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ABIOVETechnical Workshop on theGlobal Impacts of Soybean ProductionIntroductory CommentsABIOVEAssociação Brasileira das Indústrias de Óleos VegetaisFabio TrigueirinhoGeneral SecretarySustainable Soybean Round Table - WWFApril 26, 2006

ABIOVEWorld Demand for FoodEconomicDevelopmentCurrent discussion onsustainability is unbalancedSUSTAINABILITYThe questions related topopulation increase and thegrowth of demand for food arebeing ignored by theenvironmental point of viewEnvironmentalAdministrationSocialResponsibilityPopulationGrowthDemandfor FoodAssociação Brasileira das Indústrias de Óleos Vegetais 4

ABIOVENGO VisionSoybean crops in LatinAmerica (Brazil) provokenegative impacts:EnvironmentSocial ConditionsEconomicDevelopmentSoybeansNGOs questionEuropean soybeanimportsEnvironmentalAdministrationSocialResponsibilityAssociação Brasileira das Indústrias de Óleos Vegetais 6

NGO VisionABIOVEEnvironment - DeforestationSoybean expansion affects the Cerrados and the AmazonregionThe Cerrados and the Amazon Forest are regions with highbiodiversity valueThe Amazon Forest regulates rain in several parts of BrazilAssociação Brasileira das Indústrias de Óleos Vegetais 7

Is the discussion balanced?ABIOVENo. The facts and data on soybean production in Brazilare distorted“The exception becomes the rule.” Negative factors areexaggerated and positive factors are omittedThere is no representativity of the Brazilian soybeanproducers at the Soybean Round TableAssociação Brasileira das Indústrias de Óleos Vegetais 10

Is Brazil a big devastator of the environment?ABIOVEWorld’s Forest Resources in 2005 – FAO/ONU12345678910CountriesRussiaBrazilCanadaUSAChinaAustraliaCongoIndonesiaPeruIndiaMillions ofHectares809576310303197164134886968Associação Brasileira das Indústrias de Óleos Vegetais 11

ABIOVEIs Brazil a big devastator of the environment?Source: GreenpeaceIntact forest (areas larger than 500 km 2 )Tropical America 34%, 55% of which are in BrazilEurope has 6.4%, 90% of which are in RussiaAssociação Brasileira das Indústrias de Óleos Vegetais 12

ABIOVEDoes Brazil have an adequate environmental policyfor the Amazon?Legal AmazonProtected Areas (Conservation Areas and Indigenous Lands)Legal Reserve (Forest 80% / Cerrado 35%)Total Protected AreasTerritoryMillionsof ha178143321Source: Prepared by ICONEAssociação Brasileira das Indústrias de Óleos Vegetais 14

ABIOVELegal Amazon – “A Continent”AMGERMANYACROTerritoryArea*PopulationRRAPFRANCELegal AmazonPA MA CE RNPI PBPETOSEMTBAForestGOFloresta80%60%MGMSESSP RJPRSPAINITALYSCRS9 states5.1 million km 222 million inhabitantsAmazonia Legal Amazon LegalDesflorestameDeforestationnto13%13%Não Non-Forest Floresta(Cerrados)15% 15%76 millionhectaresHidrografia Hydrography2% 2%Nuvem Clouds5% 5%Área NãoUnobserved AreasObservada5%5%Source: INPE (PRODES)Are there sustainable activities for the 22million inhabitants of Legal Amazon?* 60% of Brazilian territory* About 650 million football fieldsAssociação Brasileira das Indústrias de Óleos Vegetais 15

ABIOVEVision of the SectorSoybeans is not an important vector of deforestation of theAmazon Forest!Legal AmazonLegal AmazonTerritoryMillions of Ha510Part %100%Soybean Acreage61,2%Source: INPE (PRODES) / IBGE (PAM)Soybeans occupy 1.2% of Legal Amazon, basically in the Cerrados orTransition Areas between the Cerrados and the Amazon ForestMato Grosso concentrates 88% (5.3 million hectares) of the soybeanarea in Legal Amazon - about 41% of the state are non-forest areasAssociação Brasileira das Indústrias de Óleos Vegetais 16

Vision of the SectorABIOVEThe Cerrados are PreservedSoybeans were introduced into the Cerrados in the 1980sand occupy 11.8 million hectares, less than 6% of the totalterritoryThe Legal Reserve guarantees a minimum of 35%preservation of Legal AmazonAssociação Brasileira das Indústrias de Óleos Vegetais 17

