Major ag traders fined for buying grain from illegally deforested land in Cerrado

Tuesday, July 24th, 2018

Major commodities traders Cargill and Bunge have been fined by the Brazilian authorities for buying grain from illegally deforested areas in the Cerrado.

The two firms, along with three more traders and dozens of farmers, were fined a total of $29 million by the environmental agency Ibama in May.

The fines were a phase of “Operation Soy Sauce”, that began in April, in which Ibama and federal prosecutors clamped down on illegal land use in the Matopiba region – comprising Maranhão, Tocantins, Piauí and Bahia states – in Brazil’s Cerrado savannah.

By analysing satellite data, Ibama identified clearing in areas of 40 farms that were off-limits. The list of “embargoed” areas is available on Ibama’s website, and a 2008 decree prohibits trade in commodities produced in such areas.

The five traders allegedly purchased 3,000 metric tons of soy and other products from areas illegally deforested, embargoed areas. In its statement announcing the fines, Ibama stated that the illegal deforestation had been financed by the anticipated sale of the grain.

In an email to Climate Advisers in May, Bunge said it disputed the allegations and has contested the fine with Ibama. Bloomberg reported that Cargill is still investigating the matter.

Dozens of farmers were also fined for illegal deforestation. Bloomberg reported that Brazilian federal prosecutors may pursue legal action to ensure that the traders and farmers repair environmental damage done.

In 2017, a coalition of civil society groups published the Cerrado Manifesto, calling for the private sector to take action to end deforestation in the biome. It notes that since 2013, every two months an area of savannah the size of Greater London has been destroyed.

Since February 2018, 62 of the world’s largest food companies have made a statement of support for the manifesto. The statement says that the “wide gap between tackling ‘illegal’ deforestation and achieving zero net deforestation goals is a cause for major concern.”