Opinion: Cargill and Bunge’s very, very bad day

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OK … let’s begin by stating some rather obvious facts:

  1. Soybean trading and processing is HUGE business in Brazil. And there is plenty of financial incentive to expand Brazilian soybean acres – either legally or illegally.  The Food and Agriculture Organization for the United Nations’ OECD/FAO Agricultural Outlook projects an increase in Brazilian soybean production of 38 percent over the next ten years.  
  2. Cargill and Bunge have made boat loads of money processing and exporting Brazilian soybeans.  
  3. Brazilian farmers are more than willing to circumvent laws protecting Brazil’s forests and savanna.  Most recently, rapid agricultural expansion is occurring in the region of Matopiba, the northern part of the ecologically important Cerrado biome.  Soybean production in this area doubled in the first half of this decade from 3.5 to 7.1 million tons. Eleven percent of Brazil’s soybeans come from the Matopiba.  And a lot of the illegal deforestation is happening on private property, making regulation and preservation difficult.
  4. Cargill and Bunge have made promises not to buy any/nada/zero/bagal soybeans grown from illegally deforested  Brazilian land. But the devil is in the details. Or lack of details.  Bunge and Cargill don’t say whether their promise covers all vegetation of the Cerrado – forests, grassland, Savannah and grassland-tree mosaics.
  5. For the most part, the Brazilian government hasn’t cracked down on what has been going on right under their noses – soybeans grown in illegally deforested areas making their way to Bunge and Cargill’s supply-chain and onto the world markets … until now.

Yup.  It’s Operation Soy Sauce.  The joint investigation conducted by the Brazilian Institute of the Environment and Renewable Natural Resources caught Bunge and Cargill soybean (uh, red) handed along with three domestic operations buying just over 6 million pounds of soybeans from embargoed fields where farmers had illegally cleared native vegetation.

The farmers – thinking no one was watching – continued to farm on the embargoed land. Oops.

Bunge, Cargill and the three domestic operations – ABC Indústria e Comércio SA, JJ Samar Agronegócios Eireli, and Uniggel Proteção de Plantas Ltda – were jointly fined $29 million for buying the beans.

When initially contacted by reporters on the fines Bunge and Cargill did what all companies caught with their hand in the cookie jar do – say nothing.

Cargill and Bunge should had left it there.  Instead the two companies offered up some defenses for their actions.  

Cargill said it has internal processes that prevent illegal soybean purchases from embargoed areas, the IBAMA fine is under review and oh yeah the company will take appropriate action.  

Bunge went on the offense, disputing it purchased illegal soybeans and promising to “pursue all available channels to clarify this matter.”

But the truth of the matter is that the fines suggest that there are huge problems with Bunge and Cargill’s internal systems for tracking and monitoring their supplies.  Or worse – that Bunge and Cargill did know the soybeans were illegal and bought them anyway.

Either is unacceptable. I don’t think the fine – a drop in the profit bucket – will do much one way or another to stop illegal deforestation in Brazil.  

But just perhaps Bunge and Cargill can be shamed into being more diligent.  One can hope.

About Dave Dickey

Dave Dickey

Dickey spent nearly 30 years at University of Illinois at Urbana-Champaign’s NPR member station WILL-AM 580 where he won a dozen Associated Press awards for his reporting. For 13 years, he directed Illinois Public Media’s agriculture programming. His weekly column for Big Ag Watch covers agriculture and related issues including politics, government, environment and labor. Email him at dave.dickey@investigatemidwest.org.

This column reflects the writer’s own opinions and not those of Big Ag Watch.

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