s

The Netherlands and Brazil trade partnership

The northeastern region of Brazil was occupied by the Dutch from the years 1630 to 1654. Having previously been colonised by the Portuguese and subjected to Spanish rule, the dutch were motivated to occupy Brazil in order to increase their geopolitical influence and profit margin through the expansion of the Dutch West India Company (Van Groesen, 2017). Following Brazil’s independence, diplomatic relations were established between Brazil and the Netherlands with the signing of the “Treaty of Friendship” in 1828 (Kingdom of the Netherlands, 2014). This treaty was the precedent for partnerships and collaborations between both countries, including in the farming and trade sector.

Major Dutch companies, including Unilever, Heineken, KLM, Phillips, ABN Amro Bank, and Rabobank are strongly tied and invested in Brazil. Most notably, the Dutch oil company, Shell is the second largest oil producer in Brazil, responsible for producing crude and natural gas (Frontini, 2023). Overall, the amount of Dutch companies in Brazil tripled between the years 1995 to 2013 (Ministério das Relações Exteriores, 2014). One of the most significant agreements between both countries would be the partnership between the Port of Pecém, in the Brazilian state of Ceará, and the Port of Rotterdam. This partnership is key for both countries as the Port of Rotterdam is the principal point of entry for all Brazilian goods into Europe. Investments in this partnership equated to nearly €75 million (Ministério das Relações Exteriores, 2014).

Both Brazil and the Netherlands are paramount in the international agriculture trade. Brazil is the top exporter of soybeans (American Soybean Association, 2022), a product Dutch livestock farmers depend upon. However, the Netherlands remains in the early stages of soybean production, with a negligible yield volume (Hiel et al., 2020). The bilateral cooperation between both countries extends product trade and includes collaboration in technological innovation, for instance in the area of water management techniques and practices (Ministério das Relações Exteriores, 2014).

National Transportation: From farms to Brazilian ports

National transportation of soybean products in Brazil at the present is considered inefficient, with consequences on both national and international trade relations (Plaza et al., 2020). The current transportation techniques in Brazil, as indicated by the Statistical Bulletin (Confederação Nacional do Transporte, 2018), occur mainly via road, with 61.1% of all soybean product transportation. This is followed by rail, at 20.7%, waterway, at 13.6%, pipeline at 4.2%, and 0.4% of air transportation. The dependence on road transportation is concerning in the occasion of logistic and operational failures (Plaza et al., 2020). Limited inland waterway infrastructure and the minimal railway systems across the country, create a circumstance where road transportation may not be the most efficient, however, at the present, it is the prevailing option (Salin, 2021).

Although limited infrastructure options hinder Brazil’s transportation strategies, the development of multiple nationwide transportation projects aims to increase efficiency in the country's infrastructure, which will contribute to agricultural export efficiency. Primarily, the North-South (EF-151) railroad will integrate four states and allow access to both the northeastern port of Itaquí-Sâo Luis, Maranhão, and the southern port of Santos. Alongside this, the West-East integration (FIOL) railroad will extend over 1,500 kilometres with potential integration with the North-South railroad. Lastly, in November of 2021, the 1,067-kilometre stretch of BR-163 connected Brazil’s largest grain producer, Sorriso, North Mato Grosso, to Miritituba (Salin, 2021). These railroads expedite the transportation process and will increase the efficiency of the Brazilian soybean transportation chain.

International transportation: Brazil to the Netherlands

Nearly 83 million metric tons of soybean were exported from Brazil in 2020 (Salin, 2020), through six main ports that account for 81% of Brazil’s total exports. The port of Santos is the largest (Salin, 2021), making it a key access point for a trade. The main soybean trading companies include Amaggi, based in Rotterdam which has a 20% market share. With 11% of the market share is the Chicago-founded company, ADM. The following companies with respective 9%, 8%, and 7% of market shares are LDC, Bunge, and Cargill (Dutch market exposure to deforestation in Brazil, 2020). Annually, the Netherlands imports approximately 3,800,000 tonnes of soybeans from Brazil (Mighty Earth, n.d.), making the Netherlands the second-largest importer of soybeans from Brazil (Salin, 2021) and the fourth-largest importer of soybeans worldwide (Mighty Earth, n.d.). For this reason, the Netherlands is a key country in the worldwide soy trade and processing business, solidifying the influence of the trade partnership it has with Brazil.

Consumption and retail of soybeans in the Netherlands

Soybeans in the Netherlands serve two main purposes: human consumption and livestock feed. Primarily, soybeans imported are received through trading companies, as previously listed, including Amaggi, ADM, and more. Pertaining to human consumption, the trading companies proceed to sell the soybean products to a supermarket, as previously mentioned in section “Processing of soy”, the processing of the soybeans occurs prior to transportation and/or prior to retail. Within the Netherlands, the four largest supermarkets are Albert Heijn, Jumbo, LIDL, and ALDI (Dutch market exposure to deforestation in Brazil, 2020). From there, the supermarkets retail the soybean products, and consumers purchase them.

