São Paulo (Reuters) – Environmentalists are skeptical that grain trading companies, which supply animal feed to global meat markets, will keep promises to avoid buying grains grown on recently deforested land in Brazil.
The skepticism comes in the wake of the end of a two-decade corporate pact to protect the Amazon rainforest, which was scrapped this month.
Global grain trading companies abandoned the so-called Soy Moratorium after lawmakers in Mato Grosso, Brazil’s largest agricultural state, approved a law that removes tax incentives from companies adhering to the corporate pact. The agreement prohibited the purchase of soybeans from farmers who had cleared hectares of rainforest for commercial crops.
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The news came just as new commitments from trading companies were expected to come into force to end all deforestation in their supply chains. Continued adherence would have expanded protections to other threatened ecosystems, such as the grasslands of the Cerrado and the wetlands of the Pantanal, which have suffered immense tree loss in recent decades.
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2006 Pact
Trading companies adopted the Soy Moratorium in 2006, after years of campaigning by environmental groups. The pact allowed companies to share data on deforestation in their supply chain and with civil society groups such as environmentalists who monitor the impact.
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A decade ago, environmental advocates had been campaigning for a broader corporate commitment. Brazil still loses hundreds of thousands of hectares of native vegetation to soybeans every year.
Since 2021, the North American companies ADM, Bunge and Cargill, the European company Louis Dreyfus, the Brazilian company Amaggi and the Chinese company Cofco had made a commitment to end all deforestation in their supply chains, from 2025-2026.
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The moratorium, which was scrapped this month, prevented companies from buying soybeans from farmers who cut down forests after 2008. And the pact collapsed as deadlines for new pledges approached. The new commitments allow purchases of farms on deforested land until 2020 and 2025, depending on the trading company.
ADM, Bunge, Cargill, LDC and Amaggi did not respond to questions about their commitments to combat deforestation.
Making individual commitments, rather than a sectoral pact, means that companies’ current systems for tracking new commitments lack the openness and collaboration that researchers say allowed the moratorium and other conservation measures to preserve an area of the Amazon rainforest the size of Ireland.
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Transparency questioned
Much of Brazilian soy is used as feed to fatten animals, from which comes the meat sold by supermarkets and fast-food chains, such as McDonald’s. Until now, groups representing major consumers of the oilseed have been vague about how rigorously they will monitor whether the meat they buy comes from soy-fed animals from deforested tropical forests.
“The issue is transparency and means of verification. In other words, a declaration is not enough,” said André Lima, who leads efforts to combat deforestation at the Ministry of the Environment. “Commitments that have transparency and reporting, verification, measurement, and evaluation mechanisms certainly bring positive results,” he added.
Cofco said a third-party audit verified that 99% of the soybeans the company purchases in Brazil have been deforestation-free since 2024. Cofco said its internal controls classify grains purchased from recently deforested areas as “higher emissions.”
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Glenn Hurowitz, chief executive of environmental NGO Mighty Earth, said it was pleasing to see companies commit to protecting all ecosystems, but he said he was concerned about compliance.
“It seems strange to adopt stronger protections for nature while abandoning a proven and effective mechanism for saving the Amazon,” he said. “They are destroying the very mechanism that underpinned all their claims of environmental responsibility.”
“Toxic reputation”
The moratorium was adopted in 2006, when Greenpeace released a report showing that soy sold by grain traders had driven deforestation of the Amazon rainforest.
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Days after major trading companies withdrew from the moratorium, global restaurant chains, food retailers and Fefac, a powerful animal feed lobby in Europe, where almost half of Brazil’s soybean meal is exported, avoided making public comments or remained vague about adopting any measures.
The British Retail Consortium, which represents McDonald’s and Burger King, expressed disappointment at the major companies’ exit from the moratorium, and said retailers remained committed to collaborating with their suppliers to combat deforestation, but did not give details.
In September, the Retail Soy Group, which represents supermarket chains such as Tesco and Sainsbury, published a public letter asking trading companies to maintain their commitments under the Soy Moratorium. The group said its members would “evaluate each company’s performance individually against our own individual procurement policies.”
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RSG representative Will Schreiber said the trading companies’ withdrawal from what was considered “the most successful conservation measure this century in preventing the loss of new forests” was “very disappointing.”
Still, he added that when he met with trading representatives last year, “the perception was that the soy moratorium was appropriate for its time.”
Doubts in Europe
In recent years, Brazil has stepped up legal protections for its forests. Europe is set to adopt legislation this year that bans imports linked to deforestation from 2020.
China is by far the biggest buyer of Brazilian soybeans and other agricultural products, but exports to Europe could increase with the trade agreement recently signed between the South American trade bloc Mercosur and the European Union.
“I think it will be perfectly possible for these large trading houses to maintain their commitments to the monitoring systems they have in place,” Schreiber said.
Mighty Earth’s Hurowitz said he was skeptical about the impact retailers would make without actually reducing purchases from merchants who abandoned the moratorium.
“Cargill and Bunge understand dollars and cents,” he said. “I don’t yet know how aware consumers are of the fact that these shady pet food traders have abandoned Amazon. But we certainly intend to make sure they know.”
