Most of the profit from soybean production in Brazil goes abroad

julho, 20 2023

Technical note reveals that despite the intensification of soybean production in Brazil, most of the profit from the chain does not stay in the country
By WWF-Brazil 

The billionaire soybean chain market in Brazil generated, in the 2019/2020 agricultural year alone, a gross revenue of US $86.9 billion, of which only US $31.6 billion were absorbed by Brazilian business groups. However, despite receiving subsidies and tax exemptions in Brazil, those who absorb the largest share of the profits generated are large international corporations, mainly American, European and Chinese.

These are some data collected by WWF-Brazil technical note, which compiles relevant studies on the soybean chain and reveals that in addition to the disproportionality in profits sharing, there is a set of social and environmental burdens and impacts that end up being absorbed and internalized almost exclusively by the Brazilian society.

The study explains that large foreign corporations dedicate significant effort to expand their control of the different segments associated with soybean production, including the markets for seeds, pesticides, fertilizers, agricultural machinery, processing, transportation, financing and export. Among the main strategies to gain control of the segment are the processes for merger and acquisition of Brazilian companies.

The result of this control acquired by multinationals is the reduction of the Brazilian participation in the revenue generated and in the production governance model. Thus, while the profit goes abroad, the socio-environmental loss generated by the accelerated expansion of the area cultivated with soybeans remains in Brazil. The EU imports of agricultural commodities, for example, were linked to the deforestation of more than 145,000 hectares of tropical ecosystems in 2018.

The Cerrado remains unprotected

According to the study, the growing global demand for soybeans stimulates the expansion of the Brazilian production. The advance of the soybean frontier increases the pressure on natural ecosystems. The Cerrado, for example, is among the biomes most threatened by this expansion. Between 1985 and 2021, there were 8.1 million hectares of new soybean plantations, an area larger than the surface of Belgium and the Netherlands combined. 

The recent figures are even more alarming. Data from PRODES, of the National Institute for Space Research (INPE), show that the Cerrado suffered the deforestation and conversion of 1.07 million hectares in 2022, a 69% greater devastation than in 2019. The biome has already lost about half of its native vegetation over the past few decades.

“The Cerrado is one of the most threatened ecosystems in the world, and one of the main frontiers of deforestation caused by agribusiness at a global level”, highlights Edegar de Oliveira, director of Ecosystem Conservation and Restoration at WWF-Brazil. According to him, as a result, "social conflicts are growing and the collapse of key environmental services such as 'water production' is already quite evident and well-documented by public agencies and scientific groups. Moreover, and sadly, the loss of biodiversity in the biome has the potential to generate one of the most serious mass extinction processes of species on the planet”, he concludes.

While the Amazon Soy Moratorium, a voluntary agreement between the private sector, NGOs and the Federal Government, prevented 9,000 to 27,000 km² of deforestation in the Amazon, soybean cultivation has expanded mainly in the Cerrado, where there is no zero-deforestation agreement with the private sector, highlights the technical note. The Cerrado has conservation units in less than 10% of its protected area, and only about 3% of them in the full protection category. The biome is also poorly protected by the Forest Code, which allows up to 80% of its destruction.

About WWF-Brazil  

WWF-Brazil is a Brazilian NGO that has been working collectively with civil society partners, academia, governments and companies throughout the country for 26 years to fight socio-environmental degradation and protect the lives of people and nature. We are connected in an interdependent network that seeks urgent solutions to the climate emergency. Donate:
The study explains that large foreign corporations dedicate significant effort to expand their control of the different segments associated with soybean production
© WWF-Brasil/ Adriano Gambarini
Conversion in the Brazilian Cerrado increases by 25% in 2022 and registers the highest rate in 7 years
© Moisés_Muálem/ WWF-Brasil