Interactions between Global Supply Chains, Land Use, & Governance: The Case of Soybean Production in...
If you can't read please download the document
Interactions between Global Supply Chains, Land Use, & Governance: The Case of Soybean Production in South America Rachael D. Garrett Postdoctoral Fellow
Interactions between Global Supply Chains, Land Use, &
Governance: The Case of Soybean Production in South America Rachael
D. Garrett Postdoctoral Fellow in Sustainability Science Harvard
University [email protected]
Slide 2
Data: FAO STAT Population & income growth &
urbanization are increasing demand for livestock products
Slide 3
Notes: Yields are country averages. Data: FAOSTAT Soybean area
and yields by country -1986 & 2010 Increased demand met both by
increased yields & increased area, esp. in Argentina &
Brazil Garrett, Rueda, Lambin Environ. Research Letters,
Forthcoming
Slide 4
( KM 2 ) 2000-2010 500 Clark et al. 2010 Land cover change in
South America from Agricultural Expansion Woody Vegetation
AreaAgriculture & Herbaceous Area Counties w/ 50,000 ha or more
of agricultural expansion in last 10 years
Slide 5
What can be done to halt land cover change in the Amazon,
Cerrado, and Chaco for cropland expansion, while still allowing
Brazil to develop (via agricultural intensification & value
added activities)? Motivating question
Slide 6
Interactions between the supply chain actors, institutions,
land use Knowledge gaps Non-linear feedbacks that can lead to rapid
and unexpected changes
Slide 7
Questions Addressed How do consumer preferences in Europe
influence trade & supply chain infrastructure in Brazil? How
does supply chain infrastructure influence Brazilian farmers
ability to access premiums for environmentally responsible soy? How
does competition & diversity in the supply chain influence
prices, rules, & information faced by farmers, thereby
influencing incentives to expand cropland?
Slide 8
Questions Addressed How do consumer preferences in Europe
influence trade & supply chain infrastructure in Brazil? How
does supply chain infrastructure influence Brazilian farmers
ability to access premiums for environmentally responsible soy? How
does competition & diversity in the supply chain influence
prices, rules, & information faced by farmers, thereby
influencing incentives to expand cropland?
Slide 9
European Soy Preferences > 70% of Japanese & European
consumers prefer foods that do not contain GM materials GM imports
are not banned, but must be labeled Meat & dairy products are
excluded Total demand for certified non-GM soy is about 10% of
world export market Now also asking for soybeans that do not result
in deforestation Environmentally Responsible Shift trade patterns
Incentivize land use through price premiums Non-GM &
eco-certification programs Potential Effects of Preferences
Slide 10
Notes: Total includes only North and South America. Data:
Isaaa.org Total Non-GM soy area by country 1996 & 2010 80%
decrease Non-GM soy area as % of total soy area Production of
non-GM soy Garrett, Rueda, Lambin Environ. Research Letters,
Forthcoming
Slide 11
Many EU countries with a strong non-GM preference shifted their
imports to Brazil and away from countries that decreased their non-
GM soy area, despite prices favoring US & Argentina Garrett,
Rueda, Lambin Environ. Research Letters, Forthcoming
Slide 12
RTRS area by state - 2012 Data sources: Responsiblesoy.org,
proterrafoundation.org, & direct communication >160,000
hectares controlled by Maggi Group
CountryArgentinaBoliviaBrazilParaguayUruguayCanadaChinaIndiaUSA
ProTerra Ha --1,100,000------ RTRS123,687-230,7682,765372--29,801-
Total eco-certified area by country - 2012
Slide 13
Brazils continued production of non-GM caused EU importers to
shift trade to this country The development of supply chains able
to segregate GM from non-GM soybeans gave Brazil an advantage in
producing eco-certified soy Mato Grosso has been state most able to
capitalize on certifications; especially large traders that have
highly vertically integrated supply chains Ironic because Mato
Grosso is the state that experienced highest levels of direct
deforestation for soy in 2000-2010 period (Macedo et al 2012)
Conclusions
Slide 14
Question Addressed How does competition & diversity in the
supply chain influence prices, rules, & information faced by
farmers, thereby influencing incentives to expand cropland?
Slide 15
Output & Prices Ricardian & Thunian theories of rent
(profit) Biophysical conditions Distance from markets Technology
Incentives to expand
Slide 16
New economic geography theory - Process of agglomeration
Agglomeration creates positive externalities -Better prices, info,
technology Influences incentives to expand Profit from existing
biophysical conditions & transportation costs Number of
producers that location in region Number of specialized
agricultural firms that can be supported Variety of technology
& services produced in the city Garrett, Lambin, Naylor Land
Use Policy, 2013; (based on Fujitsa & Krugman 1996)
Slide 17
Garrett, Lambin, Naylor Land Use Policy, 2013 Case studies
Input reseller 1 Farmer networks & access to services Input
reseller Sojeiro Cargill Aves Para Syndicate HSBC Sojeiro Cargill
Nideira ADM Bunge Noble Caramuru COOP. Sorriso APROSOJA Syndicate
EMBRAPA FIAGRIL Dreyfus Maggi Group SICRED Rabobank Bank of Brazil
Input reseller 2 Santarm: good biophysical condtions low transport
costs Sorriso: good biophysical conditions high transport
costs
Slide 18
Santarm Sorriso Crop Area in Case Studies Source: IBGE 63% of
area in soy