When The Nature Conservancy (TNC) approached Cargill to reduce the impact of Soy farming on deforestation in Brazil, their intent was pure: we need to stop this habitat destruction. Bolstered by Greenpeace’s successful campaign to convince McDonald’s to pressure their beef suppliers, namely Cargill, to reduce the impacts of their cattle feed on deforestion, TNC approached an economically pressured Cargill about how to manage the supply chain of their Brazilian soy production in a way that could reduce the negative impacts to biodiversity in the region.
This well intended partnership, which gave birth to the Responsible Soy program , appeared to be a win-win: Cargill uses its weight in the region to reduce deforestation by buying soy from land that was previously cleared, such as cattle ranches, rather than farms on newly deforested land. And TNC can build on the partnership to expand and partner with other companies, all the while having a positive impact on the Cerrado and Amazon.
But the economics of Soy, driven in large part by a Chinese market demand that values price stability over sustainability, resulted in unintended consquences, as detailed by researchers from McGill:
Soybean cultivation carries the political weight necessary to induce infrastructure improvements, which in turn stimulates crop expansion. Further, Nepstad et al (2006) suggest that growth of the Brazilian soy industry may have indirectly led to the expansion of the cattle herd. According to Nepstad et al (2006), soy has driven up land prices in the Amazon (5–10 fold in many areas of Mato Grosso), allowing many cattle ranchers to sell valuable holdings at enormous capital gains and purchase new land further north and expand their herd further. This hypothesis is consistent with our spatial analysis showing northward displacement of pasture, with declining pasture in parts of Mato Grosso, and increasing pasture further north (figures 1and 4), and also supported by findings from other recent studies (Dros 2004, Cattaneo 2008). Our statistical analysis of the relationship between soy/cattle price and deforestation lends further credence to this hypothesis (figure 6). It shows that while the relationship between cattle price and deforestation has been more or less stable, soy has become increasingly related to deforestation over time. In summary, even if the proximate cause of deforestation was mainly ranching, it is likely that soy cultivation is a major underlying cause (http://iopscience.iop.org/1748-9326/5/2/024002/fulltext/)
The lesson is not to get together for a partnership between large corporations and non-profits, if anything the relationship between Cargill and TNC has likely increased environmental awareness within Cargill, a key cultural shift essential to moving us towards a more sustainable planet. The problem lies in creating these partnerships without a consideration of how a change in a major economic player will impact the other parts of the local economy. The economy works much like an ecosystem, you can’t impact one section without changing many others.
Future projects would be wise to consider the downstream envrio-economic impacts that could result from a change in policy among a corporate behemoth in developing economies, and the lessons learned in the Cerrado could then be used to model future plans elsewhere.