Soy and environmental compliance in Brazil: An undervalued risk for global markets

Nearly all the recent deforestation linked to soy expansion in Brazil has been in two unique, biodiverse biomes: the Cerrado savannah and the Brazilian Amazon. These regions accounted for over half (51%) of soy exported from Brazil in 2017.

This new brief from the Trase initiative with Imaflora compares areas of soy production in these two biomes with farm-level information in the Rural Environmental Registry (CAR). CAR registration, which is mandatory for all rural properties in Brazil, is the first step for compliance with the Forest Code, established to regulate land use and conservation of native vegetation on private properties.

It identifies a strong correlation between levels of unregistered soy farmland and soy-related deforestation in the current deforestation hotspot region of Matopiba in the Cerrado.

In addition, the brief looks at who is importing soy grown on unregistered farmland, using Trase’s unique supply chain mapping data. This shows, for example, that nearly 40% of the soy produced on unregistered farms in the Cerrado and Brazilian Amazon is estimated to be shipped to China, and another 12% to the European Union. It also identifies the risk top soy traders are exposed to that they are handling soy grown on unregistered farms.

Finally it offers recommendations for how different supply chain actors can support CAR registration and Forest Code compliance by Brazil’s soy producers.