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August 14, 2020

Cofco and World Bank push Sustainable Soy Production in NE Brazil

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

As Brazilian farmers prepare for their 2020/21 growing season, the soybean acreage in Brazil is expected to increase by approximately 4% to as much as 38.5 million hectares (95.0 million acres). A lot of the expanded soybean acreage in central Brazil will come from the conversion of degraded pastures to row crop production. In northeastern Brazil, which is a major agricultural frontier in Brazil, much of the increased soybean acreage will come from the clearing of new land.

Northeastern Brazil, which is part of the cerrado biome, is comprised of the states of Maranhao, Tocantins, Piaui, and Bahia which is collectively known as Matopiba. During the 2019/20 growing season, this region planted 4.3 million hectares of soybeans, 1.7 million hectares of corn, and 731,000 hectares of dry beans along with minor amounts of other crops.

Across the agricultural sector in Brazil, the emphasis is on increasing the productivity on land that has already been cleared as a way to reduce the pressure on deforestation. In other words, make Brazilian agricultural production more sustainable. This is of particular importance for European customers who purchase Brazilian agricultural products.

In order to promote more sustainable agriculture in northeastern Brazil, the International Financing Corporation of the World Bank (IFC) is teaming up with the Chinese company Cofco International of Brazil to ensure that farmers providing grain for Cofco International adhere to sustainable agricultural production criteria. The objective of this joint program is to increase productivity on existing land, maintain conservation areas, and adhering to the Soybean Moratorium where grain companies in Brazil pledge not to purchase any soybeans produced on land that was cleared illegally.

Cofco and IFC will work with the Brazilian company Agrosatelite, which specializes in remote sensing, to monitor if their farmer suppliers are adhering to the Rural Environmental Registry (CAR) and only clearing land that has been authorized. Cofco and IFC hope to enroll 85% of their farmer suppliers in the program by 2021 and 100% by 2023.

Cofco announced that their long term goal is to bypass the international grain companies and to purchase their grain directly from their farmer suppliers.