Cargill Inc. is putting up $30 million to fund new ideas for ending deforestation in Brazil, where the conflict between economic growth and environmental protection remains a global flash point.
The Minnetonka-based agribusiness, a key player in Brazilian soy production, said Thursday that the industry will fail to end deforestation by 2020 as previously hoped, and that more companies, governments and organizations need to band together to make a more concerted effort if real solutions are to be found.
"We can all agree, and certainly the science is very clear, the climate is changing and there is an urgent need to take action to end deforestation," said Ruth Kimmelshue, Cargill's head of supply chain and chief sustainability officer.
Cargill blames the slow progress on the complexities of the problem, while some environmental groups blame commodity traders such as Cargill for not being more stringent with their suppliers.
Soybean farming has continued encroaching on important ecosystems in Brazil — including the Amazon, Cerrado and Gran Chaco — leading to the destruction of critical forests and native vegetations. Demand for the crop is growing as the world's appetite for meat grows. Soy is often a base ingredient in livestock feed.
This growing demand encourages many South American farmers to expand their cropland. Cargill is in a powerful position as the world's largest commodities trader and has taken steps in recent years to slow deforestation in those regions.
But, the company said, it hasn't been enough.
Cargill, its peers and international organizations will fall short of reaching their goals, Kimmelshue said.
"I'm not going to admit defeat, but we can all be reasonable people and see that we have significantly more work to do," she said Thursday.
More than a decade ago, the company and its industry peers agreed to a purchase moratorium on soybeans grown on newly deforested land in the Amazon. Cargill also monitors the forest activity using geospatial tools.
In 2014, Cargill signed the United Nations' New York Declaration on Forests, the first global pledge to end and reverse the loss of forests.
Soy production in South America is proving to be more difficult to make environmentally sound than Cargill's other food supply chains, she said. "We don't believe our industry has the answers to this complex challenge today," Kimmelshue said.
Mighty Earth, a leading environmental group working on this issue and pushing Cargill to do more, says that response shirks the company's true responsibility.
"[Cargill's] plan purposefully lacks a commitment to stop buying from producers who contribute to deforestation," said Glenn Hurowitz, chief executive of Mighty Earth. "Cargill is fiddling while South America burns."
Cargill outlined parameters to measure its progress related to the destruction of forests in several critical biomes of Brazil and asked its competitors to join in.
Hurowitz, who said he has been in direct contact for months with Kimmelshue and Cargill chief executive Dave MacLennan, said he is disappointed Cargill stopped short of implementing a soy moratorium against "rogue actors" in the Cerrado and Gran Chaco.
The Cerrado is lesser known than the Amazon, but it is where soy farming is most quickly expanding in Brazil, accounting for more than 37% of the country's production. Soy is now Brazil's most important export, surpassing oil and minerals, with China and the European Union being its largest export markets. Brazil trails only the U.S. in soybean production.
This rapid growth of agriculture in the Cerrado has destroyed nearly half its native vegetation, according to an industry-commissioned study.
"Soy moratoriums are hugely effective. It worked in the Amazon," Hurowitz said. "We and every other environmental group have been urging them to implement such a requirement for the last five years."
Focus has shifted to the Cerrado as a biodiversity hot spot home to more than 4,800 species of plants and vertebrates that cannot be found anywhere else on Earth, according to a report published last week by Cargill.
The company said Thursday it is looking for a third-party entity to lead what it hopes will be a cross-sector coalition.
"We are prepared to spend the money as soon as possible and as soon as we see ideas that can drive substantive change," Kimmelshue said.
While Cargill may not be a household name, its influence and role in the global food system is massive.
"I think you are all aware that Cargill is a big company," Kimmelshue said, "But we feel very intensely that deforestation is bigger than even Cargill."
Kimmelshue said Cargill doesn't believe leaving the region is the solution because others would continue to buy crops grown on deforested land.
"Exiting high-risk areas will not solve the problem. It simply will move it," Kimmelshue said. "We are hoping that we will rally the industry."
But Hurowitz believes that if Cargill took a harder line, some of its competitors, such as White Plains, N.Y.-based Bunge Ltd., a major soybean processor, would do so as well. He said both Cargill and Bunge have expressed reluctance to implement a moratorium without the other also doing the same.
"Neither is willing to go first with meaningful action," he said. "The soy traders are meeting regularly about these issues, but they have dithered for two years in those discussions. The only meaningful commitment that's in their so-called action plan is to obey the law. They say the only way to suspend a supplier is illegal activity."
The Rainforest Alliance, another organization that fights deforestation, declined to comment on Cargill's statements.
Cargill, in its most recent report on the region, said there's at least 60 million acres of land in the Cerrado that's already been converted to agriculture that could be improved through better productivity.
Farmers can improve yields on existing cropland so that the expansion into forest land doesn't continue.
"We believe more must be done," said MacLennan, the Cargill CEO, in a blog post published Thursday. "Industry, local communities and governments must find and agree upon a shared solution."