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Special Report: Appetite for destruction - Soy boom devours Brazil's tropical savanna

[August 28, 2018] By Jake Spring

CAMPOS LINDOS, Brazil (Reuters) - When farmer Julimar Pansera purchased land in Brazil's interior seven years ago, it was blanketed in tiers of fruit trees, twisted shrubs and the occasional palm standing tall in a thicket of undergrowth.

He mowed down most of that vegetation, set it ablaze and started planting soybeans. Over the past decade, he and others in the region have deforested an area larger than South Korea.

Permissive land-use policies and cheap farm acreage here have helped catapult Brazil into an agricultural superpower, the world's largest exporter of soy, beef and chicken and a major producer of pork and corn. This area has also lured farmers and ranchers away from the Amazon jungle, whose decline has spurred a global outcry to protect it.

The tradeoff, environmentalists say, is that while Brazil has slowed destruction of the renowned rainforest from its worst levels, it has put another vital ecological zone at risk: a vast tropical savanna that is home to 5 percent of species on the planet.

Known as the Cerrado, this habitat lost more than 105,000 square kilometers (40,541 square miles) of native cover since 2008, according to government figures. That's 50 percent more than the deforestation seen during the same period in the Amazon, a biome more than three times larger. Accounting for relative size, the Cerrado is disappearing nearly four times faster than the rainforest.

The largest savanna in South America, the Cerrado is a vital storehouse for carbon dioxide, the greenhouse gas whose rising emissions from fossil fuels and deforestation are warming the world's atmosphere. Brazilian officials have cited protection of native vegetation as critical to meeting its obligations under the Paris Agreement on climate change. But scientists warn the biome has reached a tipping point that could hamper Brazil's efforts and worsen global warming.

By focusing on one problem, Brazil essentially created another, said Ane Alencar, science director of the non-profit Amazon Environmental Research Institute, known as IPAM.

"There's a high risk for the climate associated with this expansion," Alencar said. "Limiting and calling attention to deforestation in the Amazon, in a way it forced the agribusiness industry to expand in the Cerrado."

The toll can already be seen in the region's water resources. Streams and springs are filling with silt and drying up as vegetation around them vanishes. That in turn is weakening the headwaters of vital rivers flowing to the rest of the country, scientists say. The imperiled waterways include the Sao Francisco, Brazil's longest river outside the Amazon, where water levels are hitting never-before-seen lows in the dry season.

"The removal of vegetation can lead a body of water to extinction," said Liliana Pena Naval, an environmental engineering professor at the Federal University of Tocantins.

Wildlife, too, is under threat, including rare hyacinth macaws, maned wolves and jaguars that call the shrinking savanna home. So are thousands of plants, fish, insects and other creatures found nowhere else on earth, many of which are only beginning to be studied.

"I compare it to the burning of the ancient Library of Alexandria," said Mercedes Bustamante, an ecologist at the University of Brasilia. "You lose the accumulated evolutionary record of thousands of years that never can be recovered."

Farmers see the Cerrado's development as critical to global food security and their nation's prosperity. Brazil's agriculture sector grew a sizzling 13 percent in 2017, while the overall economy barely budged. The nation's ability to keep producing new farmland cheaply has given it an edge over rivals and cemented its status as a vital supplier to the world's tables.

"Imagine, if not for Brazil's production, how much more hunger would there be," farmer Pansera said.

THE GREEN REVOLUTION

Roughly the size of Mexico, straddling Brazil's mid-section from its far western borders with Paraguay and stretching northeast towards the Atlantic coast, the Cerrado has seen about half of its native forests and grasslands converted to farms, pastures and urban areas over the past 50 years.

Deforestation in the region has slowed from the early 2000s, when Brazil's soy boom was gaining steam. Still, farmers continue to plow under vast stretches of the biome, propelled largely by Chinese demand for Brazilian meat and grain. The Asian nation is Brazil's No. 1 buyer of soybeans to fatten its own hogs and chickens. China is also a major purchaser of Brazilian pork, beef and poultry to satisfy the tastes of its increasingly affluent consumers.

Rising trade tensions between China and the United States have only deepened that connection. Brazil's soybean exports by value to China are up 18 percent through the first seven months of the year as Chinese buyers have canceled tens of millions of dollars' worth of contracts with U.S. suppliers.