The second, and prevailing purpose for soybeans in the Netherlands is for livestock feed. Soybean meal is the main ingredient in a majority of livestock feed due to its high protein content and year-round availability (Kuepper & Stravens, 2022). In 2018, approximately 2,199,200 tonnes of soybean meal was available for the Dutch livestock sector (Hiel et al., 2020). Virtual models suggest animal feed accounts for 73% of water and land use, specifically in the production of soybeans (Taherzadeh & Caro, 2019). This demonstrates the extensive dependence the livestock sector has on soybeans and the influence this product carries in agriculture. Therefore, efficient transportation of soybeans is paramount to the nutrition of societies, especially with a focus on the Dutch population.

Deforestation

Deforestation is one of the biggest environmental impacts that the agriculture of soy is leaving behind. 

Areas of native vegetation, indigenous land, and rainforests are being cleared out to grow soy crops. When we look at the world wide soy agriculture, it takes up an area the size of France, Belgium, Germany and the Netherlands combined. (Brack, Glover & Wellesley, 2016) 

Carbon emissions

In the article from Escobar et al. (2020), it is discussed how throughout the supply chain of soy, carbon emission comes in overflow. It differs throughout the chain in quantity, but is always present. During the source areas, export, the counties of import, all the different stages in between and its final usage. But most of all, the carbon footprint is highest at the stages where “soy is directly linked to natural vegetation loss” (Asher, 2019). Deforestation is one of the causes for releasing more carbon emissions. “Cleaning native vegetation releases carbon dioxide and other greenhouse gasses” (Asher, 2019), while on top of that, crop plantations store less co2 than the native vegetation did. 

Monocultures

Another impact on the environment that soy(beans) cause, is that they are mostly monofarmed. A monoculture entails that only a single crop is planted on a big piece of land, resulting in only a single vegetation (Balogh, 2021). While this might be functional for the farmers, using the same method and machines on all the land, it is not as beneficial for the land itself. Monocultures cause more soil erosion due to a less variety in vegetation and roots, and furthermore they are also more vulnerable for pest and disease outbreaks. As also mentioned in the article, rise and fall of monocultures from Balogh (2021), soil exhaustion is another cause of these monocultures. When the same crop is grown year after year, the beneficial soil and topsoil exhausts  from these beneficial nutrients.  

There are cases that show that growing multiple different crops together has a better impact on the environment. In the article they furthermore discuss how it would “improve the storage of soil carbon and reduce the amount of nitrogen in water” (Balogh, 2021).

Growing these monocultures of soy in for example the Amazon in Brazil additionally proves to have an effect on not only the flora environment surrounding them, but also the fauna. As earlier discussed this monofarming is bad for the spread of diseases and pests. A Solution to this would be the use of chemicals like “pesticides and herbicides” (Balogh, 2021), this unfortunately results in less insects and worms around the crops and land, which then leads to less food for birds and such. 

Soil erosion

One of the main causes of soil erosion is agriculture, soy included. Agriculture and its intense practices of for example plowing, the irrigation systems and all the machines constantly working with the soil, result in soil erosion and the disappearing of the topsoil layer. The top soil layer is a nutrient packaged, “organically enriched surface soil layer” (Pennock, 2019).  When this fertile soil is lost, the agriculture on a piece of land becomes less effective, and more and more pieces of land have to be offered up for crop growth to still meet supply and food demand. 

Furthermore, the cutting down of trees in for example, the amazon in Brazil, to make space for crop fields, also contributes to soil erosion. This deforestation makes the soil and its important top layer, more vulnerable to wind and water erosion. The trees, plants, and their roots are not there anymore to protect the soil from washing away, heavy rains and floods. Or movement from the wind (Pennock, 2019).

From origin to usage, much more environmental impacts. 

The article The Environmental Impacts of Soybean Expansion and Infrastructure Development in Brazil’s Amazon Basin by Del Carmen Vera-Diaz, Kaufmann and Nepstad (2009), shows that “roughly 30 percent of the costs of producing soybeans is associated with transportation” (Del Carmen Vera-Diaz, Kaufmann & Nepstad, 2009). These high costs are therefore seen as one of the most important restraints of the expansion of this soy agriculture in for example, the Amazon in brazil. When the infrastructure would be improved and transportation would be more cost effective, this soybean production and the deforestation that would come with it, would expand even more rapidly.. 

Economical development 

The expansion of Brazil's soy industry has had a notable impact on the country's economic development. As reported by Ritchie and Roser (2021), soybean production in Brazil has grown significantly over the past few decades, becoming a key driver of economic growth. In 2020, Brazil produced 121.80 million tons of soybeans, a sixfold increase from 2000. Additionally, Brazil's share of global soy production has risen from 20% in 2000 to 34% in 2020, indicating the industry's rapid growth.