Vision of the SectorABIOVEProtectionism leads to monocultureRich countries only import raw material, making it impossible fordeveloping countries to diversify their production and add value toproducts.ProductEUUSAJapanDemerara Sugar161*167*154*Alcohol47*48*83Powdered Milk69*49*197*Value addedto grainproductionFrozen Chicken PartsPorkFrozen Beef95*51*177*17*02612310*50Tobacco25*3500Orange Juice1545*21(*) Specific tariff converted to Ad Valorem Equivalent (AVE).Underlined numbers indicate the existence Special Safeguard Measures (SSG).indicates sanitary restrictions that act as commercial barriers.Ssource: WTO, APEC, COMTRADE, USITC, TARIC12 and ICONEAssociação Brasileira das Indústrias de Óleos Vegetais 19

Vision of the SectorABIOVEProtectionism leads to monocultureMonocultures increase the incidence of pests and, consequently,the use of agri-chemicals. Oilworld: “A proper rotation isrecommended to reduce disease infestation and also preserve thequality and productivity of the agricultural land.”The Brazilian government does not grant subsidies to maintain theenvironment, producer income (price guarantees) or cover lossesfrom adverse climatic conditions (agricultural insurance).Associação Brasileira das Indústrias de Óleos Vegetais 21

Vision of the SectorABIOVEAdequate use of agri-chemicalsMany producers use Integrated Pest Control. Embrapa and ResearchFoundations develop varieties that are resistant to disease.Soybean producers are aware that excessive or inadequate use ofagri-chemicals causes economic losses and environmental damage.Generally speaking, producers use agri-chemicals correctly andBrazil has successfully developed a program for collectingpackaging.In many countries low-flying planes are used to apply agri-chemicals,avoiding the spread of the product to other areas.Associação Brasileira das Indústrias de Óleos Vegetais 22

Vision of the SectorABIOVEAdequate use of agri-chemicalsA small number of applications are made at inadequate moments,when the wind can accidentally spread the product over unplannedareas.More studies are necessary to check whether potable water iscontaminated by the inadequate use of agri-chemicals.The Ministries of Health, Environment and Agriculture control the useof agri-chemicals and suspend commercialization if problems occur.Associação Brasileira das Indústrias de Óleos Vegetais 23

Vision of the SectorABIOVEThere is No Slave LaborLabor used in soybean production is highly specialized and well paid.• The University of Florida paid US$6 for human guinea-pigs – 100 bites bymalaria-transmitting mosquitoes (this is degrading work!).The Ministry of Labor regularly inspect farms and publish on the Internetlists of cases with work analogous to slavery.As a precaution the soybean processing industries stipulate in their rawmaterial purchase contracts that these contracts are void if slave labor isused.The vegetable oils sector signed the National Pact for the Erradication ofSlave Labor.Associação Brasileira das Indústrias de Óleos Vegetais 24

Vision of the SectorABIOVEHarmony with Local PopulationApproximately 47% of Legal Amazon correspond to land in dispute. Thisis the main source of the problems.Soybean production is not an itinerant agriculture. The farmer investsheavily in soil correction and infrastructure on the property s/heacquired, with its documents in order and without any kind ofintimidation.Traditional agriculture is not threatened, and the local populationbenefits from construction of schools, day-care centers, hospitals, etc.Towns in Mato Grosso which produce soybeans have the best Index ofHuman Development – IDH.Associação Brasileira das Indústrias de Óleos Vegetais 25

The Sustainability ChallengeABIOVEBrazil has the second largest extension of forest in theworld.Preservation of biodiversity transcends any specificsoybean program and necessarily involves the creation offinancial incentives for preservation of the environment(e.g., Clean Development Market / Kyoto Protocol).Soybeans are a commodity (the price of a ton of soybeansis equivalent to a kilo of Swiss chocolate).Proteaginous crops are the cheapest source of protein inthe world.Soybeans do not cause the destruction of the AmazonForest; they occupy only 1.2% of Legal Amazon.Associação Brasileira das Indústrias de Óleos Vegetais 26

ABIOVEThe Sustainability ChallengeSoybeans play an important role in Brazil’s social andeconomic development.A balance between economic, social and environmentalaspects is needed.The vegetable oils sector supports the implementation ofvoluntary and remunerated certification systems, based onsustainability criteria agreed to by the parties involved.Associação Brasileira das Indústrias de Óleos Vegetais 27

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