The trend bodes well for producers in the Cerrado's frontier region known as Matopiba, shorthand for the northeastern Brazilian states of Maranhao, Tocantins, Piaui and Bahia. Land here is cheap. Virgin plots near Pansera in the state of Tocantins can be had for $248 an acre on average, according to agribusiness consultancy Informa Economics IEG FNP. That compares to an average of $3,080 per acre for already cleared farmland in the United States. Soy planting in Matopiba has more than doubled over the past decade.

Pansera, 50, is part of a wave of industrious transplants from southern Brazil who are remaking the region. His formal education stopped at middle school, but he found land enough in the Cerrado to match his big ambitions. He now presides over nearly 19 square miles (49 square kilometers) of manicured soy fields and has about 20 full-time workers on his payroll. Pansera's soybeans will bring in an estimated profit of nearly 5 million reais ($1.23 million) this year, most of which he plans to invest back into the farm.

Government policies have intentionally driven industrial-scale farming here. Short on farmland to feed its growing population, Brazil in the 1970s looked to its vast savanna, a region early explorers had dubbed "cerrado," or "closed," because of its tangled woodlands.

State agriculture scientists developed fertilizers and additives to fix the acidic, nutrient-poor earth and created soybean strains that could thrive in the tropics. Arable land exploded. Within a decade, Brazil transformed itself from a food importer to a net exporter. By the 1990s it was moving global commodities markets.

"Agriculture in the Cerrado is what took Brazil to the next level," Agriculture Minister Blairo Maggi told Reuters. Known as Brazil's "Soy King," Maggi is a billionaire whose family runs one of the largest private soybean operations in the world, much of it in the Cerrado.

Maggi said growers are respectful of legally allowed limits on deforestation. Their "rational" occupation of the Cerrado has helped Brazil's economy, he said.

Farmers have emerged as a powerful political force bent on keeping Brazil's countryside open for business. Lawmakers in the country's largely rural, pro-agriculture voting bloc, who comprise more than 40 percent of the nation's congress, have led a rollback of environmental laws in recent years.

Those efforts include a 2012 loosening of Brazil's landmark Forest Code that sets requirements for preserving native vegetation. The change reduced potential penalties for farmers, ranchers and loggers charged with past illegal deforestation, and made it easier for landowners to clear more of their holdings. Annual deforestation in the Amazon last year was up 52 percent from a record low in 2012.

Still, environmental protections there remain the most robust in Brazil. Rainforest farmers are required by law to preserve 80 percent of native vegetation on their plots. And global grain traders in 2006 voluntarily agreed to stop purchasing any soy harvested from newly deforested Amazon jungle areas. As part of its obligations under the Paris Agreement, the government pledged to eliminate illegal Amazon deforestation by 2030.

Brazil has made no similar push to preserve the Cerrado, which has long been viewed as a resource to be developed.

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A worker inspects soybeans during the soy harvest near the town of Campos Lindos, Brazil February 18, 2018. Picture taken February 18, 2018. To match Special Report BRAZIL-DEFORESTATION/ REUTERS/Ueslei Marcelino

Cerrado farmers are required to preserve as little as 20 percent of the natural cover, and up to 35 percent in areas neighboring the Amazon. Those who don't maximize use of their tracts risk having their land declared idle and subject to redistribution under a 1980 federal land-reform initiative aimed at assisting rural, low-income people, said Elvison Nunes Ramos, sustainability coordinator with the Ministry of Agriculture.

"The message being sent to the farmer is that he should not preserve, he should deforest," Nunes Ramos said of the policy.

A spokesman for Incra, the government agency that verifies the use of the rural land, said its job is to ensure "the fulfillment of the social function of the property."

WATER, WILDLIFE UNDER THREAT

Environmentalists say the Cerrado's wooded grasslands have failed to capture the public's attention the way the Amazon's lush jungles have.

People view the Cerrado "just as bushes, twisted vegetation and shrubs," lamented Alencar, the science director at IPAM.

What many don't see, she said, is the connection between the soybean-fed meat on their plates and the steady decline of one of the world's great carbon sinks, a bulwark against global warming.

Plants here send roots deep into the earth to survive seasonal drought and fires, creating a vast underground network that some have likened to an upside-down forest. Destruction of surface vegetation, and the resulting die-off of the life below, released 248 million tonnes of greenhouse gas into the atmosphere in 2016, according to estimates by the Climate Observatory, a Brazilian conservation group. That's roughly two-and-a-half times the annual tailpipe emissions from all cars in Brazil.

