4 th Road Show Brazilian Soy Sustainability
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1 4 th Road Show Brazilian Soy Sustainability Fábio Trigueirinho Secretary ABIOVE Brazilian Vegetable Oil Industries Association
2 ABOUT ABIOVE ABIOVE, the Brazilian Vegetable Oil Industries Association, has 13 members companies who are responsible for approximately 60 percent of Brazil's soybean processing and exporting volume. Brazil is responsible for some 32 percent of the world's soybean production, with 113,8 million tonnes in the 2017 crop. The soybean complex is one of the main items in the country's Trade Balance. In 2016 exports reached US$ 26 billion. Soybean production brings social development to rural areas. Europe is a major buyer of Brazilian soy protein (+13 million ton in 2016).
3 GLOBAL PRESERVATION Brazil is a step ahead in environmental sustainability! BRAZIL 66.3% EUROPEAN UNION 25.1% CHINA EAST ASIA & PACIFIC AUSTRALIA UNITED STATES RUSSIA CANADA ARGENTINA INDIA 17.0% 15.6% 14.6% 13.9% 11.4% 9.4% 6.8% 5.3% Source: THE WORLD BANK - TERRESTRIAL PROTECTED AREAS
4 AMAZON BIOME VEGETATION million hectares (49% of Brazil) - preserved native vegetation - 82%
5 CERRADO BIOME VEGETATION million hectares (24% of Brazil) - preserved native vegetation: 50% Densely Wooded Cerrado Riparian Forests Dirty Cerrado (Shrubby) Rocky Cerrado Vereda Cerrado (Open Areas) Typical Cerrado
6 THE FARM AND THE RURAL PRODUCER ARE INCLUDED IN IBAMA S LIST OF EMBARGOED AREAS IN BRAZIL PUBLIC GOVERNANCE LAW ENFORCEMENT ILLEGAL DEFORESTATION FARM IS EMBARGOED FINE R$500/kg purchased DEFORESTATION ALERT INSPECTION LEGAL DEFORESTATION
7 IMPROVEMENT IN BRAZIL S ENVIRONMENTAL GOVERNANCE Governance Factors Deforestation rate Amazon Biome 14,286 km² km² Environmental legislation Provisional Measure Lack of legal security Forest Code Federal Law No /2012 Compliance with legislation Low High (CAR Registration) Penalties for illegal deforestation Warnings and fines with low collections Embargoes of farms and high fines Monitoring of environmental crimes Start-up of satellite use Use of satellite images in real time with high definition Field inspections IBAMA technicians Inspections integrated with Federal Police, and Environment State bodies Requirements for purchasing agricultural products No requirements IBAMA s Embargoed Areas List Source:
8 CERRADO SHARP FALL IN CONVERSION 70,000 Conversion of Native Vegetation to other uses 60,000 50,000 40,000 30,000 20,000 10,
9 1) SOY MORATORIUM Monitoring 98% of the soybeans grown in the Amazon Biome since 2006 Signed: July 24, 2006 Commitment: Signatories will not trade soybeans produced in areas of the Amazon Biome deforested after July Soybeans are responsible for 1,0% of Amazone Biome deforestation.
10 SOY MORATORIUM MONITORING STATE 2016 (ha) MATO GROSSO 28,280 RONDÔNIA 1,358 PARÁ 7,479 RORAIMA AND AMAPÁ 38 TOTAL 37,155 In the 2016 crop soybeans have been identified on 37,155 hectares of deforestation since These 37,155 hectares in non-conformity with the Soy Moratorium correspond to 1 % of the bioma deforestation. Source: INPE, 2014
11 MORATORIUM - PUBLIC RECOGNITION The Soy Moratorium and negotiations with the meat sector are programmes that could serve as models for other countries. Kumi Naidoo, Greenpeace Global Executive Director The soy industry is setting the example for respecting the forest and the consumers. Paulo Adário, Greenpeace Diretor We have delivered extraordinary results. Frederico Machado, WWF Brasil - GTS member The European Soy Customer Group - AHOLD, ASDA, Carrefour, Co-operative, Kraft, Marks & Spencer, McDonald s, Nutreco, Ritter-Sport, Sainsbury s, Waitrose and Wal-Mart - applauds another year of positive progress by the Soy Task Force.
12 SOY MORATORIUM - 10 YEAR RESULTS Monitoring soybean in the Amazon Biome - transparency Contribution to sensibilize farmers to sustainability issues and Government to improve environmental governance.
