A bar on trading soy linked to Amazon deforestation has been extended, again, to the end of 2014. But will the promised new monitoring mechanism be ready in time?

In December 2014, Brazil’s long-standing soy moratorium will come to an end. The last-minute January announcement by the Brazilian Soy Task Force included a one-year moratorium extension to allow for the development and testing of an alternative soy monitoring mechanism. The new mechanism will replace the moratorium in January 2015.

The moratorium was established by the Brazilian soy industry back in 2006 in response to a high profile Greenpeace campaign. That campaign linked soy used by McDonald’s to deforestation in the Amazon. McDonald’s demanded deforestation-free soy from it suppliers and the soy moratorium was put in place by Brazil’s Brazilian Vegetable Oil Industries Association (ABIOVE) and National Association of Cereal Exporters (ANEC).

The moratorium was designed to stop the trade in soy from areas of forest cleared after July 2006. Newly deforested areas would be monitored through a combination of remote sensing and field checking. This led to a blacklist of embargoed suppliers from which ABIOVE and ANEC members would not buy.

Initially designed as an emergency measure, to be in effect for two years, the moratorium has been renewed on six occasions and has now been in force for eight years.

Moratorium success

The longevity of the moratorium can, in part, be explained by its success. A 2012 report by Brazil’s National Space Research Institute found that soybean-driven deforestation was only responsible for 0.4% of total deforestation in the Amazon during the period 2007-2011.

The report concluded that not only was the monitoring system proving “highly effective”, but there were “strong indications” that the moratorium itself was inhibiting soybean-driven deforestation.

The moratorium has enjoyed the backing of European retailers. Concerned about the risk of deforestation-linked soy entering their supply chains, they have lauded its zero-deforestation focus – a more ambitious objective than existing Brazilian legislation, which allows some deforestation.

At a time when a number of international large companies – L’Oréal, Unilever, Nestlé, Asia Pulp & Paper (APP), and palm oil giant Wilmar among them – have been adopting ambitious deforestation-free policies, the decision to let the moratorium expire deserves attention.

It raises the questions: why end it, and what will replace it?

Ruth Rawlings is vice-president for global issues management at Cargill, an ABIOVE member and large soy buyer and trader. She argues that the move to permanently end the moratorium needs to be viewed in the context of improvements to Brazil’s environmental governance.

“We have to recognise that although the moratorium has been effective, other things have helped,” Rawlings says. “When the moratorium was first put in place there was a lack of governance in Brazil around both forest and the agricultural frontier. Rates of deforestation were particularly high. Since then, there has been much improved governance from the Brazilian side, in particular their ability to implement serious fines on illegal deforesters as well as to enforce their laws due to improvements in satellite monitoring.”

Carlo Lovatelli is president of ABIOVE, the body that has been managing implementation of the moratorium on behalf of its member companies. He also draws attention to Brazil’s much improved environmental governance. 

“The soy moratorium, a temporary and emergency step … was programmed to end in 2008. Governance and law enforcement are now significantly better and it therefore no longer makes sense to extend the moratorium,” Lovatelli says. “The market now believes that the government is the ideal agent to supervise and control deforestation in the country.”

Lovatelli cites a series of measures that have been adopted to fight illegal deforestation in Brazil including reinforced governmental inspections, the action plan for prevention and control of deforestation in the Amazon, the Brazilian Environmental Protection Agency’s list of embargoed soy farms (developed under the moratorium), and rapid advances in Brazil’s real-time deforestation monitoring.

Brazils’ forest code

The decision to terminate the moratorium must also be seen with reference to changes made to Brazil’s forest code in 2012, and the desire on the part of Brazil’s agricultural sector to throw its weight behind implementation of the new code.

While contentious – environmental groups attacked the new forest code for, among other things, a 2008 amnesty clause, and for reducing the amount of legally protected land required around rivers– the code has clarified definitions around farm land use and occupation.

This includes the legal separation of areas for production and environmental conservation (the latter accounts for up to 80% of land in the Amazon) – classifications that were previously inconsistent between state and federal law and also widely ignored under a previous forest code from 1965.

While the details of the new soy monitoring system remain unclear, all parties have agreed it will need to support the implementation of Brazil’s rural environmental registry, a legally required component of Brazil’s new forest code.

The registry allows for the legal registration of Brazil’s rural farms and properties, millions of which remain unregistered and therefore technically illegal. The registration process requires farms to demonstrate how they are complying with the terms of the forest code. It also requires farmers to enter the GPS coordinates of their properties into a national deforestation tracking system.

For environmental groups, implementation of the environmental registry has long been a pre-condition for ending the moratorium. Until farms are properly registered, soy traceability and accountability for deforestation is all but impossible, they have argued.

“A complete, open-access monitoring system, cross-referenced with the rural environmental registry database, is needed, both for traceability and accountability in the soy supply chain as well as for soy-consuming companies to be certain of the origin of their soy,” says Daniela Montalto, Amazon campaign project leader at Greenpeace International.

