South America and China Seek to Standardize Soybean Supply

More than 50 public, private and civil society leaders from Brazil, Argentina, Paraguay, Bolivia and China joined together to agree on a common landscape governance agenda. The event, which took place in the city of Belém, Brazil on 13 to 15 November, focused on monitoring changes in land use and controlling illegal deforestation related to soy farming. Seven principles were established by the group for a succesful land governance system that can be adapted to the needs of the represented countries.

The Agricultural Outlook 2017-2027 published by the Organization for Economic Co-operation and Development (OECD) in partnership with United Nations Food and Agriculture Organization (FAO), forecasts an increase in agricultural land use in Latin America and the Caribbean of 11 million hectares, 62% of which are represented by soybean – led by Brazil and Paraguay.

The effects of soybean farming

In this context, Trase 2018 Yearbook data demonstrate the connection between soybean production and the risks of deforestation and reveals how producers, companies and consumers can use this opportunity to create a deforestation-free economy.

According to the yearbook, the region of Matopiba (Maranhão, Tocantins, Piauí and Bahia)  is the most threatened in Brazil due to the increase of soybean production for export. Data from the Agricultural Atlas of Imaflora estimates that between 2001 and 2017, soybean expanded by 310% only in Matopiba, with 65% of this expansion replacing native vegetation, unlike the rest of the Cerrado areas, where soy expanded primarily over pasture lands (70%).

In order to discuss how to integrate and harmonize the monitoring of land use changes and using control tools in South America, Solidaridad facilitated the second “China-South American Soy Value Chain Brazil Study Tour” held in Belém (PA) between 13 and 15 November. The event brought together 53 leaders from the public, private and civil sectors of Brazil, Argentina, Paraguay, Bolivia and China to a meeting on responsible soy trade, including:

  • General Director of the Forest and Land Management State Agency (ABT) of Bolivia, Thelmo Muñíz Rodríguez
  • Secretary of Environment and Sustainable Development of Salta province in Argentina, José Cornejo
  • National Congressman and Chair of the Ecology, Natural Resources and Environment Committee at the Paraguayan Congress, Pastor Soria

Divided into three phases, the main objective of the meeting was to present the policies and tools each country has developed to control and monitor changes in land use and to identify opportunities for developing a joint cooperation or financing agenda between South American countries and China.

The Brazilian example

The programme was opened with a meeting at the “Palácio dos Despachos”, headquarters of the Pará State Government, in the presence of the Secretary of Environment and Sustainability, Thales Belo, and the General Director in charge of the execution of the Green Municipalities programme, Maria Gertrudes Oliveira. Participants learned about the strategic actions and environmental monitoring tools of the “Green Municipalities” programme, and their relationship with the BNDES Amazon Fund.

Visit to SEDEME, where the group could see satellite images in real time. The satellite system used in Pará allows for close-up imaging down to 3 square meters, identifying native forests and even tree species.

Brazil is the only country, among those that participated in the tour, that has an environmental registry (CAR – Rural Environmental Cadastre). Maria Gertrudes Oliveira pointed out that the Pará monitoring system is the first of its kind and was adopted by the federal government.

“In November, the CAR will turn 10 years old and we expect it to remain a state policy. Our staff is willing to support neighbouring countries to design environmental records and think of short or long-term solutions according to needs and context,” she said.

Maria Gertrudes also explained that, although there may be differences between country registers, there are a number of fundamental principles which are decisive in the success of the system and can serve as an example to other countries:

  1. Political will maintained by a committed manager
  2. A system that combines authorization (who is performing unauthorized land use) and evidence (quality of satellite images)
  3. Market pressure maintained by companies committed to buying only from registered producers
  4. Transparency (both internal and external)
  5. Traceability through external audits
  6. Governance with multi-stakeholder dialogue and customized communication targeted at different actors, from producers to financial institutions
  7. Accessibility of data via a simple platform that can facilitate the work of financial agents in charge of providing credits to producers according to compliance

In line with Oliveira’s statements, Pastor Soria, a Paraguayan congressman, agreed that the first step towards more sustainable supply chains was to achieve regional political commitment. Thelmo Muñiz Rodríguez, from Bolivian ABT (state agency in charge of issuing land use change permits), also stated his desire to implement a monitoring system based on these principles in order to fight illegal deforestation in 10 priority municipalities of Bolivia, and train ABT staff at the Environmental Monitoring Center of Pará. Lucas Elizalde, president of the Rural Society of Salta (Argentina), indicated that the environmental registration is a mechanism that would grant social recognition to producers who respect regulations.

Participants were also able to make a field visit to Fábio Parto Kanegae, a soybean producer from Paragominas (PA), to learn how the Pará environmental legal framework affects the land management of producers. According to Kanegae, it is necessary to unify the criteria between municipal regulations and current market standards, such as the Abiove’s soybean moratorium, so that producers do not receive mixed signals. In addition, he indicated that he needs some stability in relation to the regulations to be able to plan and finance his production activities.

A common agenda for sustainable production

Solidaridad, with support from the Dutch government, advocates for a common agenda of policies and tools that monitor and control deforestation resulting from soybean production. The organization promotes coordinated interregional work in the southern cone of South America, in an integration between public, private and civil society partners, which supports the development of  mechanisms that lead to a deforestation-free economy at a relevant sectoral scale.

Once each country representative at the event shared what was being done in terms of monitoring policies and tools, the group held a workshop to analyse the regional situation in terms of transparency, governance, tools and traceability. They identified common gaps, needs and innovation opportunities. “This is a concrete example of regional integration,” explained Alex Ehrenhaus, Solidaridad’s soy international programme coordinator. “Every participant agreed on the importance of aligning monitoring systems to have components as similar as possible in order to enable synergies. The group also agreed to work towards an increased integration in terms of knowledge, experience and technology transfer. The next step will be to consolidate what was concluded at the event in a policy proposal, validate the improvement points agreed upon and to circulate a common document among political decision makers in each country.”

Solidaridad has given us
a foundation for raising the awareness on sustainability issues in the soy value chain. Now together, the Chinese soy industry actors are beginning to set in place a framework and capacity building for implementing sustainable sourcing. –  Changyu Sun, Wilmar-Kerry (Shanghai) Trading Co. Limited, Senior Specialist for Oils & Grains Trading Department

Learn more about the first China-South American Soy Value Chain Brazil Study Tour, held in Argentina in November 2017.