Agribusiness giant Cargill on Monday moved forward a goal to eliminate deforestation and land conversion from both direct and indirect supply chains in key South American countries, including Brazil, by five years.
The announcement impacts vital commodities — soy, corn, wheat and cotton — and comes just days before the start of COP28, the large global climate summit, in Dubai, United Arab Emirates.
"We are actively shaping a future where critical ecosystems will be protected for generations to come," Pilar Cruz, Cargill's chief sustainability officer, said in a statement.
But the push also comes after months of renewed and consistent criticism of the company by environmental groups — including protests at Cargill's Minnetonka headquarters — over its role in sourcing soy from Brazil's vulnerable and carbon-rich ecosystems.
When Michael Cordonnier arrived in Brazil's Matto Grosso state 50 years ago with the Peace Corps, he saw cattle ranches, dirt roads and Indigenous communities.
He didn't see soybeans.
"Soybeans were photoperiodic," said Cordonnier, now an Illinois-based agronomist and grain consultant specializing in South America. "When you're closer to the equator, you don't have that change [in sunlight to trigger flowering]."
But the bonanza was coming. In the ensuing decades, Brazil witnessed an explosion in soybeans, the utility crop used in fuels, plastics and animal feed. This growth brought many Brazilian farmers new prosperity as global commodity traders set up operations. But it also accelerated deforestation and climate change.
This tension — between local economic independence and the international battle against global warming — is increasingly landing at the doorstep of the powerful middlemen, including Cargill, that buy the crops and create new markets for the product.
Cargill has made a number of pledges aimed at eliminating deforestation — some it has kept, others it has not. Monday's pledge addresses some recent criticisms that the company hasn't been aggressive enough in tamping down on environmentally harmful industry practices.
Since 1965, the global grain trader with a $177 billion in revenue last year has been buying and selling grain from farmers in Brazil. In the last few years, Cargill surpassed rival Bunge as the largest exporting trader of soybeans in Brazil.
Rather than focusing on the buyers — such as Chinese hog producers that use the soymeal for feed — or the growers and speculators clearing the land, many critics and activists have applied public pressure to these grain buyers to thwart deforestation and the clearing of virgin lands in the region.
"What's the point of naming and shaming what some dude in Brazil does versus the American capitalist who is trying to get the lowest price from what that guy is marketing to some tofu producer in China?" said David Samuels, a political science professor at the University of Minnesota who studies Brazil. "[Cargill's a] privately held company. It's a family that controls it."
Lisa Rausch, a scientist for the Center for Sustainability and the Global Environment at the University of Wisconsin in Madison, said speculators sell parcels to cattle producers who graze animals for a few seasons. Within five years, the land is often covered by leafy, green soybeans.
This conversion tactic is a pernicious loophole to deforestation pledges, environmental groups say.
Increasingly, Cargill is responding to these calls for accountability with public commitments.
Earlier this month, Cargill released its annual environmental, social and governance (ESG) report, reiterating its pledge made in 2022 to end deforestation — but not conversion — in its South American soy supply chain by 2025. Conversion in this region, the company pledged, would end by 2030.
But Monday's announcement shortens that timeline, making its entire soy supply deforestation- and conversion-free in the next two years.
They're also spending $100 million to equip Brazilian farmers with technical help, restore farmed lands and create a complex, satellite-based map of their South American soy supply chain as a way to track land changes.
"I'm pleased to say that we have mapped out 100% of our supply chain's direct suppliers in Brazil, which I think is huge because now we can see it," Cargill's Cruz told the Star Tribune in July. "When there's a deviation or suppliers are not following our policies, then, of course, we take action."
Last year alone, Cargill blocked nearly 1,500 farms for violating environmental protocols or labor laws. But environmental and Indigenous groups have so far remained unimpressed by the company's voluntary pledges.
Speaking at a June news conference near Cargill's headquarters, Todd Paglia, executive director of environmental group Stand.Earth, said, "Cargill presents both the greatest opportunity and the greatest obstacle to removing the destruction of nature from the agricultural supply chain."
Brazil surpasses U.S.
Brazil, once known for bananas and coffee beans, now has more than a billion acres in arable land, according to estimates from the U.S. Department of Agriculture.
In 2017, Brazil surpassed the U.S. as the world's top soybean exporter. In 2023, they'll do the same with corn.
"They can grow two, sometimes three crops in any one year," said Joe Smentek, Minnesota Soybean Growers Association executive director. "And they don't face nearly any of the environmental regulations that we face in Minnesota."
Most of this growth has happened on land once relatively untouched by humans. More than a quarter of all Brazil's soybeans are planted in Matto Grosso, a state blanketed by rainforest, savanna and wetlands.
