December 16, 2010

Brazilian Producers Want More Emphasis on Conventional Soy

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

Several groups in Mato Grosso are joining forces to promote the production of conventional soybeans (non-GM) in the state. With an initial investment of R$ 1 million, Embrapa, the Brazilian non-GM Producers Association (Abrange), and the Mato Grosso Association of Soybean and Corn Producers (Aprosoja) are promoting the development of more conventional soybean varieties. The group set up a series of 24 demonstration plots this growing season in 18 different regions of the state where 24 conventional soybean varieties will be evaluated. A series of field days will be held throughout the growing season promoting the benefits of conventional soybeans. The goal of the group is to maintain 15% of the soybean production in Mato Grosso as conventional varieties.

Members of Abrange feel there will continue to be niche market for conventional soybeans especially with their European customers. European buyers are already paying a premium of approximately US$ 0.55 per bushel for the conventional soybeans.

In order for such a program to succeed, conventional and GM soybeans need to be kept separate throughout the entire production and transportation process. Unfortunately, that is currently not the case in most of Brazil. In most of Brazil, conventional soybeans and conventional corn are only kept separate until the grain enters commercial grain storage units where the two types of grain are blended together essentially making the entire storage unit GM grain. In reality, 90% of Brazil's grain production can now be considered GM grain due to this blending.

The only place in Brazil where conventional soybeans are kept separate all the way through the storage and transportation system are at some of the large cooperatives located in southern Brazil. Coamo for instance, which is the largest cooperative in Latin America and located in Campo Mourao, Parana has been struggling to keep conventional soybeans separate from GM varieties in order for them to meet commitments to their European customers to supply them with conventional soybean meal. They are able to do it because they are close to the ports and they maintain their own storage facilities at the port.

Their efforts to meet these commitments are becoming more difficult because their farmer-members do not have the needed infrastructure to keep the two types of grain separate and the amount of GM soybean production in the region continues to increase. The amount of conventional soybean production in the cooperative's draw area fell from 32% during the 2009/10 growing season to 12% during the current growing season. Unless higher premiums are paid for conventional soybeans, the group's goal of keeping 15% of Brazil's soybean production as non-GM may be difficult to achieve.