As noted by Money Times (Borges, 2022), the soy industry's expansion has been accompanied by a proportional increase in its economic contribution. The industry generated $46.69 billion in revenue in 2022, representing a 20.80% increase from the previous year. In 2021, the industry's foreign sales revenue was US$38.60 billion. These findings suggest that the soy industry has become a significant contributor to the Brazilian economy, with its continued growth expected to strengthen Brazil's position in the global soy market.

Job creation/employment

The growth of Brazil's soy industry has also contributed to an increase in employment, particularly in states where production is highest. Rhoden et al. (2017) found that formal employment in the soybean production chain in Rio Grande do Sul increased significantly between 2002 and 2015, with the number of formal jobs in the sector rising from 3.8 to 10.7 thousand. The study suggests that the growth of formal employment in the soybean production chain is closely linked to the expansion of soybean cultivation in the region. This is not surprising, given that the soybean production chain requires a significant amount of manual labor at various stages of production and processing.

In Mato Grosso, the state with the highest soybean production in Brazil, soybean production has had a significant positive impact on employment in rural areas, particularly in municipalities with larger and faster-growing agricultural sectors (Richard et al., 2015). The study also indicates that soy production is associated with higher levels of socio-economic development in rural areas, including higher per capita income, better access to basic services such as water and sanitation, and higher levels of education. These findings suggest that the soy industry's expansion has not only driven economic growth in Brazil but has also contributed to positive employment rate and rural development for workers in the industry.

Forced labour/Child labour

Forced labor and child labor are still prevalent in Brazilian agricultural business despite the growth of the economy and employment in recent years. Scientific research confirms the prevalence of forced labor, particularly in commodity chains such as soybean production, as reported by Phillips (2013). Although smallholders who supply soy for local markets typically do not engage in slave labor, the larger companies that supply soy for national and international markets are more likely to utilize this practice. Unfortunately, child labor has also been identified in soy production in Brazil from 1980 to 2000, as noted in Manacorda and Rosati's (2008) research. More recent studies, such as Nicolella and Kassouf's (2017) research, have confirmed that these problems persist and further explored the detrimental effects of child labor on children's health. Thus, forced labor and child labor are significant issues in Brazil's soybean production industry.

Even though there are laws against forced and child labor in Brazil, they are not effectively enforced due to insufficient staff and limited resources. This makes it essential for both governments and companies to ensure that their supply chains do not involve any exploitation or mistreatment. One way to achieve this is by establishing strong monitoring systems that can detect possible issues and prompt appropriate action when violations are detected.

Land Conflicts

Land conflicts related to soy farming have been a long-standing concern in Brazil. Soybean planting has resulted in deforestation and the displacement of indigenous peoples and traditional communities who rely on the land for a living. The lack of clear land ownership rights is one of the main reasons for land conflicts in Brazil related to soy production, Sauer (2018). Landowners have frequently taken over public lands or obtained land through unscrupulous/violent ways, resulting in confrontations with local people and farmers. Also indigenous communities are victims of the land conflicts. The article "In Brazil's Soy Belt, Indigenous People Face Attacks Over Land Rights", by Mendes (2022), highlights the ongoing land conflicts faced by indigenous communities in Brazil's soy belt region. According to the article, the expansion of soy farming has led to increased deforestation and land grabbing in the Amazon rainforest, resulting in the displacement of indigenous people and the loss of their traditional territories. Mendes further explains that the Brazilian government's pro-agribusiness policies have enabled soy farmers to encroach on indigenous lands, often with the support of armed militias.

Land conflicts related to soy farming in Brazil continue to be a significant issue, with the lack of clear land ownership rights and government policies that favor agribusiness contributing to the displacement of indigenous communities and traditional landholders. These ongoing conflicts highlight the need for more sustainable and equitable land use practices that prioritize the rights of local communities and protect the indigenous communities

Certification - example of RTRS Responsible Soy

Certification on soy production has been a way to address several of the negative impacts the whole soy supply chain can have on the environmental and societal level. It is a process by which producers can obtain a verification from a certifier that guarantees that their soybeans have been produced in compliance with some specific standards. These standards may vary from one certifier organization to another. One of the widest known and used certifications for soy farming is the Roundtable on Responsible Soy (RTRS). The RTRS is a multiple stakeholder organization that emerged in 2006 from the cooperation of various organizations like WWF, Solidaridad and Unilever, among others, to promote responsible production, processing, and trade of soy (RTRS, 2023). Its certification includes a
variety of social and environmental requirements, such as the preservation of forests, the control of emissions, and protection of labor and human rights. Producers that want to, can get the RTRS certification if they meet the standards from the guidelines; and use the logo on their products. Solidaridad is one of the organizations playing a major role in training farmers to adopt more sustainable practices and thus obtaining certifications (Solidaridad, 2023). In that way it also works as an advantage for the producers as well as the companies, who can through the certification show their commitment towards sustainability. On the other hand, as certification is a product of multiple stakeholders and each one of them promotes their own interest, the standards for certification are influenced also by other factors than just social and environmental sustainability (Elgert, 2012). Additionally, the process of certification can be complex, costly and difficult to obtain, especially for small-scale soy farmers and there are several debates concerning how effective certification is, and how much
it actually contributes to sustainability.

