Brazilian Agribusiness Eyes Palm Oil: Is the Amazon in Further Danger?

According to a recent report on the Guardian, powerful agriculture interests in Brazil are eyeing the global palm oil industry. Currently, Indonesia and Malaysia combined dominate the sector, with a foothold on as much as 85 percent share of worldwise market share. Nevertheless, Brazil certainly has the land, labor and capacity to make inroads on this lucrative – but to critics, destructive – industry. And forces such as Embrapa, the Brazilian government’s agricultural research agency, believe that Brazil’s farming sector can scale production and export palm oil along with other commodities such as coffee, sugar, soy and beef.

At first, Brazil’s ambition comes across as jarring, considering the country’s recent deforestation trends and human rights record. After a generation of progress on fighting poverty, halting the pace of forest clear-cutting and improving labor conditions, many analysts say political turmoil in Brazil has resulted in a reversal in those improvements. After last year’s impeachment of President Dilma Rousseff over corruption allegations, her successor, Michel Temer – himself embroiled in an ethics scandal – has nullified forest protections across regions including the Amazon.

As reporters Tom Levitt and Heriberto Araujo point out, Brazil’s foray into the palm oil industry dates back to 2010. Brazil’s former president Luiz Inácio Lula da Silva viewed palm oil as a way to boost both exports and farmers’ income. For now, most palm oil production in the country is relegated to the north-central state of Pará, where the Amazonian climate is ideal for this crop’s cultivation. But Embrapa eyes additional lands for palm oil, including the state of Amazonas, west of Para, and much of the country’s savannah-like cerrado.

The specter of Brazil ramping up palm oil production raises the hackles of some environmental organizations, which fear that Brazil’s current political chaos could open the door to more virgin forests being converted to monoculture palm oil plantations. But Abrapalma, Brazil’s leading palm oil trade association, says that the cultivation, production and export of palm oil could increase without having a destructive effect on Brazil’s ecosystems.

A representative of Brazil's palm oil industry, who requested to not be identified, defended the sector's business practices in an email exchange with TriplePundit. "It appears that the Guardian piece might have given a simplified version of what's happening on the ground there," said the spokesperson.

And some non-profits agree with that outlook, although in general they are guarded when they discuss Brazil’s potential to become a global palm oil leader. “The Brazilian palm oil industry has thus far shown the capacity to develop without deforestation, and in a way that enhances carbon management and biodiversity,” said a spokesperson with the NGO Mighty Earth during an email exchange with 3p.

Mighty has been quick to denounce the global palm oil industry’s ties to environmental degradation, but the group shares a more nuanced view of future palm oil production in Brazil. The organization says Agropalma has developed a solid track record for its reputable conservation measures. In addition, the trade group has also promoted palm oil as a path for family-run farms to build wealth. And as is the case with some beef production, there is plenty of land that could be devoted to this crop without further deforestation. “Brazil has more than enough previously deforested land to support the sustainable development of palm oil, without the need to put more pressure on forests,” explained Mighty’s spokesperson.

Furthermore, Mighty believes that if both industry and government conservation measures in Brazil endure – and recent developments in Brazil make that a big “if” -  any growth of the palm oil industry in Brazil could reduce pressure on forests in frontier areas worldwide, including Peru, Colombia, Africa and Indonesia – regions where various NGOs say the sector has been unsuccessful in scaling up production without deforestation.

The palm oil industry should take notes from the history of soy production in Brazil.

Earlier this century, when soy production consumed Amazonian forests at a ravenous pace, Brazil’s private sector and NGOs worked together to put a dramatic halt to the destruction, resulting in what Mighty describes as one of the greatest climate action success stories of the past decade. According to Greenpeace, the resulting Soy Moratorium showed that stopping deforestation could be good for both the environment and business. In the event palm oil production actually increases in Brazil, the lessons learned from Brazil’s soy industry could be instructive.

Greenpeace and Mighty have noted that collaboration to halt deforestation linked to farming across the Amazon collapsed to almost zero, while Brazil’s soy production nearly doubled, proving that profitability and environmental protection are not mutually exclusive. From Mighty’s point of view, the Soy Moratorium provides a template that the palm oil sector could easily replicate. “Several of the main agribusiness traders that agreed to a moratorium on deforestation for soy in the Amazon - Cargill, Bunge, Archer Daniels Midland, Louis Dreyfus—all have commitments, which are global in scope, to ‘No Deforestation’ for palm oil as well,” said Mighty’s spokesperson.

As the Soy Moratorium offers a reliable and proven model for success, Mighty believes these companies could easily expand this framework to include palm oil and other commodities. Such protections could also ensure protections are drawn up to include the cerrado, Bolivia’s Amazon, and additional threatened forests and native ecosystems throughout Latin America.

But as the Guardian and other news sources infer, Brazil’s legal system needs to function to ensure that all stakeholders benefit and receive protection. Activists insist land grabbing in Brazil is becoming worse, not better. And last year, the number of killings reportedly tied to land conflicts in Brazil reached its highest number since 2003. Brazil’s companies have shown that they are willing to abide by commitments that bolster environmental protections and human rights; the problem has often been dodgy tactics within these businesses’ supply chains. Considering the current political volatility and polarization in Brazil, a clear path for sustainable palm oil production in Brazil probably will not give way until after next year’s presidential election.

Image credit: CIFOR/Flickr