Cablegate: Soybean Boycott in the Amazon Region:

VZCZCXRO4321
PP RUEHAO RUEHCD RUEHGA RUEHGD RUEHGR RUEHHA RUEHHO RUEHMC RUEHNG
RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHBR #1514 2091614
ZNR UUUUU ZZH
P 281614Z JUL 06
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 6150
INFO RUEHRI/AMCONSUL RIO DE JANEIRO 2533
RUEHSO/AMCONSUL SAO PAULO 7558
RUEHRG/AMCONSUL RECIFE 5169
RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RUEHRC/USDA WASHDC

UNCLAS BRASILIA 001514

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: SENV TBIO ETRD KSCA BR
SUBJECT: SOYBEAN BOYCOTT IN THE AMAZON REGION:

1. Summary: Multinational soy traders agreed to a two-year
moratorium on the purchase of soybeans from newly deforested land
starting in the 2006-07 crop season. A remarkable feature is that
even soybeans grown on land legally cleared during this period on
farms in the Amazon forest zone will not be purchased by these
traders. The agreement followed a Greenpeace report claiming that
the grain's cultivation is responsible for the deforestation of new
lands in the Amazon. U.S. distributors Cargill, Archer Daniels
Midland Co. and Bunge Ltd., as well as France's Dreyfus and
Brazilian-owned Amaggi are all taking part in the boycott. End
Summary

2. Greenpeace, together with McDonald's and leading European food
retailers, formed an alliance to persuade soybean traders to stop
deforestation in the Amazon. This alliance brought the big soy
traders to the negotiating table, since the majority of the
Brazilian soy production goes to Europe and is being used to feed
chickens, pigs and cattle for meat production.

3. Soy is the leading cash crop in Brazil and some studies suggest
that it is a principal driver of Amazon deforestation, along with
cattle ranching and illegal logging. According to Brazilian
Association of Oilseed Industries (Abiove), 4.9% of the country's
soy production takes place in the Amazon covering nearly 2.84
million acres.

4. The Brazilian Agricultural Ministry is worried about this
decision and believes that this could be a non-tariff export barrier
on the Brazilian crop. On the other hand, Greenpeace responded by
saying the moratorium will remain until there is an agreement with
the Brazilian government and key stakeholders on long-term
protection for the Amazon Rainforest. Greenpeace Director in the
Amazon, Paulo Adario, was quoted as saying that two years is too
short of a time for results to be seen and a verbal agreement with
the agribusiness sector assures the revision of the time-span in
2008.

5. Comment: While laudable in spirit, certain questions remain to
be answered. First and foremost is the capacity for the
distributors to monitor and enforce the ban, as no mechanism exists
to prohibit co-mingling of crops or track deforestation on a
farm-by-farm basis. Moreover, despite Greenpeace's claims that soy
is definitively linked to deforestation, many purport that the
evidence is unsubstantiated. Until this question is answered, the
efficacy of the program remains uncertain. End Comment

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