July 21, 2006

 

Resistance to soy development in Brazil endangers Cargill's operations

 

 

When US grain giant Cargill opened a US$20-million port in Santarem in Brazil three years ago to cash in on the country's soy development, it probably did not bargain on the woes it is facing currently. 

 

Now, the agri-giant is hounded by everyone from residents, environmentalists and federal prosecutors, who say the port is illegal and are suing to shut it down.

 

Environmentalists have created a gathering storm against the Brazilians who, like Cargill, see soy as the product that can raise the area out of poverty.

 

In May, Greenpeace activists were arrested after shutting the port down for 3 hours.

 

Greenpeace say they are not targeting Cargill per se but soy development in the Amazon. Soy farming has overtaken cattle ranching and logging as the worst destroyer of the rainforest. Two-thirds of rainforest the Amazon lost between 2003 and 2004 were replaced with soy plantings.

 

Brazil, the world's No. 2 soy producer, exported US$10 billion worth of soy and soy products last year, which is more than its exports of coffee and sugar combined.

 

Cargill's troubles began when its attempt to build a road leading from the heartland state of Mato Grosso to Santarem, was foiled by fierce local opposition.

 

Prosecutors now say Cargill failed to comply with federal regulations by not conducting an environmental impact assessment for the port and by building it on top of a sensitive archeological site.

 

In February, Brazilian court gave Cargill six months to carry out an environmental survey. The company and Para state, where Santarem is located, are appealing.

 

Federal prosecutor Felicia Pontes is confident the port would be shut down.

 

Pontes said public opinion, which once thought Cargill would bring in the cash and jobs the region desperately needs, is now turning against it now that neither has materialized. Instead, they are incensed that the company is getting rich off the jungle but the people remained poor.

 

Pontes adds the port's presence also accelerated deforestation in the area around it as farmers cut down jungle to grow soy to be shipped out.

 

Greenpeace says much of that deforestation is illegal, because soybean farmers routinely ignore environmental regulations requiring landowners in the Amazon to leave 80 percent of their forested areas standing.

 

Local soy growers have been involved in clashes with Greenpeace as they seek to continue their operations.

 

Cargill is also trying to make conciliatory moves. For the next harvest, the company may require soy farmers to present certificates that their soybeans were grown in accordance with Brazilian environmental laws before buying their soy.

 

If Cargill fails in the Amazon, it would not be the first entity to do so- previous US efforts, dating back to the 18th century, to establish farms, rubber plantations, gold mining operations and lumberyards have all floundered.