In 2006, the world's largest grain traders — from Cargill to Bunge and Brazil's Amaggi — enacted the soy moratorium, curtailing logging for new soybean fields in the Amazon rainforest, the world's biggest carbon sink.
But that moratorium, Rausch said, doesn't apply in the Cerrado, a biodiverse savanna to the rainforest's east.
During the past decade, researchers have watched the soybean market expand.
"In 2017, the acreage was about 32 million hectares, right on part with the U.S. It's now 45 million [acres]," said Matthew Hansen, director of the Global Land Analysis and Discovery laboratory at the University of Maryland. "You're already number one in the world. Then you increase it by a third."
The boom has meant steady business for a bevy of trading giants.
Pledges, penalties and politics
When a soybean is crushed, its oil provides the basis for biodiesel and food. Most soybean meal, however, feeds livestock. Some 70% of Brazil's exported soybeans are shipped to feed pigs in China.
"Brazil is probably one of the most important countries, as it relates to production of agricultural commodities that feed the world," Cargill's Cruz said.
But critics — and even some customers — say food production is also destroying ecosystems.
A decade ago, the world's largest food merchants pledged to end deforestation by 2020. But in the summer of 2019, Cargill announced the Consumer Goods Forum, which also includes General Mills and McDonald's, would miss the goal, citing the problem's complexity.
"Protocols are usually voluntary. There's no penalty associated with them," Hansen said. "You can see these protocols are not doing so great."
The European Union is now requiring traders to remove deforestation from supply lines for cocoa, rubber and soy. Other nations, such as Norway, have sought to remove not only deforestation from their soy consumption but also conversion.
In June, individuals with Stand.Earth, headquartered in San Francisco and Vancouver, British Columbia, delivered boxes of documents — one for each of the family members who collectively own more than 80% of Cargill — to the company's Minnesota base, accusing the company of falling short of its own commitments.
Months later, in October, the group accompanied Beka Munduruku, an Indigenous leader and climate activist from the Amazon basin, as she spoke outside Cargill's headquarters.
"I have never seen … the huge amounts of dust that come in a place that was green before," Munduruku said. "They're killing the forest."
This latest campaign coincides with a revival in environmental protections by Brazil's federal government.
A year ago, Brazilian voters returned leftist former President Luiz Inácio Lula da Silva to the presidency, ousting Jair Bolsonaro, a nationalist who drew international condemnation when wildfires engulfed the nation in 2019.
During Lula's first six months, deforestation in the rainforest fell by 33.6%, with increased enforcement of the country's forest protections.
But agricultural activities in the land-rich, low-cost country account for nearly 30% of Brazil's GDP.
For comparison, the U.S. ag and food sector makes up a little more than 5% of the nation's GDP.
"Domestic politics is being different from the previous president and his lawless approach to deforestation," Samuels said. "But [Lula's] not going to shut down the expansion of agriculture."
Closing indirect supply gap
Cargill's latest ESG report published this month, announcing 94% of direct suppliers of soy in Brazil are deforestation- and conversion-free.
But direct suppliers, the company acknowledges, represent 64% of the total volume of soy Cargill handles from Brazil. More than a third of the total soy sellers — or more than 5,000 suppliers — are indirect.
Cargill seeks to promote "due diligence" across the soy sector, so farmers and sellers have common expectations, regardless of whether they're selling to Cargill or another trader. By the 2024 growing season, indirect suppliers will be held accountable for sustainable cropping practices, the company says.
Western grain traders arrived in Brazil in the mid-20th century to develop resources, plant crops and raise cattle. They've outlasted presidential administrations and even constitutions. But climate change may be their thorniest challenge yet.
Antonio Ioris, a professor at Cardiff University in Wales and a writer on Brazilian politics, said global ag firms operating in Brazil are the one constant.
"Agribusiness is the real power," Ioris said. "They are the real rulers of the universe in Brazil."
But Ioris and others note a heating planet has meant less dense precipitation cycles in places such as the Amazon, frustrating farmers and merchants alike. Agribusinesses have taken note.
All the major South American soy buyers — ArcherDaniels-Midland, Bunge, China's state-owned COFCO — have made pledges to end deforestation from their supply lines. But unpacking these pledges can be difficult.
In July, after being asked why Cargill has not pursued more aggressive pledges, Cruz recited a statistic.
"There are about 800 million people in the world who go to sleep hungry," Cruz said. "Doing the math, by the time we finish this half-an-hour discussion, 450 people would have died because they don't have access to food."
Meanwhile, farmers keep planting soybeans in South America. Weeks ago, the USDA released another report on Brazil's farmers, projecting another record harvest.
"South America makes the soybean market," Cordonnier said. "Brazil will continue to expand soybean production for the rest of our lifetimes."
Star Tribune staff writer Jennifer Bjorhus contributed to this report.