Trading soy from the Cerrado – an assessment of the big five
The production, trade, and use of soy continue to drive unsustainable land use in Brazil, particularly in the Cerrado – one of the most biodiverse biomes on the planet. Over 50% of all Brazilian soy is produced in the Cerrado, and this is expected to increase. This growth has been accompanied by the loss of over 40% of the Cerrado’s native vegetation, largely due to agricultural production.
This report explores the role of the five major soy traders in the Cerrado including their policies and reported actions to address this land conversion to source soy more sustainably.
Using a methodology developed by Global Canopy under the Company action on deforestation project, the five major soy traders (ADM, Amaggi, Bunge, Cargill, and Louis Dreyfus) are assessed for their power across the soy supply chain, for their policies on soy, and for their self-reported progress against these policies.
The analysis highlights the dominance of the big five traders in Brazil’s soy supply chains, and more importantly in the Cerrado. Not only do these five companies account for the majority of soy exported from the Cerrado, they are also disproportionately linked to areas with the highest rates of soy-driven deforestation.
While all five traders have deforestation commitments for soy, they still need to be strengthened. Amaggi has the most robust policy according to the analysis. All of the five traders’ commitments fail to fully preclude unsustainable soy production practices because they are all limited in their scope, largely focusing exclusively on the Amazon and on forests, and excluding the Cerrado and native vegetation. Additionally, three of the five traders’ policies are limited to only a subset of their suppliers.
Similarly, the implementation efforts by four of the five traders, according to their own reporting, fall short in driving meaningful changes in the procurement activities throughout the supply chain. Bunge scores highest, reporting on work to introduce traceability and compliance monitoring across the supply chain. Similarly, ADM and Cargill show evidence of implementing their commitments, but all three are assessed as having only moderately strong policies, undermining the effectiveness of full implementation. Of the five traders, Louis Dreyfus stands apart as the laggard with both a weak policy and minimal implementation efforts.
Even if these traders report strong implementation activities, further research is needed to both verify companies’ self-reporting and to determine the effectiveness of these activities in reducing unsustainable land conversion in their supply chains.
Note: This report is based on company assessments completed by March 2018. It does not reflect the sustainable soy policy announced by Louis Dreyfus in July 2018