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Soy Macauba Sustainability _ LocalPork Symposium
- 1. Sustainability of soybean and macaúba production chains in Brazil LocalPork Symposium, Wageningen, NL. 20.12.2018 Prof. Aziz Galvão da Silva Júnior Rural Economics Department Federal University of Viçosa
- 2. Introduction Environm. Soybean Macaúba ConclusionsContent • Introduction • Definitions • Brazilian agribusiness • Pig production chain • Environmental Sustainability • Brazilian Forest Code • Soybean chain • Macaúba “chain” • Conclusion
- 3. Introduction Environm. Soybean Macaúba ConclusionsDefinitions ... • Sustainability • SAFA-FAO (Sustainability Assessment of Food and Agriculture Systems) • good governance, • environmental integrity, • economic resilience and • social well-being • Competitiveness • Countries Global Comp. Index 4.0 (World Economic Forum) • Enabling environment • Human capital • Markets • Innovation ecosystem
- 4. Introduction Environm. Soybean Macaúba Conclusions... Definitions • Coordination of production chains => f(transaction costs) • spot markets ↔ strategic alliances ↔ contractual partnerships ↔ vertical integration • Chain competitiveness criteria • Relative market share • Chain´s products vs. substitutes • Profitability of chains´ actors • Food security • Technical and operational efficiency • Equity considerations • Consumer satisfaction • Chain performance drivers • The enabling environment • Technology • Market structure • Coordination • Firm management • Inputs
- 5. Introduction Environm. Soybean Macaúba ConclusionsBrazil (Global Competitiveness Performance 2018) vs. ◊ The Netherland Instruction infraestructure ICT MacroEc Stability Health Skills Product M. Labour M. Finance Sys. Mkt Size Buss. Dynamism Innovation Source: World Econ. Forum, 2018)
- 6. Introduction Environm. Soybean Macaúba ConclusionsBraz. Agribusiness (net production value USD) Sources: FAOSTAT, 2014 Agribusiness • GNP: 23% • Export: 48% • Employment: 20% 6
- 7. Introduction Environm. Soybean Macaúba ConclusionsBraz. Agribusiness (world ranking)EXPORTATION 55% 21% 34% 17% 30% 15% 8% 3% 1o 1o 1o 2o 2o 3o 3o 4o 77% 45% 28% 20% 39% 35% 18% 8% 1o 1o 1o 2o 2o 1o 3o 4o Orange Juice Sugar Coffee Cattle Meat Soy Chicken Meat Maize Pig Meat PRODUCTION Cellulose 14,2 MM ton/year 10,6 MM ton/year 1o 1o Source: ABAG. 2016
- 8. Introduction Environm. Soybean Macaúba ConclusionsPig Production Chain • Production sector • Sows: 1,7M • Pigs (for slaughter): 39.3M • Production farms 3.1K • Direct/Indirect Jobs: 126K / 923K • Economic importance • Pork chain: 44.9B USD • Input Industry: 4.2B USD (9.4%) • Pig farming: 4.8B USD (10.8%) • Processing/Distr. 35.3B USD (78.6%) Source: SEBRAE. 2016
- 9. Introduction Environm. Soybean Macaúba ConclusionsInput Industry (M USD) Source: SEBRAE. 2016
- 10. Introduction Environm. Soybean Macaúba ConclusionsLand Use and Preserved Area (by biome) Source: ABIOVE. 2018
- 11. Introduction Environm. Soybean Macaúba ConclusionsBrazilian Forest Code • Braz. (new) forest code: law 12.651/2012 • Concepts • APP: area of permanent preservation • LR: legal reserve • Components • CAR: Rural environment registry • SICAR: Rural enviroment registry system • PRA: Environmental complience program • CRA: environmental rural credit Source: SFB, 2018
- 12. Introduction Environm. Soybean Macaúba ConclusionsPermanent Preservation Area (APP) Source: SFB, 2018Source: SFB, 2018
- 13. Introduction Environm. Soybean Macaúba ConclusionsLegal Reserve (RL) Source: SFB, 2018Source: SFB, 2018
- 19. Introduction Environm. Soybean Macaúba Conclusions PPA (to be restored) PPA (preserved) Source: SFB, 2018
- 21. Introduction Environm. Soybean Macaúba ConclusionsEnvironmental Compliance Program (PRA) Source: SFB, 2018
- 22. Introduction Environm. Soybean Macaúba ConclusionsEnvironmental Compliance Program (PRA) Source: SFB, 2018
