A new global fundraising initiative aims to stop soy-related deforestation of the Brazilian Cerrado, one of the largest deforestation frontiers in the world today. Grieg Seafood joins Tesco and Nutreco in announcing their commitment to the funding today and invites other global companies with Brazilian soy in their value chain to join in the initiative.
“Deforestation of the Brazilian Cerrado savannah leads to carbon emissions equivalent to 53 million cars annually. Soy cultivation is a key driver of deforestation in the Cerrado, an area recognized for its biodiversity and agricultural production. The Funding for Soy Farmers in the Cerrado Initiative will provide local soy farmers with financial incentives to expand soy cultivation in the Cerrado on existing agricultural areas. This will help protect the Cerrado’s forests and other natural habitats beyond what farmers already have to legally conserve under Brazil’s forest regulation,” says Andreas Kvame, CEO of the salmon farming company Grieg Seafood.
In addition to Grieg Seafood, the international retailer Tesco and animal feed manufacturer Nutreco have already committed to contribute to the Funding for Soy Farmers in the Cerrado Initiative each year for the next five years.
The Cerrado is one of the world’s most biodiverse dry forests, storing nearly 14 billion tonnes of carbon. The area is also crucial for preserving 40 percent of Brazil’s fresh water.
“Although the soy we use in our salmon feed is certified and deforestation-free in and of itself, Funding for Soy Farmers in the Cerrado gives us an opportunity to make a greater industry impact further back in our value chain. The idea behind the initiative is that businesses with Brazilian soy in their value chain can contribute with this funding. We hope many international companies will join us, both in and outside the salmon sector,” Kvame says.
Companies are encouraged to contribute according to consideration such as the size of their soy footprint. Grieg Seafood will contribute US$ 2 per tonne of soy the company uses annually in its fish feed for five years. In addition to businesses, foundations and governments are also invited to support the initiative financially.
Brazil’s forest regulation aims to balance forest protection with economic development. In the Cerrado, landowners are legally required to conserve 20-35 percent of their land. Without financial incentives, this leaves up to 80 percent of this land at risk of legal deforestation. At the same time, the Brazilian soy industry can more than double its current soy production without additional deforestation because there are already sufficient cleared agricultural areas suitable for soy cultivation. Many local soybean farmers are positive about growing on existing agricultural land if they receive financial incentives for the move.
The Funding for Soy Farmers in the Cerrado Initiative invites Brazilian soy stakeholders to lead the development of a financial mechanism that can disburse the funds in an effective and fair way that reaches the goal to halt soy-related deforestation in the Cerrado. Preliminary studies show that $ 250 million is needed to reach the goal.
Both investors and NGOs support the initiative:
Aarti Ramachandran, head of Research and Engagement in the investor network FAIRR, with $ 20,1 trillion supporter AUM, said: “For over two years, investors, global corporations and local Brazilian organisations have joined forces to find workable solutions to protect the Cerrado biome from soy-related deforestation. The Funding for Soy Farmers in the Cerrado Initiative is a powerful example of how companies can provide the right incentives to enable farmers to go beyond regulation to conserve this precious biome, while securing their supply chains. We applaud this initiative and encourage other companies to contribute to this fund and for Brazilian actors to ensure its effective implementation to halt deforestation.”
Nils Hermann Ranum, head of the Zero deforestation program of the Rainforest Foundation Norway, said: “It’s great to see companies are committing to help stop deforestation from soy in Brazil and demonstrate a willingness to contribute financially to this crucial goal. The world needs an effective mechanism to stop deforestation, combined with the companies pledging to buy soy exclusively from deforestation-free suppliers. If we are to succeed in our efforts to save the forest and stop climate change, it is crucial that companies with soy in their value chain take responsibility.”
Facts – The Brazilian Cerrado
- The Cerrado is a unique ecosystem, home to over 5% of global biodiversity and a store of nearly 13.7 billion tonnes of carbon. The Cerrado is also one of the most important Brazilian regions for water production – responsible for 40% of Brazil’s freshwater that is essential for agriculture.
- Soy represents more than 80% of the current Cerrado cropland (18 million ha of soy crops).
- The Cerrado biome in Brazil is currently the world’s largest area of land conversion.
- There are currently 22 million hectares of additional agricultural land in the Cerrado that is highly suitable for soy expansion. This can more than double current soy production in the Cerrado and meet growing global demand for soy for many decades to come, without further deforestation.
Facts – The Funding for Soy Farmers in the Cerrado Initiative
- Funding for Soy Farmers in the Cerrado is an industry-led initiative designed to support Brazilian farmers who are playing an active role in Cerrado conservation by preserving more land than they are legally required to, under the Brazilian Forest code, as native vegetation.
- The initiative will help the shift towards an end in soy-associated deforestation and habitat conversion in the Cerrado biome. Alongside the Amazon soy moratorium that has been effective at stopping deforestation for soy in the Amazon, the funding aims to create a financial incentive mechanism for farmers that could make Brazil a zero-deforestation and conversion soy producing country.
- International soy-value chain companies, foundations and governments can support this initiative by contributing financially.
- Initial forecasts and modelling indicate that approximately US$250 million in funding would be needed over a five-year period to achieve these outcomes. Beyond the initial five years, complementary incentives, such as green bonds and carbon financing, will be needed to continue to support farmers to expand soy only on already cleared land.
- The funding will only be disbursed when an effective mechanism to deliver the outcomes of the funding is designed and agreed.
- Once an effective mechanism is designed and agreed, donors will be expected to pay from approximately one year after the mechanism is launched.
- It is recognised that if an effective industry mechanism that achieves the outcomes of the funding is not developed, that the next best alternative for companies is to purchase credits (e.g. which are currently around USD2 a tonne). This next best alternative serves as a recommended minimum for companies to consider.
Facts – Grieg Seafood’s contribution to The Funding for Soy Farmers in the Cerrado Initiative:
- Grieg Seafood has committed to contribute with $USD 2 per tonne of Brazilian soy the company uses in its fish feed. This is in accordance with the guidelines of the initiative.
- All of the soy that Grieg Seafood uses in their feed is certified according to ProTerra or Round Table for Responsible Soy (RTRS). The contribution to The Funding for Soy Farmers in the Cerrado comes in addition to this.
- Grieg Seafood’s annual soybean imprint is approximately 30,000 tonnes. The company is in a growth phase, but is also looking for alternative feeding ingredients. They therefore expect their soy footprint to remain stable over the next few years.
- The company will report the exact soy footprint per year in its annual reports. As fish growth and feed consumption is impacted by various factors, such as sea water temperature, they never know how much feed they use before the end of the year.
- Grieg Seafood is a member of the steering group in Cerrado Manifesto Signatories of Support
- Read more about how Grieg Seafood works with sustainability here: http://grieg18.digirapport.no/
Please also see:www.businessforthecerrado.com
Kristina Furnes, Global Communications Director Grieg Seafood ASA
TEL: +47 481 85 505 / email@example.com
Quotes from soy farmers in the Cerrado:
Paulo Rickly, Soy Farmer Cerrado (Maranhão)
“We—producers of soybeans and other grains in the Brazilian Cerrado region—are aware of the need to preserve the biome not only because of its great biodiversity, but also because the Cerrado is where the springs of the main watersheds in South America are born. The Cerrado´s vegetation is a ‘sponge’ that absorbs rainwater and feeds the groundwater and aquifers that will give rise to rivers.
“In addition to other factors such as evapotranspiration, regulation of temperature gradients, and wind barriers, among others, this idea of payments for environmental services comes at a good time, as it will certainly help to keep most of these areas preserved.”
Cesare, Soy Farmer Cerrado (Maranhão)
“The movement for the preservation of the environment observed in Brazil should not only be an external pressure event. It is important to use tools such as payments for environmental services as an incentive. These payments express the worldwide commitment of all those involved in the food production chain to embrace sustainability.
The applicability of tools like financial mechanisms are mandatory to achieve preservation and maintenance of the environment.”
Gabriel Couto, Soy Farmer Cerrado (Maranhão)
“Preserving forests is one of the biggest challenges for developing countries like Brazil. We are aware of the importance of native vegetation in maintaining rainfall regimes, as forests control climate through evapotranspiration. Brazil’s role in favor of the Amazon has been closely watched internationally and the country’s reputation for agriculture will depend on maintaining high levels of production in an environmentally sustainable manner.
Thus, payments are a direct way to curb deforestation. For the farmer who is not yet aware of the global importance of forests, this incentive would give him a direct economic reason to contribute to the preservation of his reserves.”
Luiz Pradella, Soy Farmer Cerrado (Bahia)
“Payment for Environmental Services is recognition of the very few individuals that contribute to the good of all. We must socialize the benefit and the cost as well. Environmental services are for the planet, so the service provider (farmer) should be rewarded for it.”
Benildo Telles, Soy Farmer Cerrado (Mato Grosso)
“I believe it is possible to produce sustainably while preserving forests and soil, but receiving payments for environmental services is critical to that.”
Gisela Introvini, Soy Farmer Cerrado (Maranhão)
“In the region of Maranhão and Piauí, we (producers) use RTRS certification and believe that payment for environmental services is a great tool for valuing those who get high production results through the technologies and systems that make it possible to produce in the same space: meat, soy and corn—and still contribute to carbon storage. ”
Deomar, Soy Farmer Cerrado (Mato Grosso)
“Brazilian agriculture in the Cerrado regions carries very large burdens in relation to the maintenance of reserves. The farmer bears this cost for the benefit of the whole community, which receives benefits not only from the food production, but also from all the environmental services generated.
There is an urgent need for society to be aware of this issue and understand that such a burden should be shared amongst all, given the social benefits that preserving the environment brings.”