November 21, 20916

Soybean Moratorium Considered for Cerrado Areas of Brazil

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

There has always been a lot of discussions concerning the preservation of native species in the Amazon Region, but the area of Brazil that has lost the most of its native vegetation is the cerrado areas of central Brazil. The expansion of grain and cattle production has been extensive in the cerrado areas due to availability of cheap land. The cerrado areas of Brazil include all or part of the states of: Mato Grosso, Mato Grosso do Sul, Goias, Parana, Sao Paulo, Minas Gerais, Rondonia, Bahia, Tocantins, Piaui, and Maranhao.

Environmentalists around the world initially expressed concerns about the rampart deforestation in the Amazon Region of Brazil because that is what caught the world's attention. After a successful Soybean Moratorium has been in place in the Amazon Biome for ten years, now environmentalist are proposing a similar program for the cerrado areas of Brazil. If put in place, this could be very consequential for Brazil's soybean production because nearly all the expansion of soybean production in Brazil over the past 30-40 years has been in the cerrado regions of Brazil. There has not been any timetable set for the consideration of this proposal.

If such a program was put in place, it would probably be modeled after the Soybean Moratorium that is in effect for the Amazon Biome. The program would identify areas of the cerrado that may have been cleared illegally and then it would prohibit the sale of any agricultural products produced in the illegally cleared land including grain, livestock, and forestry products.

Depending on the type of cerrado vegetation that was originally present, landowners were required to keep 20-40% of the land in its native vegetation. Unfortunately, these regulations were widely ignored and there was little attempt at enforcement. As a result, huge areas of cerrado were cleared with little regard for the preservation of the original vegetation.

After the passage of the new Brazilian Forestry Code in 2012, there is now a renewed effort by the Brazilian government to enforce these regulations by levying fines for any infractions. It's not just farmers who could possibly face fines, in the Soybean Moratorium in the Amazon region, fines have been issued not just to farmers who grow the crops produced on illegally cleared land, but also on banks that finance the production, transportation companies that transport the grain, and grain companies who purchase the grain. According to the Brazilian Vegetable Oil Processors Association (Abiove), of the area illegally deforested in the Amazon Region 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. Environmentalist are hoping that an equally successful program could be implemented in the cerrado regions of Brazil.