- 23. Introduction Environm. Soybean Macaúba ConclusionsCAR x Credit and Insurance Operations • After CAR registration deadline, no financial institution shall grant rural credit, in any term, to rural property owners whose lands are not registered • CAR deadline 31/12/2018! • Integration CAR x SICOR • System of Rural Credit Operations • Brazilian Central Bank Source: SFB, 2018
- 24. Introduction Environm. Soybean Macaúba ConclusionsEnvironmental Reserve Certificate (CRA) • A certificate that representes an area of existing native vegetation (an/or vegetation under restoration) established in areas of • Legal Reserve (RL) surplus • Legal Reserve (RL) of small properties • Environment easement Source, IPAM (2015)
- 25. Introduction Environm. Soybean Macaúba ConclusionsPublic Access to Data and Information Source: CAR, 2018 www.car.gov.br By 24/10/18 >90% prop. registered
- 26. Introduction Environm. Soybean Macaúba ConclusionsForest Area in Rural Properties (08/18) Source: SFB, 2018
- 27. Introduction Environm. Soybean Macaúba ConclusionsSoybean Global Trade Flow Sources: WWF, 2016; ABIOVE, 2018 Brazilian Export Evolution bean meal
- 28. Introduction Environm. Soybean Macaúba ConclusionsSoybean Production (2018/2019) • Area: 35.8 M ha • Production: 120.1 M ha • Productivity: 3,354 kg/ha • Farms (States) : 235K (16) • Export (% Br.) 32B USD (15%)
- 29. Introduction Environm. Soybean Macaúba ConclusionsSoybean production chain (Brazil) Million tons Production 119,5 Crushing 43,6 Exports 77 Meal 32,8 Oil 8,65 Exports 1,4 Domestic Use 7,6 Biodiesel 3,6 Exports 16,75 Domestic Use 15, 5 2018 China: 80% UE: 7% Asia (other): 5% Other: 8% UE: 50% Asia: 43% Middle East: 5% Other: 3% Source: ABIOVE, 2018
- 30. Introduction Environm. Soybean Macaúba ConclusionsBiodiesel Program • Biofuels programs • Proálcool: Ethanol since 1975 • Biodiesel: re-launched 2004 (mandatory mix) soybean oil; 69% cattle fat; 13% cotton oil; 2% others; 16% capacity crushed Raw material % Production área Crushing ind. Biodiesel ind.
- 31. Introduction Environm. Soybean Macaúba ConclusionsSoybean sustainability programs • Amazon Moratorium – 12 years • Soja Plus – 7 years • Pará State Grain Protocol – 4 years • Used oil reversal logistics – 5 years • Package reversal logistics – 5 years • Cerrado Working Group – GTC – 1 year Source: ABIOVE, 2018 Brazilian Vegetable Oil Industries Association
- 32. Introduction Environm. Soybean Macaúba ConclusionsSoy Moratorium • Monitoring 98% of the soybeans grown in the Amazon Biome since 2006 • Commitment: Signatories will not trade soybeans produced in areas of the Amazon Biome deforested after July 2008. • In the 2017 crop soybeans have been identified on 47,365 hectares of deforestation since 2008. • These 47,365 hectares in non- conformity with the Soy Moratorium correspond to 1.2% of the bioma deforestation. Source: ABIOVE, 2018
- 33. Introduction Environm. Soybean Macaúba ConclusionsSojaPlus • Initiative • Abiove (veg. Oil industries Ass.) and • Aprosoja (Soybean and corn producers Ass. MT) • 2,085 farms in the states of Mato Grosso, Mato Grosso do Sul, Bahia, Minas Gerais, Goiás and Tocantins • 2,8 million hectares of soy checked • 8,3 million tonnes of soy • Investments of R$23 million between 2011 and 2018 • It is not a certification program • Management program • Labour and environmental laws • Check list of 180 itens Source: ABIOVE, 2018 • Topics • Quality of Life at Work • Occupacional health • Occupacionl safety • Labour relations • Best production practices • Environmental regulations • Financial and Economic • Product Quality
- 34. Introduction Environm. Soybean Macaúba ConclusionsSojaPlus (UFV) • 255 Farms • 109 MG, • 134 na BA e • 12 no MS. • In MG: an one week “visit” • Detailed technical recommendations • Academic program • 3 steps • > 200 students • 7 courses and 3 field days • 11 Workshops/seminars • Research possibilities • Sustainability/Economic analysis • Solid wastes (LCA) • ... • Youtube vídeo • Soja plus mg english
