- Businesses and countries are renewing their commitments to reducing deforestation in supply chains, but disagreements still exist over what the most effective, efficient and equitable tools are to make that happen.
- In the Brazilian Cerrado, the world’s most biodiverse savanna, soybean production is one of the key industries driving rampant deforestation and conversion of native vegetation.
- While some observers favor the “carrot” approach of paying farmers not to deforest, others advocate for a “stick” approach that would cut market access for farmers who deforest.
- A new study says that in the case of the Cerrado, just using a stand-alone policy that pays farmers not to deforest would be expensive, inefficient and inequitable, and that some measure of market exclusion is also needed.
During last year’s COP26 climate summit in Glasgow, more than 140 countries committed to halting and reversing deforestation by 2030. The Glasgow Leaders’ Declaration on Forests and Land Use recognized the critical role of all forest types for biodiversity, sustainable land use, and mitigating and adapting to climate change, among many other benefits.
This was just the latest in a growing list of attempts by governments, traders, supermarket chains, and multinational companies to limit or wipe out deforestation from supply chains under so-called “zero-deforestation” pledges — essentially making sure that commodity production doesn’t come at the expense of razing forests and other important ecosystems.
While on paper these pledges look good, there’s still significant debate over what the best tools are to achieve zero deforestation. One of the biggest debates is over whether to use the carrot or the stick approach; is it better to pay producers not to deforest, or punish them when they do by excluding them from the market?
“There are all these commitments but no specificity about how to achieve the goals and how to do it without exacerbating other problems,” Rachael Garrett, an assistant professor of environmental policy at ETH Zürich, told Mongabay in a video call. “At this point as scientists we know a lot more than we did [when the first zero-deforestation commitments were made]. It is time to renew these commitments with far more specificity about how.”
To do that, Garrett co-authored a study last month in World Development, looking at the effectiveness, cost, and legitimacy of paying farmers not to deforest in the Cerrado, a diverse wooded savanna that covers more than a fifth of Brazil’s landmass but which has lost more than half of its native vegetation in recent decades. Much of this loss has been driven by agricultural expansion. Using predictive estimates based on available data, studies, and in-person interviews, the authors raise concerns that just paying farmers not to deforest would be ineffective both in impact and cost, and inequitable. Instead, they argue that paying farmers not to deforest would need to be accompanied by a scheme that also punishes farmers growing soy on deforested land.
Soy-driven deforestation in the Cerrado
Along with a handful of other commodities, like palm oil and cattle, soy is one of the largest drivers of tropical deforestation in the world. The nutrient-rich legume is the world’s largest source of protein for animal feed and the second-largest source of vegetable oil after palm. Brazil has rapidly increased soy production in the last two decades, becoming the world’s top producer of soybeans. More than 36 million hectares (89 million acres) of land in Brazil is dedicated to growing soybeans, with much of the crop exported to China and Europe for animal feed.
But this growth has come at a cost. Soy expansion has razed vast swaths of forests, grasslands and other ecosystems. It’s been especially devastating in the Cerrado, one of the least protected biodiversity hotspots in the world. The Cerrado is home to 5% of the world’s biodiversity and is a crucial biome for regulating the watersheds that provide 40% of Brazil’s fresh water, as well as acting as a substantial carbon sink.
In other biomes, like the Amazon, a moratorium on buying soy from deforested land helped to reduce deforestation by around 1.8 million hectares (4.4 million acres). The moratorium worked by excluding from the market those soy farmers who had cultivated their crop on land cleared before 2006. At the same time, it also incentivized them to grow soy on land that was already degraded rather than chopping down existing forest. But this policy didn’t extend to the Cerrado.
In 2017, a broad coalition of stakeholders put forth the Cerrado Manifesto, effectively pushing for a similar moratorium on soy in the Cerrado. But the six large soy traders that account for more than half of exports — like Cargill and Bunge and the country’s grain industry association, Aprosoja — have been staunchly and vocally opposed to any kind of moratorium. Now, companies and other private actors and NGOs are increasingly pushing for incentives that would pay producers not to deforest, known in policy parlance as “payments for ecosystem services” (PES).
Garrett’s study estimates that, based on the funding goals of the signatories of the Cerrado Manifesto and industry supporters, paying soy farmers to protect forests would at best protect around 200,000 hectares (494,000 acres) from five years of soy-driven deforestation pressure. Implementing a more comprehensive scheme could cost companies and the federal government more than $2.6 billion per year. Paying farmers would likely exacerbate existing income inequality in the Cerrado and continue to reward those actors who are prone to deforest rather than those who already make efforts to keep forests standing, the study says.
But the most concerning impact of a stand-alone PES scheme is the impact it could have on conservation values that already exist, Garrett said. “What’s so difficult about this is that, in principle, everybody’s for carrots — nobody wants to only use sticks,” she said. “But the implications of carrots versus sticks are not necessarily always thought about. When you switch to paying people, you change the whole game.” Paying soy farmers not to deforest would likely increase the sense that exists that they have a right to deforest, and could change the intrinsic conservation motives of the many other farmers and land users that are already conserving native Cerrado ecosystems and not getting paid for it, Garrett added.
While a moratorium also faces equity and legitimacy challenges, the authors conclude it would be more effective because farmers would have less choice about whether or not to conserve legally clearable areas. It would also be more cost-effective. A moratorium could help push farmers to cultivate on the more than 36.8 million hectares (90.9 million acres) of degraded land that was cleared prior to 2008 and is suitable for soy farming but is currently used for other purposes, including cattle pasture. Instead of simply paying soy farmers, an effective PES scheme could be targeted at restoring areas that would provide the largest biodiversity conservation gains, the authors added.
Karina Marzano, a fellow at the Institute for Advanced Sustainability Studies in Potsdam, Germany, who researches the intersection between climate and trade and who wasn’t involved in the new study, said the research is timely, given how much less protected and regulated the Cerrado is compared to Brazil’s other biomes. “The authors were able to provide a comprehensive and very detailed outlook of the complex reality of the Brazilian Cerrado,” she wrote in an email to Mongabay. “The article shows that [in contrast to] what some powerful stakeholders in Brazil have been arguing, PES schemes are no silver bullet and have important limitations and negative distributional impacts too.”
Mairon G. Bastos Lima, a research fellow at the Stockholm Environment Institute who has researched and written extensively on supply chains and agricultural development in the Cerrado, told Mongabay that this paper made an important contribution to the debate. But he added the debate needs to expand beyond just thinking about incentives and disincentives.
“We can’t just be thinking about a moratorium or PES — it’s a poor repertoire of options and we need to be more creative than that,” he told Mongabay in a phone interview. Any solution that would pay farmers, he said, needs to also include people who grow other products, and should focus on sustainable development as a way to hedge against the unfettered expansion of crops like soy. “The Cerrado is far from being soy versus wilderness,” he said. “There are a lot of other products being grown and much more sustainably.”
Banner image: Cows graze on a recently harvested soy field in the Brazilian Cerrado. The expansion of soy is tightly coupled with the expansion of cattle. Image courtesy of Samuel Levy.
Garrett, R. D., Grabs, J., Cammelli, F., Gollnow, F., & Levy, S. A. (2022). Should payments for environmental services be used to implement zero-deforestation supply chain policies? The case of soy in the Brazilian Cerrado. World Development, 152, 105814. doi:10.1016/j.worlddev.2022.105814
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