Everyone has heard of the Amazon – but how many can name Latin America’s second most important forest? The Gran Chaco is a vast, unique ecoregion of mainly dry forest spreading across more than a million square kilometres – twice the size of Spain. It’s also the continent’s hot new deforestation frontier. Soaring demand for soy is the main culprit. Known as the “king of beans”, soy is an important source of protein, with more than three-quarters of production destined for animal feed.
It’s also a major source of biofuels and soybean oil – the most consumed cooking oil in the world after palm oil. Global soy production has exploded since the 1960s, expanding 10 times to fuel the planet’s growing hunger for meat, especially poultry. Crop yields over the same period have not kept pace, so the area used to grow soy has more than quadrupled, in turn threatening forests and other natural ecosystems.
▲ Agriculture in Chaco Province, Argentina © Martin Katz / Greenpeace
As soy farms expand, they push cattle production northwards deeper into the Chaco
Argentina is the world’s third largest producer of soy, after the US and Brazil, and the world’s leading exporter of soy oil and meal. Soy is the country’s main cash crop, generating $21.5 billion in exports in 2021, and the industry employs over 400,000 people. Argentina is also home to nearly two-thirds of the Gran Chaco. And, although most Argentine soy is produced in the more fertile southern soils of the Pampas, the soy-farming frontier is now expanding to the north, putting direct pressure on Gran Chaco’s fragile ecosystems. As well as clearing forests to grow soy, evidence suggests that the soy industry has an even greater indirect effect on deforestation. “As soy farms expand, they push cattle production northwards deeper into the Chaco,” explains Daniel Kazimierski, Argentina Coordinator for the Tropical Forest Alliance (TFA). This in turn leads to ranchers clearing more trees to create new cattle pastures. A quarter of the Argentinian Gran Chaco – around 12 million hectares of forest – has been cleared for arable and cattle farming over the past 30 years. If current trends continue, a further 4 million hectares of forest could be lost by 2028. Yet global awareness of the plight of the Gran Chaco and its battle with deforestation is very low, eclipsed by its larger, more famous sibling – the Amazon. “The Gran Chaco is really unknown, even for many in Latin America”, says Javier Ortiz, TFA’s Regional Director for Latin America.This matters for a whole host of reasons. The Gran Chaco features as many as 50 different ecosystems, home to 3,400 species of plants, 900 species of animals and more than 4 million people – including 3,000 communities of Indigenous people, many of whom depend on the forest and its services. Victor Vera, TFA’s Paraguay Coordinator, explains the uniqueness of the ecoregion: “The Chaco is one of the two regions in the world that is in the transition zone between tropical and subtropical forest, with a rainy season and a dry season: this creates unique biodiversity that is very different from the Amazon.” Meanwhile, deforestation isn’t just bad for biodiversity. It also increases the risk of flooding, since a hectare of high-quality forest can absorb 300mm of rain an hour – 10 times more than the same area planted with soybeans. And, of course, protecting standing forests is critical for climate mitigation. This is not only because of trees’ ongoing role in sequestering CO₂, but also because of the huge volumes of carbon they lock away – 4.65 billion tonnes in the case of Gran Chaco’s forests.
Creating a sustainable regional soy industry starts by improving both transparency and traceability within the supply chains of Argentina and neighbouring Paraguay, which together account for the great majority of the Gran Chaco biome. The challenge is to trace the origin of soy products from the traders and exporters back upstream to the brokers who aggregate the product in their silos and further still to the producers to ensure their plots and farms have not been freshly carved out of the forest. Efforts to ensure more sustainable soy production have been the subject of voluntary initiatives, notably the Round Table on Responsible Soy (RTRS). However, voluntary certification so far plays a very limited role in the soy supply chain, with RTRS certifying just 606,000 tonnes of Argentina’s 46 million tonnes of soy produced in 2021. A similar initiative – the Roundtable on Sustainable Palm Oil (RSPO) – requires its members to release the names and locations of all the upstream mills that supply them with crude palm oil, to allow an assessment of deforestation risks based on a range of measures such as high conservation value and high carbon stock analysis of production areas and nearby forest. By contrast, a 2022 report by Planet Tracker found no soy traders or downstream companies that disclose the locations of soy silos from which they are sourcing in the Gran Chaco, let alone the farms supplying those silos. This may all begin to change with the advent of the European Union’s proposed regulation on deforestation-free products, which will ban the sale in the EU of seven forest-risk commodities, including soy, for which companies cannot provide information proving they are “deforestation and conversion free” (DCF). This means companies will need to report on the precise locations of farms they source from and prove that land was not subject to deforestation or forest degradation after a cut-off date, probably 31 December 2020. Companies will also have to show their suppliers conform with laws on human rights, including for Indigenous peoples, as they apply in the country of production. The EU’s new regulation will prove a big deal for the region’s farmers, since the EU imported 24% of all the soy produced in the Gran Chaco in 2018 – as well as even greater amounts from the Cerrado and the Amazon.
