09 April 2008

Soy Moratorium Working to Protect Amazon

Lisa Raffensperger
Earth Trends - Mon, 2008-04-07 00:32
Original URL

Amazon rainforest cleared for soybean plantingIn July 2006, Brazil's biggest soy traders enacted a two-year moratorium on soybeans grown in newly deforested areas of the Amazon. It was groundbreaking for the way in which it was accomplished--rather than Brazil's government enforcing the ban, it was NGOs and giant soybean buyers that pressured the change. Now, a new report says the market approach seems to be working. Researchers found no soybeans in large areas of the Amazon cleared between August 2006 and August 2007--which means, at a broad glance, that more rainforest isn't being cut down to grow soybeans.

Soybean croplands in Brazil have been expanding for decades, but the most dramatic rise has been in the last six years (see Figure 1). Brazil is now second only to the United States in soybean production, and is the world leader in soybean exports. A large portion of these exports are directed to Europe where they serve as animal feed.

Figure 1. Area of Soybean Cultivation, Brazil, U.S., and World

Graph of Area of Soybean Cultivation, Brazil, U.S., and World

Source: EarthTrends, 2008 using data from FAOSTAT, 2008

Like other forms of unregulated agriculture in Brazil, rapidly expanding soybean cultivation threatens the tropical rainforest. However, the threat of soybeans to the Amazon is distinctly different from the slash-and-burn agriculture and cattle ranching that predated it and that still continue.

The difference, Greenpeace says, is in the business model. There are two main features that are fostering the rapid expansion of soybean farming:

  • Land seizures are large. Farmers aren't smallholders, as has historically been the case, but are deforesting thousands of acres at a time using heavy equipment and many workers.
  • Farmers are backed by heavyweight corporations. The companies who've agreed to the moratorium--U.S.-based Cargill, Archer Daniels Midland, and Bunge--provide 60% of the financing for Brazil's soybeans. These international giants prop up Brazilian farmers, Greenpeace argues, by ensuring access to cheap credit, providing seeds and chemicals, and guaranteeing markets for their harvests. It's these incentives and resources that allow farmers to clear huge parcels of land or buy occupied land and clear it. In addition, these private corporations are funding infrastructure expansion, especially roads, through the Amazon, which encourages farmers to move into virgin areas of forest.

According to Greenpeace, in 2004-2005, only 5% of Brazil's total soybean crops were planted in the Amazon. But there is great potential for expansion, given the infrastructure already in place. And ultimately, this 5% was enough for overseas buyers of Cargill's soybeans, including McDonald's, to pressure the company to accept the two-year moratorium.

An Unspoken Contributor

However, another force at work in the deforestation lull could be recent soybean prices. Soybeans are selling for three times more than their 2001 low, and more than double what they were just two years ago. So, a reprieve from deforestation to plant soybeans in 2006 may not hold under 2008 prices.

Research bears out this correlation. A study of deforestation from 2001 to 2004 in Mato Grosso state, Brazil--a focus region of the moratorium, since 90% of rainforest soybeans are grown there--found that the rate of deforestation was directly correlated with the price of soybeans (see Figure 2).

Figure 2. Deforestation and Soybean Price

Graph of Deforestation and Soybean Price

(Data for 2005 were a preliminary estimate)
Source: EarthTrends, 2008 using data from Morton, et al., 2006

The steeply rising price of soybeans may present a challenge to the continued success of the moratorium. Overall Amazon deforestation is rising again, after declining for three straight years. So whether soybean farmers will still cultivate existing cropland, rather than burning down forest and selling to corporations outside the moratorium, remains to be seen.

Top photo by leoffreitas via Flickr

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