Governing trade to influence land-use and food systems pathways: The expansion of soybeans-meat complex in the MATOPIBA Brazilian frontier

Case study 14: Governing trade to influence land-use and food systems pathways: The expansion of soybeans-meat complex in the MATOPIBA Brazilian frontier

How trade regimes can be leveraged to improve the sustainability of soybeans-meat complex in the MATOPIBA region of Brazil?

We are experiencing a critical and decisive moment in the Cerrado, where only 47% of its native vegetation remains. Deforestation has significantly accelerated in the past 5 years, surpassing the rate of the Amazon in 2023. Currently, existing legislation is not sufficient to ensure effective protection of its preserved areas. In the long term, the biome may be pushed to collapse, even if illegal deforestation is eradicated.
The Matopiba region stands out as the epicenter of native vegetation conversion, accounting for 75% of Cerrado deforestation in 2023. This agricultural expansion frontier experiences significant ‘leakage’ of grain production from the Amazon, mainly soy, due to legislation allowing deforestation of up to 80% of properties in the Cerrado.
Due to the continuous expansion of soy production for export, trade policy measures can complement environmental protection tools focused on land conservation. We analyzed seven trade policy options that can make food systems in Matopiba more inclusive and sustainable. These measures can be integrated into a set of articulated and integrated interventions in support of the implementation of the Action Plan for Prevention and Control of Deforestation and Fires in the Cerrado Biome – PPCerrado, updated by the Brazilian government in 2023.
After the 2022 elections and the revision of the PPCerrado, we observe a revitalization of political will to adopt trade-related policies that are more favorable to more inclusive and sustainable development patterns.
Through field research and interviews with over 30 actors including farmers, researchers, environmental groups, and public officials in Matopiba and Brasília, we evaluated the timeliness, potential impact, and political feasibility of these seven trade options. Our results suggest policy recommendations.
Five highlights are: (a) Timeliness and political feasibility for the eradication of illegal deforestation, (b) Great interest and need to better understand China’s import policy direction, (c) Low expectations regarding the systemic impact of private certifications, (d) Strong need to include the Cerrado in the future revision of the European legislation on imported deforestation (EUDR) and (e) Need for continuous and gradual adoption of trade measures articulated in support of the PPCerrado.

The EU-Mercosur agreement contains provisions for direct land-use change, with view to inhibit deforestation due to the European imports of soybeans and other crops. But no provision addresses the indirect land-use change that might originate from additional pressure on the input markets due to growing meat exports. It is widely known that the recent expansion of large-scale soy cultivation has caused significant socio-economic and environmental impacts, particularly in the Cerrado areas of the MATOPIBA region of Brazil. Additional to the deforestation of environmentally sensitive areas, there are reported land conflicts, displacements of traditional land users and water conflicts associated with the expansion of soybeans in MATOPIBA, with severe impacts on smallholder livelihoods.

The recent and yet to be implemented EU-Mercosur agreement sets new standards and practices on several agricultural exports, including socio-environmental clauses affecting land-use and food systems and meat export quotas that would increase market access and change competitiveness Mercosur exports. This market expansion might impact the soy-beans-meat complex, both through direct exports and increased demand for agricultural inputs. While this agreement would directly affect only a decreasing share of the Brazilian trade portfolio – considering that the recent expansion of exports from Brazilian agribusiness is due to explosive Asian market demand – indirect effects could be observed through the influence of European standards in global regimes.

Besides international trade agreements, the case study will explore policy frameworks at national and local level, including both public and private measures and standards that impacts on soybeans-meat complex social and environmental sustainability.

Despite being a growing exporter of soybeans and meat, Brazilian ex-ports of beef, poultry and pork to European Union are relatively stable and represent a decreasing proportion of total exports due to booming Asian demand. In some markets (pork and poultry), the regions are in direct competition, while in soybeans, the oilseed is an important feed-stock to European meat value chains.

To delve into how trade regimes can be used to influence land-use and food systems pathways of the soybeans-meat complex in the MATOPIBA region, the case study will:

Review main drivers of the soy-meat complex and how they have influenced land-use and food systems pathways in the region.
Assess stakeholders’ perceptions on the impacts of soy-meat expansion on land-use and food systems dynamics in the region.
Explore the potential trade-offs and synergies between the soy-meat complex dynamics and economic, social, and environmental goals, and how these can be balanced.
Discuss the potential future scenarios for the expansion of the soy-meat complex in MATOPIBA, and how governance structures and policies be designed to promote sustainable land-use and food systems dynamics and pathways. To this end, different scenarios about implementation of political measures (local, national, and international) to govern soy-meat complex trade in MATOPIBA will be explored and discussed among stakeholders.

Through field research and interviews with over 30 actors including farmers, researchers, environmental groups, and public officials in Matopiba and Brasilia, we evaluated the timeliness, potential impact, and political feasibility of seven trade policy options that can make food systems in Matopiba more inclusive and sustainable.

Expand the Amazon Soy Moratorium to the Cerrado
Include “Other Wooded Land” and “Natural Grassland” in the European Union Deforestation-free Regulation (EUDR)
Substantially increase private sustainability certification, e.g., Round Table on Responsible Soy.
Require strong socio and environmental measures to implement the MS-EU trade agreement.
Eradicate all ilegal deforestation
Develop multi-actor territorial agreements.
Apply similar standards by China as those currently being formulated by the EU Regulation of imported deforestation.

These measures can be integrated interventions in support of the implementation of the Action Plan for Prevention and Control of Deforestation and Fires in the Cerrado Biome – PPCerrado, updated by the Braziliand government in 2023.

The case study allowed us to derive policy recommendations based on a comprehensive and systemic analysis of the soy-meat complex situation in the Cerrado, Brazil.

Eradicate illegal deforestation is currently the most convenient and politically viable measures. However, note that its potential impact is limited in Matopiba both due to the predominance of private land ownership and the loopholes in legislation that allow for the “legalization” of deforestation.
Understand the interest and direction of China’s policies in future soy and meat imports, as crucial for governing the trajectory of food systems. Measures linked to environmental and social performance would have a significant impact on the region.
Support strategies focused on establishing a national public system for socio-environmental traceability. After many years of investment and engagement in private certification mechanisms, the results in systemic impact are marginal and limited. Additionally, there is no political viability foreseen for the establishment of a Soy Moratorium for the Cerrado.
Include other wooded lands and natural grasslands in the future revision of the EU regulation on deforestation-free products (EUDR) for the effective protection of Cerrado. In addition to being a measure with high potential impact and timeliness, the distinction between “forest” and “savannah” makes no ecological sense.
Adopt gradual land integrated trade-related measures that align with the implementation axes of the PPCerrado, particularly the dimensions of economic instruments and land regularization.