Amazon Soy Moratorium (ASM)

The Amazon Soy Moratorium is the result of a Greenpeace report and campaign setting the connection between soy production and deforestation in the Amazon (WWF, 2021). It is an agreement between soy traders, environmental NGOs and the government to prevent deforestation in the Brazilian Amazon. First signed in 2006 for a period of two years, and has ever since been renewed. The agreement makes soy traders not buy or sell soy produced on land deforested after 2008, this was first until 2006, in the Amazonian forests. This indicates that only land that had been cleared prior to that time is permitted for soy cultivation, and prevents new forests from being turned into soy plantations. Furthermore, the commitment also entails the avoidance of buying or selling soy that is associated with slave labor or invasions on indigenous lands. Many people argue that the Amazon Soy Moratorium has been effective in lowering deforestation rates in the Amazon, especially in soy-producing areas. It has been estimated that it has led to an 86 percent deforestation decrease related to soy production from 2006 to 2016 (Brittlebank, 2016). On the contrary, the Guardian published an article called “loophole” in which they expressed criticism and concerns towards ASM, as the agreement only addresses deforestation linked to soy plantations and has as a result that deforestation continues to occur with the only difference that it happens through the production of other crops and livestock instead of soybeans (Wasley, 2022). Another criticism on this matter, argues that ASM was not created by any court or law, it was put together by large agricultural businesses in Brazil with support from global environmental NGOs. The moratorium was enforced, had a significant and dramatic, in some cases, impact on farmers' work, and serves as a perfect example of “successful” neoliberal environmental
governance (Brown & Koeppe, 2013).

Conclusion and possible suggestion on how to improve the situation

The soy supply chain undoubtedly causes to this day a lot of environmental and societal issues, but there are various initiatives throughout the years that aim to improve the situation, among others are the certifications and the Amazon Soy Moratorium. These initiatives are often the result of collaborations from NGOs, governments and multinationals; and even though they attempt to resolve the issues, many times they have been proven to be ineffective or not effective enough. The supply chain of soy lacks transparency (Binsztok, 2020), and aiming towards greater transparency could be a way to address furtherly the societal and ecological challenges caused by it. Transparency here means that at every given moment there is data available to track back the product in every link in the supply chain. This might consequently lead to first of all, certifications and the ASM working more effectively, as it becomes easier to control the process. And finally, if there is transparency, there will be more space for the debate about accountability of multinational corporations in the sustainability of the chain (Medina, 2021).

The challenges

For the environmental side the main problems are deforestation, soil erosion and carbon emissions. Deforestation is the primary ecological impact of soy production. It directly causes damage to the existing nature sphere as well as impacting both of the other problems: soil erosion and emissions. The soil erosion follows from the caused damage to previous vegetation. The other important cause is the presence of monocultures. Which cause more soil erosion due to a less variety in vegetation and roots. Added to that there is the problem that monocultures are also more vulnerable for pest and disease outbreaks, which may also have ecological impact outside of the monoculture. This causes both the loss of effectiveness of soil of the crop, with as result the use new land to meet demand for the crop, as well as impacting the soil of the surrounding flora and fauna. Similarly the impact on the carbon emissions is partly the caused directly by clearing of native vegetation as well as the problem that the crop plantations store less co2 than previous vegetation. The other major element impacting the emissions is the transportation. This is mainly being done by road or sea. The transport methods used for these of course being large emission polluters.

The social problems are mostly in the form of locals and small stakeholders unable to profit from or suffering under the advancements made by larger parties. Studies have found for example that soybean expansion has led to improvements infrastructure or led to job creation, but that these improvements not necessarily benefited all equally and the quality of employment remains low. Even worse are the connections made between increased soy production and forced labour or modern-day slavery and other very poor working conditions. Small farmers in turn face other problems such as losing access to agricultural sources critical to small farmers' livelihoods, pressure to sell their land at below-market rates or being forced to abandon their land entirely. Added to that is the land conflicts for small farmers as result of the soy cultivation, a problem also faced by indigenous communities. They are especially vulnerable to land conflicts because they frequently lack legal recognition and are subjected to discriminatory policies and practices.