Banco do Brasil will only finance soy outside Amazon biome
02/12/2010 11:50 - Portal Brasil
The bank has signed up to the Soy Moratorium, which seeks balance environmental conservation with economic development
The largest Brazilian state-owned bank and the main financier of agribusiness in Brazil, Banco do Brasil has announced that it has joined the Soy Moratorium, an agreement drawn up four years ago to prevent the production and marketing of the grain in deforested areas of the Amazon biome. Soy farmers applying for credit will now have to certify the origin of the soy.
The moratorium, proposed by non-governmental environmentalist organizations and agreed in 2006 with the Brazilian government and production sector, involves the two major representative bodies of soy processors and exporters in Brazil: the Brazilian Association of Vegetable Oil Industries (ABIOVE) and the National Association of Cereal Exporters (ANEC). Together, they account for 92% of the domestic market, which means trade of some 70 million tons a year.
In addition to ending funding for soy production in deforested areas, Banco do Brasil will also require properties to be environmentally certified before providing credit for the recovery of Legal Reserve and Permanent Preservation Areas. According to Alvaro Schwerz Tosetto, executive agribusiness manager at Banco do Brasil, the bank will consider the items required in the soy moratorium when analyzing credit applications. "Field verification and the credibility of data within the scope of the moratorium assure us that the bank will make decisions based on reliable technical criteria," says Tosetto.
"Without cash in hand, farmers lose the main reason for planting in areas that have recently been cleared," said Paulo Adario, a coordinator at NGO Greenpeace in Brazil. He said the moratorium seeks to reconcile environmental conservation with economic development in the region through the responsible and sustainable use of Brazil's natural resources.
The industry works closely with representatives of civil society (mainly environmental and social NGOs) to develop and implement a governance structure with rules on how to operate in the Amazon Biome and to call on the Brazilian government to set out, implement and enforce public policies on land use in this region.
The soy moratorium stipulates regular monitoring in production areas. According ABIOVE, the field investigation done in 2010 revealed that only 7% of soybeans produced in Brazil came from the Amazon. Most of the crops, says the organization, are in regions outside the Amazon biome. For ABIOVE representative Carlo Lovatelli, there have been no hikes in soy prices because of the moratorium; rather, the industry is catering to the demanding international market, mainly in Europe.