Watersheds are hurting, too.

In Palmeirante, a rural municipality in the state of Tocantins, subsistence farmer Ronivon Matias de Andrade blames expanding mega-farms for damaging a community water source. Dressed in faded shorts and flip flops, he showed a visitor the remains of what until recently had been a shady woodland: uprooted trees and freshly exposed earth pocked with heavy-equipment tracks.

Stripped of its vegetation, sandy topsoil is now filling a nearby creek and an adjoining freshwater pool where he and other rural families draw drinking water. He scooped up a murky handful in disgust.

"How many are being finished off in this manner in this state?" 43-year-old Andrade said.

Environmentalists say vanishing creeks like those in Palmeirante are threatening the nation's water supply. Seemingly insignificant sources - tiny brooks, nameless rivulets - are vital building blocks supplying water to tributary streams that in turn feed some of Brazil's largest rivers.

Of a dozen major water systems in Brazil, eight are born in the Cerrado. They include the Sao Francisco, the country's fourth-largest river, which was once famed for its paddle-wheeled riverboats known as gaiolas. Environmentalists say man-made diversions, including agriculture and hydroelectric dams, have helped alter water levels to a degree that long stretches of the river are now unnavigable during the dry season.

Loss of native ground cover is also driving microclimate change in the region, they say. Reduced vegetation leads to higher ground temperatures and lower humidity, a recipe for less rainfall. A study conducted at the University of Brasilia links deforestation to an 8.4 percent drop in precipitation from 1977 to 2010 in the Cerrado.

Cerrado wildlife is under pressure as habitat shrinks. More than 300 species that dwell here are considered threatened with extinction, according to the government. Among them are 44 rare types of "annual fish" unique to the Cerrado whose short lives begin with spring rains and end with the summer heat. Scientists suspect that increasing dry spells could be interrupting their delicate reproduction cycles.

Other creatures, including rheas - giant ostrich-like birds – will soon join the endangered species list if nothing is done to reverse the slide, says Ricardo Machado, a zoology professor at the University of Brasilia. He said the birds' numbers have plummeted due to loss of native ground cover critical to breeding and nesting.

Machado worries that unique Cerrado plants, insects and other creatures may vanish before scientists have an opportunity to identify them, much less study them.

"There is a universe to be discovered," Machado said. "All attention is focused on the Amazon, no one speaks for the Cerrado."

REINING IN THE SOY BOOM

That's beginning to change.

Dozens of groups, including Greenpeace, the World Wildlife Foundation and the Brazilian research group IPAM, last year began pushing for large multinationals to protect the biome. In a document known as the Cerrado Manifesto, they called for immediate action to stop deforestation in the region.

More than 60 companies, including McDonalds, Unilever and Walmart, have signed on so far. The firms have agreed to support measures that would eliminate native vegetation loss in the Cerrado from their supply chains. But in contrast to the 2006 Amazon soy moratorium, the Cerrado Manifesto did not commit signatories to halt purchases of farm products from newly deforested areas.

Walmart and Unilever said they are committed to achieving zero net deforestation in their supply chains by 2020, meaning any destruction in one region would be offset by recuperation of similar forest elsewhere. Walmart said all its beef suppliers in the Cerrado are monitored to ensure they don't contribute to deforestation there. McDonalds didn't respond to a request for comment.

Separately, Netherlands-based Louis Dreyfus Company in June became the first major commodity trader to pledge to stop buying soy from newly deforested land specifically in the Cerrado. The company gave no timetable, but said it would work to establish a "realistic target date" to end deforestation in its Cerrado supply chain.

Brazil's former Minister of Environment Jose Sarney Filho, who recently left office to run for Senate, has proposed an international effort to compensate landowners who preserve natural habitat. He raised the issue at last November's global climate summit in Germany, but the effort has yet to attract major backers.

Farmer Pansera, meanwhile, sees big things ahead for his patch of the Cerrado. Supervising the harvest on his land earlier this year, he watched a pair of combines chew through rows of soybean plants. The giant machines stripped away the beans and spit them into empty grain trucks rolling just behind to catch the bounty.

He said there is no future without growth, and the frontier region of Matopiba is just getting started. He plans to plant an additional 180 hectares of soy next year on newly cleared land.

"There is still a large area to be opened," Pansera said. "It will be one of the great centers of Brazilian agriculture."

(Reporting by Jake Spring; Editing by Marla Dickerson)

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