New hope for Brazil’s Cerrado as Louis Dreyfus promises to protect more than just the Amazon

As Louis Dreyfus publishes a new soy policy, the rest of the big traders need to step up to the plate.

Recent analysis by Global Canopy found that the ‘big five’ companies trading the most soy from the Cerrado were not doing enough to address unsustainable land use conversion resulting from soy expansion. Louis Dreyfus is the smallest of these five, but has just published a new policy which goes beyond the policies of all the others.

ADM, Amaggi, Bunge and Cargill all have policies to avoid deforestation linked to soy, but some of these do not even cover all forests, applying only to the Amazon. The policies ignore other important habitats, such as the integral ecosystems found in the Brazilian Cerrado.

Louis Dreyfus has now promised to go beyond these commitments and have pledged to “discourage and eliminate conversion of native vegetation” including a specific commitment to eliminate conversion in the Cerrado biome.

The importance of the Cerrado

Including the Cerrado is important because this vast area is not explicitly covered in deforestation commitments, due to its mixture of forests, savannah and grasslands.

The region’s remaining forests and native vegetation are being converted to agricultural land at an alarming rate. Soy is a key driver of this deforestation and 90% of the total tonnage of the crops grown in the region are soy. But this clearance is not necessary, by using already cleared land effectively we already have enough space to meet demand for agriculture products until 2040.

Up to now most commitments from soy companies have focused on ‘forests’, and many apply only to the Amazon in particular. By expanding their policy to native vegetation, Louis Dreyfus is covering more vital habitats and massively strengthening their commitment.

The big five can make a big difference

The dominance of the big five traders; ADM, Bunge, Cargill, Louis-Dreyfus and Amaggi in the region gives them significant power to influence soy supply chains, as demonstrated between 2005 and 2017 in Figure 1 below. Data from Trase shows that together, they were responsible for 60% of soy exported from the Cerrado in 2015, and the combined volumes of their exports is four times greater than the next five largest exporters combined. It also indicates that the big five are disproportionately linked to soy producing regions in the Cerrado with high rates of conversion from native vegetation to soy production.

Figure 1- Source: Trase Yearbook 2018

ADM, Bunge and Cargill are also active across the supply chain, as processors, traders, and manufacturers of soy. This gives them even more leverage, as well as the ability to independently invest in change at different points along the supply chain.

It is therefore disappointing that their commitments do not extend to other types of native vegetation, and allow significant conversion.

This new policy from Louis Dreyfus is a positive signal to the other large traders that avoiding clearance of the Cerrado is possible and desirable. It is now up to the other four to add their considerable weight to the fight to protect native vegetation in all important habitats.

But, commitments mean nothing without a plan for implementation

Whilst Louis Dreyfus’ new policy is a big first step, it does not include a meaningful timeline for implementation, or how they plan to meet their commitment. As it stands there is no deadline by which they plan to meet their commitment to eliminate conversion of native vegetation.

Without a time bound plan for implementation, and interim targets to aim for, progress cannot be monitored against a commitment. Either by the company itself, or by others. The lack of a deadline also leaves the commitment open to being gradually implemented in the long term, if at all. As it stands, we are running out of time to protect our natural resources. The next step for Louis Dreyfus will be to honour their commitment with a tangible deadline.

Many retailers and manufacturers have signed up to achieve zero net deforestation by 2020, but once again it looks as though it is impossible for these targets to be met. If the traders they source from are not sourcing deforestation-free soy by 2020, the companies buying from them certainly cannot.

Article by Sarah Rogerson, Research Assistant at Global Canopy

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