FT Looks at Sustainability Issues in Brazilian Soybean Production

Financial Times writer Sam Cowie reported yesterday that, “Few plants divide opinion in Brazil as much as soya, of which the country is the world’s largest producer and exporter. For farmers, the crop has revolutionised agriculture and brought prosperity to the country’s vast interior — thanks in large part to buyer in China, where 70 per cent of exports go. But, for environmentalists, soyabeans are synonymous with deforestation and displacement of traditional communities.

This year, even as deforestation has fallen in the Amazon rainforest, it has hit record levels in the Cerrado region, a tropical savannah and vital carbon sink that is now home to 22mn hectares of soy plantations — half of the country’s total.

Cowie pointed out that, “Now, a series of initiatives in Brazil is trying to rise to that challenge: to improve soya’s environmental credentials, so that it can be grown in a way that will satisfy both farmers and green campaigners.”

In part, the FT article explained that, “In a bid to stamp out illegal deforestation in the Cerrado, the country’s soyabean frontier, industry leaders — the Brazilian Association of Vegetable Oil Industries (Abiove, which represents traders) and the National Association of Cereal Exporters (Anec) — have launched a monitoring platform for the 2023-24 harvest.”

Meanwhile, in a closer look a China’s soybean demand and production, Financial Times writer Eleanor Olcott reported yesterday that, “China grows much of the staples that it consumes, even if they are produced at a higher cost than for other big global producers. Through protective tariffs, subsidies for farmers, and huge government-run grain warehouses, the country has maintained a high degree of self-reliance with staples: researchers estimate that China’s self-sufficiency rates for rice and wheat were 98.6 per cent and 96.8 per cent, respectively, in 2020.

“But the glaring exception is soyabeans.”

Olcott added that, “However, Darin Friedrichs, director of market research at Sitonia Consulting, a Shanghai-based agricultural consultancy, says local supplies cannot make up for the shortfall from the US. ‘No matter how much China tries to increase domestic production, there is no way it can replace US soyabeans, given the size of market demand and the limited arable land,’ he says.”

In related news, Reuters writer Dominique Patton reported today that, “China has approved 37 genetically modified corn seed varieties and 14 GMO soybean varieties, taking it close to commercial planting of GMO corn and soybeans.”

Patton noted that, “China is the world’s top buyer of soybeans and corn, importing more than 100 million metric tons of the grains a year to feed its huge livestock herd.

“Allowing its farmers to grow GMO varieties that significantly increase yields could reduce future grain imports.”

Bloomberg News also reported recently on this issue.