Greenpeace has tentatively welcomed the decision to allow 12 months for the development of a new soy monitoring system. It has, however, pointed out that the implementation of the rural environmental registry alone is not sufficient.

“Compliance with [the registry] is the minimum that the sector needs to ensure. It is a necessary tool, but it does not in itself stop deforestation from happening,” Montalto says.

She adds: “Although we managed to get a last-minute agreement in place in January, it is by no means perfect. In the coming months we will want to discuss measures beyond registry compliance.” 

Other environmental groups have stressed a cautious approach to the development of a new monitoring system.

“The National Wildlife Federation welcomes the extension of the soy moratorium until December 2014, but suggests careful consideration of the risks and benefits of any replacement, which it cautions must make permanent the safeguards for forests built into the moratorium,” a federation spokesman says.

The whole farm approach

Cargill’s Ruth Rawlings says there are other reasons for supporting the forest code and the environmental registry. She argues that reinforcing the forest code allows for a move towards a “whole farm” approach to addressing deforestation. This approach takes into account the reality that soy is not now the cause of environmental destruction that it once was.

“The evidence shows that soy is no longer the big driver of deforestation on the agricultural frontier,” Rawlings says. “We are not seeing the big land clearances for soy that we had 10 years ago. Moving to a whole farm approach is the long-term way to go in controlling deforestation over time, not just for soy, but for any other crop.”

Gina Cardinot is a manager at Conservational International in Brazil. She says that while the soy moratorium has fulfilled an important function, now is the time to enhance it using the other measures available.

“We believe that the moratorium is not the only tool available to stop land use disorder,” Cardinot says. “We must highlight the importance of other tools, such as the rural environmental registry. Our work aims to understand how viable sustainable agriculture can be implemented and this effort involves approaches beyond the moratorium.”

Cardinot draws attention to what is, potentially, one of the biggest drivers towards a new system: the need to support Brazilian farmers to comply with the forest code, rather than simply to penalise for non-compliance.

“The evolution of the moratorium is important because it ceases to be only punitive and starts to be educational as it will work with producers to support them in environmental compliance efforts,” she says.

Rawlings echoes this sentiment. For Cargill, she says, the new monitoring system should do two things: speed up implementation of the environmental registry and ensure that the new system is thoroughly embedded.

This will require, she says, supporting farmers to comply with the code through the provision of training and technical capacity assistance – something Cargill has already been doing via its partnership with the Nature Conservancy in Brazil’s Santarém region.

“We’re certainly prepared to spend money on helping farmers and to ensure this registration system happens quicker, particularly in the more sensitive areas,” Rawlings says.

Customers watching 

Soy customers in Europe and the US will be watching developments intently. Until now, the moratorium has provided an easy, resource-efficient method for buyers to guarantee deforestation-free soy-based products to their consumers. The new system is likely to be less clear-cut, and serious thought needs to be given to whether it will align with zero-deforestation policies.

“The soy moratorium has been very effective at providing assurance that we are not contributing to the deforestation of the Amazon biome,” says Else Krueck, director for CSR and environment at McDonald’s Europe, speaking on behalf of the European Soy Customer Group. “It is critical now that the Brazilian Soy Task Force moves quickly to set up a proper facilitated dialogue to address all the challenges of monitoring and registration, essential to the implementation of the new Brazilian forestry law.”

So 2014 will be a critical year.

Top four soybean producers in 2013 (million tonnes)

United States: 88.7

Brazil: 88.0

Argentina: 54.5

China: 12.2

Source: Earth Policy Institute

Amazon deforestation (square miles)

2004: 10,722

2005: 7,341

2006: 5,515

2007: 4,498

2008: 4,984

2009: 2,882

2010: 2,702

2011: 2,373

2012: 1,765

2013: 2,256

Source: Mongabay.com

Brazil’s forest code

Brazil’s new forest code was signed into law in 2012. It has been a major point of contention between Brazil’s agricultural lobby and environment groups. The new code updates the 1965 forest code, which famously set out legal requirements on the amount of land rural landowners should maintain as forest, but which had been widely ignored and unenforced.

The 2012 code maintains the 1965 requirement to maintain forest cover on 80% of rural properties in the Amazon, 35% in the central savannah region and 20% in other areas of the country. When accounting for the total, farmers can however now include forest cover on hillsides and river margins – areas which were already legally protected.

The new code provides an amnesty to farmers who cleared land in contravention of the legal requirements before 2008. Under the new terms, however, large landowners are expected to demonstrate how they will restore and compensate for the balance of land cleared. There remains a lack of clarity about how this will be done, verified or enforced.

As part of the code, all rural property holders are legally required to register their farms with the federal rural environmental registry. The registration process requires farms to demonstrate how they are complying with the terms of the forest code including, for example, how they intend to compensate for land illegally cleared before the 2008 amnesty.

agriculture  Brazilian Soy  deforestation  farming  Latin America  Soy 

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