- 35. Introduction Environm. Soybean Macaúba ConclusionsMacaúba “Chain” • Macaúba and palm • plant, fruit, oil and ind. processing are similar • Palm sustainability • Economic importance • 38% volume of veg. Oil (30% soybean) • Indonesia and Malasya 87% • Environmental issue • Deforestation in Indonesia and Malasya (protection of Orangutan) • Social impact • Felda Project in Malaysia • Macaúba sustainability • “Positive” environmental impact • “Marginal” área • iLPF (integration forest and pasture) Felda Project • Since 1956 • > 100K smallholders families • 90´s launched corporate entities • FGV Holding 811K ha
- 36. Introduction Environm. Soybean Macaúba ConclusionsBiodiesel Projects • Biodiesel Program • Development of alternative sources • Castor seed, Jatropha, Macaúba • Inclusion of smallholders • UFV participation • MDA (former Br. Ministry of Rural Development) • Development of an integrated (agriculture + industry) decision system (Biosoft) • Analysis of several projects throughout Brazil (> 100) • Some macaúba projects • FAO – RLC (Regional Office for Latin America and the Caribbean) • Improvement and translation of Biosoft => Biodiesel FAO (Por. Sp. Eng.) • Capacity building (> 160 profissional from 14 latin american countries) • Some macaúba projects (Costa Rica, Colombia, Bolivia, ...
- 37. Introduction Environm. Soybean Macaúba ConclusionsBiodiesel FAO (Integrated agriculture industry DSS) Decision Tree Oil and Meal (livestock production)
- 38. Introduction Environm. Soybean Macaúba ConclusionsSoleá • Acrotech (UFV startup) • Critical technological innovation • Seed dormancy break • Seedlings production
- 39. Introduction Environm. Soybean Macaúba ConclusionsSoleá Agro • Acrotech takeover • To date: • investment around 10M USD • Macaúba plantation (João Pinheiro, MG) • Area: 831 ha + pasture + crops in degraded area
- 40. Introduction Environm. Soybean Macaúba ConclusionsSoleá (industrial facilities) 1st phase (1st semestre 2019) 2nd phase (2nd semestre 2019)
- 41. Introduction Environm. Soybean Macaúba ConclusionsChain Performance (soybean vs macaúba) SOYBEAN MACAÚBA • The enabling environment ++ (- logistic) +++ • Technology +++ + (?) • Market structure +++ - - - (???) • Coordination (spot market) +++ -- (??) (contract, (barter operation) integration ??? • Firm management +++ (??) • Inputs +++ + (?)
- 42. Introduction Environm. Soybean Macaúba ConclusionsConclusion • Agribusiness is of utmost economic importance for Braz. economy • Livestock production • ranks 1st (cattle), 4th (chicken), 5th (milk) and 7th (pig) in Brz. production net value • Pig prd. chain ranks 4th in both world production and export • The Braz. (new) forest code • Is innovative, transparent and has high requirement of preservation (20% up to 80%) • > 90% Braz. rural properties registered • Soybean chain • Ranks 1st in Braz. export and plays a key role in livestock and biodiesel sectors • Very competitive chain (2nd world producer and exporter) • Considering also players´ profitability, technical and “financial” efficiency (except logistic) • Several sustainability program supported by the industry (ABIOVE) and farmers assoc. (APROSOJA) • Soy moratorium for amazon region • Soja Plus management program (labour and environmental laws)
- 43. Introduction Environm. Soybean Macaúba ConclusionsConclusions • Macaúba “chain” • There is no Market (it is yet not a “chain”) • Biodiesel program can play an importante role (oil production) • Inclusion of smallholders in a very complex task • There are some interesting initiatives (e.g. Soleá agro) • Very interesting alternative for pig and mainly dairy production (integration forest +pasture) = Low carbon agriculture program • Interesting (economic and technical) research opportunities on feed alternatives for livestock production • Trends • