Recently, I came across a much publicized article in The New York Times about the impact of two of the world’s biggest grain traders, Cargill and Bunge, on deforestation trends in the agricultural frontiers of Brazil and Bolivia. Since we have entered an era of private commitments to deforestation-free supply chains, this article shows that there is still a way to go for some companies to improve their performance.
Deforestation estimates in 2016 from the Brazilian National Institute for Space Research (INPE) indicate a resurgence of deforestation in the Amazon, and deforestation hotspots identified by the Word Resources Institute suggest increasing pressure on the savanna forests in the Cerrado region, a biodiversity-rich ecosystem. Additionally, while there are no official deforestation estimates in lowlands Bolivia, it has remained at high levels, according to Terra-I. This suggests a need to examine the culprits.
Don’t miss the forest for the trees
The article mentioned above discusses a new report by the environmental campaign organization Mighty Earth that identifies deforestation in Brazil and Bolivia linked to Cargill and Bunge. Drawing on satellite imagery and supply-chain mapping information processed by the Stockholm Environment Institute, the article makes the case that new large-scale forest-clearing by Bolivian and Brazilian farmers for soybean production is associated with the demand from these two American-based food giants.
It is interesting to note that companies like Cargill and Bunge still buy soybeans originating from forestlands converted to agriculture and fail to implement due diligence procedures to verify their origin. In some cases, these purchases directly trigger soybean expansion across Brazil and Bolivia’s frontiers. Cargill and Bunge have argued, in their defense, that their role is minor, and that deforestation is a complex issue that requires all major buyers — not just them — to get involved.
While it is useful that environmental groups like Mighty Earth track how company supply chains are ‘contaminated’ by ‘dirty supply’, it would be more helpful if they could place these trends within a wider context. This would foster more practical and durable solutions, because even if these two soybean traders stopped buying soybeans from the Matopiba region in Brazil and the eastern lowlands in Bolivia, it is likely that deforestation would continue to expand in both of these regions.
In this sense, the New York Times article fails to provide an in-depth understanding of the complex dynamics shaping these two agricultural frontiers, and misleadingly mixes two very different situations. Moreover, while the article refers to deforestation trends in the Amazon, it looks mostly at the Cerrado areas, where a greater pressure associated with agricultural expansion is taking place.
To its credit, the article does highlight two important trends that have been perceived by academics yet hardly studied until now: 1) Efforts to contain deforestation in the Amazon have shifted to the Cerrado areas; and 2) Efforts to contain deforestation in the Brazilian Amazon have placed pressure on other countries, mainly in Bolivia and Paraguay’s deciduous and dry forests. In these regions, different regulations governing conversion of forests apply less rigid standards than in the Amazon.
Two main issues came to my attention while reading this article. The first is the clear limits of the soy moratorium, since it only applies to the Amazon region. The second is how easy it remains for companies to circumvent their sustainability commitments when playing around with specific national regulations that still allow for forest conversion. But what is most interesting in our current times is that companies have to now face the reality of their own commitments under the scrutiny of civil society.
The two companies blamed as culprits of deforestation argue that they have a relatively low share in total soy supply originating from the regions under scrutiny. Cargill sources 8 percent from Bolivian municipalities and Bunge sources 20 percent from Matopiba, Brazil. Thus, slowing deforestation has to go beyond the actions of just these two companies. More action should be required to revise the land-use and forest conservation regulations in the Cerrado areas.