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Surging Brazilian soybeans acreage could threaten Cerrado savanna

  • Featuring
  • Asim Anand
  • Commodity
  • Agriculture
  • Topic
  • Environment and Sustainability Food Security

The rapid expansion of soybean farming in Brazil over the past decade has catapulted the South American nation to being the world's biggest producer and exporter of the oilseed.

According to the Ministry of Agriculture, Livestock and Supply in crop year 2011-12 (September-August), Brazil produced 66.5 million mt of beans, well behind 84.3 million mt of the US. By 2017-18, Brazil surpassed the US and became world's premier beans producer at 123.4 million mt.

In just the last decade, soybean acreage in Brazil expanded from roughly 25 million hectares in 2011-12 to nearly 40 million hectares in 2021-22, an astounding growth rate of 60%.

Most analysts attribute the surging soybean prices as the primary factor in the beans acreage expansion in Brazil.

Soybean prices 2019-2022 | S&P Global Commodity Insights

As a result, the South American agricultural powerhouse is set to achieve an unprecedented level of beans production in coming years.

Brazil's soybean production is forecast to grow to 152 million mt by 2028-29, up 10% on 2020-21 levels, with planted area projected to expand 15% to nearly 45 million hectares, according to the Brazilian Ministry of Agriculture's Supply Management Company, or CONAB.

Brazil soybean acreage | S&P Global Commodity Insights

More importantly, between 2008 and 2028, the soybean planted area is set to grow by 109% – the highest for any crop. The second-fastest acreage expansion rate belongs to corn at 30%, CONAB said.

Environmental cost

Soybean farming has brought immense wealth to Brazil. Income generated from the oilseed sales accounted for roughly 25% of the country's earnings from agriculture over the past few years. But the prosperity has not come without its fair share of environmental costs.

Research indicates that over 20 million hectares of Brazil's forest cover have been lost to soybean cultivation in the last three decades. Large-scale deforestation and habitat loss in the Amazon rainforest have been attributed directly to the beans farming since late 1980s.

But there is a catch here.

Although, the Amazon rainforest has borne the maximum brunt from the unabated soybean farmland expansion in the late twentieth century, it is the Cerrado savanna which could possibly be under greater threat in the next decade as farmers search for new acreage.

Located in the East-Central parts of Brazil, Cerrado is a vast tropical savanna which has already lost over half of its native vegetation to beans farming since the turn of the century.

Although CONAB maintains that the soybean acreage expansion in the coming years primarily consists of degraded pastures, it also concedes that some portion of the acreage will come from new land, which is possibly forests and tropical savannas.

While expansion of soybean area is expected principally due to conversion of degraded pastureland into soybean area, clearing of new land for production will also contribute to greater planted area, CONAB said. Much of the area of beans acreage growth is expected in Mato Grosso and the Matopiba region (Maranhao, Tocantins, Piaui, and Bahia), it said.

These states comprise the core of Cerrado.

Brazil is targeting increased productivity through adoption of new technologies, higher usage of degraded areas, and especially the crop rotation practices, in order to steer soybean farmers away from critical environmental hotspots like Cerrado, said Sergio De Zen, CONAB's director of Agricultural Policy and Information.

But the environmentalists remain concerned over the future of the savanna amid large-scale surge in beans farming in the region.

"Most soybean-driven land conversions in Brazil have happened in the Cerrado," Karla Canavan, vice president for commodity trade and finance at World Wildlife Fund, told S&P Global Commodity Insights. "The corridor [Cerrado] is like an inverted forest that has enormous roots and is a very important carbon sink."

"Unfortunately, more than 50% of the Cerrado has been already converted into soybean farmlands," Canavan added.

According to the environmentalists, the onus is on the government to impose stricter conservation laws to protect the savanna.

There should be a higher coverage of conservation laws, such as soybeans moratorium, in the Cerrado to stop the intrusion of farmlands into the savanna, Canavan said.

"Traceability is the key and technology already exists to detect land conversions," Canavan said.

As much as 80% of the Amazon is protected, but only 35% of Cerrado tropical savanna falls under conservation laws, according to CONAB.

Amazon relatively unscathed from beans

There is a general perception that the rapidly expanding Brazilian soybeans farming is pushing the Amazon rainforest towards a tipping point. But, as a matter of fact, soybean farmland expansion in the Amazon has slowed down considerably in the past decade.

"Deforestation caused by soybean farming in the Amazon has significantly reduced since a sectoral agreement was signed in 2008," Canavan said. "The soybean moratorium has been a success to stop beans acreage expansion in the Amazon."

Canavan added that prior to 2008, more than 30% of Amazon deforestation was attributed directly to soybean acreage expansion.

"A recent WWF study considers the moratorium a success as less than 2% of expansion over the Amazon can be linked with beans farming in a 10-year period between 2008 and 2018," she said.

Brazil's Amazon Soy Moratorium (ASM) is a sectoral agreement under which commodities traders agreed to avoid the purchase of soybeans from areas that were deforested after 2008. The ASM was first implemented in 2006 and has been renewed every 1-2 years until 2016, when it was implemented permanently.

"It is the livestock farming that is leading the deforestation charge in Amazon, not soybeans," Canavan said.