Soy Giants to Boycott Soy From Deforested Land

26/07/06 Cargill Inc. and other multinational soy traders have agreed to a two-year moratorium in response to protests against expanding soy plantations, which have become a major source of destruction of the rain forest. On Monday, the Brazilian Vegetable Oils Industry Association, or Abiove, said its members would no longer buy soybeans from newly deforested fields in the Amazon biome, which includes nine states. The new initiative will start its pilot phase in the 2006-07 crop season and seeks to monitor deforestation by the farmers who sell them soy over the next two years. Abiove said the goal was to get the region, to follow the Brazil Forest Code which requires at least 80% of the land owned be set aside as forest.

The moratorium calls for monitoring of soy plantations, stricter enforcement of an existing forest code and collaboration with rural groups and the federal government. Taking part are US commodities giants Cargill, Archer Daniels Midland Co. and Bunge Ltd., as well as France's Dreyfus and Brazilian-owned Amaggi. Together, the companies account for the majority of the soy trade in Brazil, the world's biggest soy producer after the US. In a joint statement the Brazilian grain exporters' association, which includes all the major multinationals, committed itself to "seeking to reconcile environmental conservation with economic development, through responsible and sustainable use of Brazil's natural resources".

The deal follows a three-year investigation by the environmentalist group Greenpeace into the impact of the soy trade in the Amazon. It was found that the efforts of the major soy players to open up the Amazon to the soy trade has seen illegal land grabbing on a massive scale by farmers keen to cash in on lucrative soy contracts. The protein-rich soybean in turn gets shipped to Europe where it makes up an increasing proportion of the feed given to chickens, pigs and cows. Greenpeace praised soy traders for refusing to buy soybeans from newly deforested land but warned that the two-year ban is insufficient to protect the Amazon rain forest from destruction.

It was reported yesterday that starting next year, McDonald's (MCD) chicken nuggets sold in the European Union will no longer be made from chickens fed on soy from the Brazilian Amazon in a move on the part of major E.U. retailers demanding Brazil's soy industry protect the Amazon. As it stands, large supermarket chains in the E.U. like Wal-Mart-owned (WMT) Asda, Tesco, J. Sainsbury and Marks & Spencer said they will give Abiove members two years before outright banning soy purchases from traders working in the region.