13 2) SOJA PLUS PROGRAM Brazilian legislation is the most demanding Complying with it is as hard as a certification Legal Compliance Labour Environmental Legal certainties and market guarantees for the rural producer!
14 SUSTAINABILITY PROGRAMS - ABIOVE Soja Plus: MT, MS, MG e BA: 7.15 million ton. State Farms Soy area (thousand ha) Soy production (thousand ton) MT 875 1,700 5,100 MS ,020 BA ,545 MG Brazil 1,122 2,635 7,905
15 CERRADO BIOME - GENERAL CHARACTERISTICS PHYTOPHYSIOGNOMIES OF THE CERRADO BIOME FOREST FORMATIONS SAVANNAH FORMATIONS PASTORAL FORMATIONS Riparian Forests Gallery Forests Dry Forests Dense Forests Dense Cerrado Typical Cerrado Sparse Cerrado Cerrado Park Palm Grove Vereda Cerrado Rocky Cerrado Rocky Field Scrubland Meadow FOREST FORMATIONS SAVANNAH FORMATIONS PASTORAL FORMATIONS
16 3) CERRADO BIOME ROAD MAP Challenge: To reconcile food production with protection of biodiversity Cerrado policy assumptions: - Universal application to the soy market (all players) - Participation and consent by rural producers - Simple system, workable and not burdensome - Inclusion of other production chains - Economic incentives for conservation of the forests - Preservation of high-value areas (river basin headwaters, landscapes)
17 CERRADO TASK FORCE PRIORITY DISCUSSIONS 1. Mapping of soy acreage. 2. Development of studies on the Cerrado s socio-economic characteristics. 3. Supporting rural producer registration with SICAR (National System for Rural Environmental Registration). 4. Use of CAR (Rural Environmental Registration) as a purchase criterion. 5. Supporting the states in their analysis and validation of CAR
18 CERRADO TASK FORCE PRIORITY DISCUSSIONS 6. Supporting rural producers regarding regulations, implementation and monitoring of PRA (Environmental Regularization Program) 7. Supporting the Biome s Ecologic-Economic Zoning 8. Development of a Go/No-Go Zone tool 9. Supporting compensation and economic incentives for producers who cease to deforest, producing only in areas already cleared. 10. Articulation with other production sectors: input industries, financial sector, meat chain, charcoal plants, state governments, social movements, associations and employer associations
19 CERRADO - COMPENSATION OF LEGAL RESERVES AMAZON CERRADO ATLANTIC FOREST CAATINGA Sale (R$/ha) from 550 to 2,000 Sale (R$/ha) from 1,550 to 15,000 Sale (R$/ha) from 2,800 to 10,000 Sale (R$/ha) from 400 to 1,800 Lease (R$/ha/yr) from 130 to 210 Lease (R$/ha/yr) from 200 to 428 Lease (R$/ha/yr) from 200 to 300 Lease (R$/ha/yr) from 150 to 280 Minimum value for the Cerrado Biome R$ Source:
20 CERRADO BIOME - ECONOMIC RETURNS FOR SOY Soy Production (Rondonópolis/Mato Grosso State) Items Unit 2016/ /18*** Operational cost* R$/ha 2, , Average yield* Bags/ha Sales Price** R$ Revenues R$ 3, , Profits R$/ha *IMEA (Institute of Agricultural & Livestock Economy in Mato Grosso State) **Scot Consultoria *** Estimate Average profit for soy R$ Source: Agroanalysis, October 2017 (agribusiness magazine published by Fundação Getúlio Vargas)
21 CERRADO FUND - PAYMENTS TO PRODUCERS FOR ENVIRONMENTAL SERVICES Land inventories in the Cerrado Biome with high suitability for soy expansion comprise 15.5 million hectares (59,846 square miles) of native vegetation. Producers could waive their rights to convert this area to agriculture through payment for environmental services Cerrado Fund (15.5 million hectares) Compensation of Areas (R$ ) R$3.1 billion Soy Production (R$ ) R$5.02 billion 886 million 1.43 billion Source:
22 CONCLUSIONS: The economic complementarity of Brazil and Europe should be taken advantage of, to their mutual benefit. Conformity with the Brazil Forest Code means reconcile food production with environmental conservation. Soja Plus Program is an important vehicle to support the full implementation of the Forest Code and labor rules. We invite European Consumers to come to Brazil, as well as sponsor Soja Plus Program (Shared reponsibilities)
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