resistance from companies to the Manifesto is likely because soy is Brazil’s most valuable export commodity, which complicates any possibility of limiting its contribution to ongoing deforestation. Cerrado producers are at the heart of Brazil’s agribusiness lobby, and they make up one of the core groups in Jair Bolsonaro’s political base — the current Brazilian president ran on a platform of increasing rural agribusiness development and decreasing environmental protections.

Cargill, in an email to Mongabay, stated that its recent open letter was in response to “questions we received from local Brazil farmers to provide clarity and help them better understand our initiatives.”

Recent native vegation clearance in the Cerrado. Photo by Jim Wickens, Ecostorm / Mighty Earth.

Legal deforestation

One of the thorniest issues regarding Cerrado deforestation is that, unlike the neighboring Amazon, much of the land clearing that has occurred in the savanna already was legal under the Brazilian Forest Code. And much of the remaining native vegetation could be cleared legally as well, “which means that improving public [regulation] enforcement efforts will not save the Cerrado,” says Lisa Rausch, an associate researcher at the Gibbs Land Use and Environment Lab at the University of Wisconsin-Madison, USA.

According to research by Rausch and colleagues,  over 38 million hectares (94 million acres), or 1/3 of the Cerrado’s remaining vegetation that lies outside of protected areas can still be cleared legally. And up to 15 million hectares (37 million acres) of this vegetation is on land suitable for soy.

“However, very little of this suitable vegetation is on properties that currently produce soy; most of it is at risk from the potential opening of new properties for soy,” says Rausch. “Our research on the Cerrado shows that soy expansion is a leading driver of native vegetation [destruction] in that biome.”

Farmers are only required to keep 20-35 percent of native vegetation intact on their land across much of the Cerrado, in contrast to Legal Amazonia, where farmers must preserve up to 80 percent under the Brazilian Forest Code. Still, while much Cerrado clearing is legal, illegal clearing also happens. In May of last year, IBAMA, Brazil’s environmental agency, fined grain exporters and farmers, including Cargill, R$105.7 million (US$29 million) for illegal deforestation.

“Cargill feels pulled in both directions,” explains Hurowitz. “They want to be on the good side of their soy growers, and they are afraid [other commodity traders] will step in and buy the soy if they don’t. Ultimately, they are stuck between their customers and their producers — which means inaction. And the bulldozers keep coming.”

Legal Amazonia encompasses all of the Amazon biome, plus a portion of the Cerrado biome. The Amazon Soy Moratorium of 2006 covers only Legal Amazonia, and part of the Cerrado. Under the Brazilian Forest Code, farmers are only required to keep 20-35 percent of native vegetation intact on their land across most of the Cerrado, in contrast to Legal Amazonia, where farmers must preserve up to 80 percent. Image by Mauricio Torres.

What’s good for the Amazon could be good for the Cerrado

Many environmental groups and retailers are adamant that Cerrado deforestation solutions already exist in the proven solutions demonstrated in the Amazon.

Two years after Amazon deforestation hit a peak in 2004, environmental groups including Greenpeace, members of the Brazilian Vegetable Oil Industry Association (ABIOVE), and major soy traders like Cargill, as well as large retailers like McDonalds came together to form what is widely considered one of the most successful voluntary zero-deforestation initiatives ever. The Amazon Soy Moratorium is today credited with reducing deforestation from soy production in the Amazon basin rainforest by as much as 80 percent in some areas. The pact got soybean traders like Cargill to agree to voluntarily stop purchasing soy from farmers who clear forested land after July 2008.

Fast forward a decade to 2017 when the Cerrado Manifesto was created to catalyze urgent action to stop deforestation from soy and beef supply chains in the savanna.

Now supported by over 70 companies, the manifesto, calls for what in effect would be a soy moratorium for the Cerrado.

But experts agree that success is unlikely without sign-on from major soy traders. COFCO, the Chinese state-owned soy and grain trader and a relative newcomer to the region, has announced its support for the extension of deforestation-curbing initiatives like the Amazon Soy Moratorium to the Cerrado, and Louis Dreyfus, another major trader, has also signaled that it is willing to more aggressively combat Cerrado native vegetation loss. However, Cargill’s recent letter plants the company firmly in opposition to a moratorium.

One possible reason why: studies have shown that the success of the Amazon Soy Moratorium came at the cost of Cerrado deforestation. When the moratorium went into effect, big commodities companies and big producers shifted their operations from the Amazon, east and south into the Cerrado; as a result there was no loss in production, while the move largely ended public outcry against commodities firms’ rainforest devastation. However, the Cerrado Manifesto would block deforestation in the savanna biome and potentially curb rapid expansion by producers there.

“At a time when Brazil’s forests are being churned up and indigenous peoples are being displaced by its suppliers, Cargill continues to embrace business as usual — even as concerned Brazilians and its own customers demand solutions to this environmental and human rights crisis,” Hurowitz wrote in an online statement.

Banner image: Cargill silo and sign in the Cerrado. Photo by Jim Wickens, Ecostorm / Mighty Earth.

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A scorched animal skull revealed in the aftermath of a fire. Fire is often used as a tool for converting forests and other native vegetation to croplands in Brazil. Photo by Jim Wickens, Ecostorm / Mighty Earth.
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