▲ Soy crop at humid pampa, Córdoba, Argentina. © Edsel Querini
Perspectives interviewed Juan Carlos Cotella, an Argentinian farmer with 25 years’ experience, for his views on sustainability. He grows a lot of soy on his 60,000 hectare estate in the Gran Chaco and he is confident he can prove the sustainability of his product to clear the bar of any future EU mandate. But that doesn’t mean he’s happy with it. “This proposal from Europe is only based on their own necessities and realities and it’s difficult to adapt to these standards in the reality of northern Argentina and the availability of resources,” says Cotella. He adds that agriculture in this part of Argentina is not just about soy, but also corn, beans, sunflowers, wood and honey. “The EU regulations should be more flexible”, he says – “they should differentiate between producers who carry out environmentally friendly activities and those that don’t.” Farmers need support in enhancing the productivity of their soils and croplands, especially as the region is not as fertile as the Pampas to the south and annual rainfall is about half that’s needed for arable crops to flourish. “Productivity in the Chaco is very low”, says TFA’s Ortiz – “there’s very little investment and water management is precarious.” Cotella points out that his region is one of the poorest in Argentina and farming is “not just an economic activity but also an engine to support a whole community.” To make agriculture truly sustainable for the small farming communities of northern Argentina, says Cotella, “EU organizations should help provide infrastructure and support, such as better roads and water systems.” Argentinians are also helping themselves. The producer association Aapresid – the Argentine Association of No Till Producers of which Cotella is a deputy director – has pioneered regenerative agriculture techniques such as zero tillage and direct seeding for three decades. Aapresid created Argentina’s first standard for soy bean production that was internationally recognized – the Certified Sustainable Agriculture standard (ASC in Spanish).
Plantation of soy beans in Argentina. © Nick Albi ►
In Formosa province in the heart of the Gran Chaco, for example, 70% of the land can be legally deforested. This is not enough to protect the forests.
▲ Dried soybeans © Picture Partners
However, not all actors in the supply chain are on the same page when it comes to sustainability. Cotella is confident that farmers themselves will become progressively more compliant. But producers cannot make the changes alone – others must contribute. “I don’t think there’s pressure from the buyers and traders – they’re not that interested in sustainability”, he says. Research into the commitments of regional soy traders appears to support Cotella’s point. At COP26 in November 2021, for example, the CEOs of 14 major agricultural commodity companies with a combined annual revenue of $500 billion signed a corporate statement of purpose to accelerate progress towards eliminating commodity-driven deforestation in their supply chains. The signatories include some of the largest soy traders operating in the Gran Chaco, such as ADM, Bunge, Cargill, Louis Dreyfus and Viterra. Within a year of this announcement, all five companies had committed publicly to eliminate deforestation from their soy supply chains by 2025. What’s striking is that each of these five companies is headquartered outside Latin America, in either the US or Europe, while none of the major soy traders headquartered in Argentina or Paraguay are signatories to the COP26 declaration. However, they are signatories to the Argentinian national soy sustainability platform, ViSeC (see box) that aims to shift farmer practices to a more sustainable model. Another challenge in Argentina is that each province has the power to decide its own land management and categorization. “Some provinces are keener to protect the forest than others”, says TFA’s Kazimierski. “In Formosa province in the heart of the Gran Chaco, for example, 70% of the land can be legally deforested”, he adds – “this is not enough to protect the forests.” An issue certainly not limited to the Chaco region is the need to create a value for standing forests – if farmers are to be incentivized to change their practices and avoid further forest conversion. ‘Payments for ecosystem services’, if done well, have the potential of becoming important policy tools to conserve ecosystem services and reduce deforestation.
The Gran Chaco is Argentina’s largest ecoregion, covering a quarter of the country’s territory and providing a home for 60% of the nation’s native vegetation and habitats. Meanwhile, soy is the country’s top cash crop and more than 80% of production is exported to international markets. However, the expansion of soy plantations has turned the Gran Chaco into a global deforestation hotspot. Since 2019, the Chamber of the Oil Industry of the Argentine Republic (CIARA) – in partnership with The Nature Conservancy, Peterson Control Union (experts in agricultural supply chain certification) and (more recently) The Tropical Forest Alliance – has maintained a unified monitoring platform for the soy supply chain in Argentina, known as the Visión Sectorial del Gran Chaco Argentino (ViSeC). Its aim is to reduce forest loss in the Gran Chaco and build capacity for the verification of sustainable soy in response to new regulations proposed by the European Union that will ban the import of commodities associated with deforestation or forest degradation. ViSeC is a national platform that brings together all members of the soy value chain – including producer associations, brokers, processors and exporters. It will gather monitoring and verification information for all the soy traded in Argentina, against agreed sustainability parameters, with a focus on deforestation, to generate transparent, reliable data that is publicly accessible. A key aspect of ViSeC’s monitoring, reporting and verification (MRV) process is the generation of transit documents that feature geopositioned data on the plots, farms and silos through which soy passes on its way to being traded and exported. The platform also aims to provide solutions and technical assistance for farmers to shift their practices to a more sustainable model.
▲ ViSeC© landinnovation.fund
