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October 21, 2016

Soybean Moratorium Limits Deforestation in the Brazilian Amazon

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Ten years ago, environmentalists around the world were very concerned about the rampant deforestation occurring in the Brazilian Amazon. They were concerned that the "lungs of the world" was quickly disappearing. As a result, in 2006, environmental groups joined together with the Brazilian agribusiness community to launch a radical program called the "Soybean Moratorium."

This landmark accord put in place a moratorium on the purchase of any soybeans that were produced in illegally deforested areas of the Amazon biome. The two main agribusiness groups that are participating in the program are the Brazilian Vegetable Oil Processors Association (Abiove) and the National Association of Grain Exporters (Anec). The accord also put in place a satellite monitoring system to independently verify the success of the program. The Agrosatelite program is administered by the Brazilian National Space Institute (Inpe).

It has now been ten years since the Soybean Moratorium was imitated and it has been declared a resounding success by the Soybean Working Group (GTS) at the 10th advisory of the accord recently commemorated in Sao Paulo. The Soybean Working Group is composed of agribusinesses, environmental groups, and local and federal government organizations that worked together to craft the Soybean Moratorium. Representatives from all sectors feel the program was such a success that it has been renewed for an indefinite period of time.

The satellite monitoring system indicated that in 2005 deforestation in Brazil was occurring at a pace of 1,900,000 hectares per year, but in the latest data available from 2015, the rate of deforestation has declined to 600,000 per year. In addition to the soybean moratorium, there are a lot of other factors that have led to the decline including: stricter environmental laws, improved fiscal monitoring, changes in government policies, and a general consensus among the Brazilian population that the government needed to do more to preserve the Amazon Rainforest.

According to the Brazilian Vegetable Oil Processors Association (Abiove), of the area illegally deforested over the past ten years, less than 1% has been put into soybean production. The latest data indicates that only 37,200 hectares of soybeans were produced on illegally deforested areas during the 2015/16 growing season. The state of Mato Grosso had the most illegally produced soybeans at 28,000 hectares. The vast majority of the deforestation currently occurring in the Brazilian Amazon is for cattle ranching and lumber extraction.

A spokesman for Greenpeace, which helped to organize the moratorium, indicated that soybean expansion was thought to pose an enormous threat to the Amazon Rainforest, but now it is clear that soybean expansion can occur with zero illegal deforestation. This new reality is significant given the fact that soybeans are the largest crop in Brazil and the largest exported grain.

There is a concerted effort in Brazil to more efficiently utilize existing land by increasing productivity instead of just contumely clearing more land. The vast majority of new soybean production in Brazil is the result of the conversion of degraded pastures into row crop production.