Leakage and soy supply-chain deforestation efforts in Brazil
Efforts to reduce deforestation in Brazil have expanded as companies sourcing soybeans and other crops have implemented sustainable farming practice requirements along their supply chains. Dr. Nelson Villoria, associate professor of agricultural economics at Kansas State University, along with colleagues, Rachael Garrett (ETH Zurich & Cambridge), Kim Carlson (New York University), and Florian Gollnow (ETH Zurich), recently released authored an article published in Nature Communications addressing whether these efforts create leakage that offsets the overall benefits of deforestation.
“Zero-deforestation supply chain policies can reduce deforestation in regions with rapid commodity expansion and weak forest governance. Yet ‘leakage’—when deforestation is pushed to other regions—may dilute the global effectiveness of regionally successful policies,” Villoria said. “In our article we show that domestic leakage offsets 43-50% of the avoided deforestation by existing and proposed zero-deforestation supply chain policies in Brazil’s soy sector.”
Eliminating deforestation in supply chains starts by ensuring that no forested lands are converted to the commodity in question. Whether such land use restrictions adequately address global forest loss depends on the scale and location of their adoption, as well as the degree to which deforestation reductions are offset by the displacement or “leakage” of forest loss in other regions. Therefore, leakage is potentially a substantial barrier to the effectiveness of zero-deforestation supply chain policies because land conversion restrictions apply only to a fraction of total production.
“We found that international leakage is insignificant because soybean production is being displaced to existing U.S. farmland rather than other locations in other countries. There are also opportunities to increase supply-chain policies in Brazil’s soybeans which would decrease domestic leakage, without much international implications,” he said.
Eliminating deforestation from the supply chains of all firms exporting Brazilian soy to the European Union or China from 2011-2016 could have reduced net global deforestation by 2% and Brazilian deforestation by 9%. If major tropical commodity importers like the EU require traders to eliminate deforestation from their supply chains, it could help bend the curve on global forest loss. Legislation supporting deforestation-free supply chains are currently being considered by importing governments including the EU, the United States, and the United Kingdom.
The full article can be found at https://www.nature.com/articles/s41467-022-33213-z
