November 8, 2011

Pastureland Used for Soybean Expansion in Amazon Region

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

The Brazilian state of Rondonia, which is located in the southern Amazon Region, is the area deepest inside the Amazon where soybeans are currently being produced. The soybean acreage in the state is expected to increase 10% this growing season from 132,000 hectares to 145,000 hectares. Over 90% of the soybean production in the state is located in the southern region of the state bordering the state of Mato Grosso. Virtually all the soybeans in the state are being grown in areas that were formally pastureland.

There has been a concerted effort in Brazil in recent years to increase soybean production by increasing the productivity per acre instead of clearing new land for increased production. If a farmer or rancher wants to increase his soybean acreage, the preferred method now is to move into areas of degraded pastures thus avoiding deforestation.

Farmers are being forced to rethink their expansion plans due to new stricter environmental regulations. These new regulations require the protection of the headwaters of streams and rivers, as well as the margins of rivers, and the sides and tops of mountains. These protected areas must remain in native vegetation as a way to minimize soil erosion and environmental damage.

In Rondonia, Embrapa is promoting a program called Crops-Livestock-Forest (iLPF). Researchers feel they have developed a method to rotate crop production, cattle grazing, and reforestation which minimizes environmental damage while improving the soil and generating additional income and jobs at the same time.

Another unique feature of soybean production in the state is the fact that 95% of the soybeans are conventional (non-GMO). According to researchers from Embrapa, Rondonia is the state with the least amount of GMO soybean production and they are committing additional resources to keep the state basically GMO-free. The reason why so few GMO soybeans are grown in the state is very simple. Nearly all the soybeans exported from the state move through the Amazon River port of Itacoatiara and the port has been designated as GMO-free. With no GMO soybeans allowed at the port, the exporters can guarantee to their customers that they will be receiving only conventional soybeans.

There continues to be a niche market for conventional soybeans especially in the European Union and the European importers are willing to pay a premium to guarantee non-GMO soybeans. The premium generally is in the range of US$ 0.50 per bushel.

Embrapa is committed to helping maintain conventional soybean production in Brazil by increasing their efforts to develop conventional soybean varieties geared for the non-GMO market. In the state of Rondonia, they have set up four demonstration areas in order to showcase 16 new conventional soybean varieties. They have also increased their breeding efforts to develop conventional soybean varieties suitable for production in the state of Mato Grosso as well because soybean produced in western Mato Grosso can also be exported out of Brazil via the Port of Itacoatiara.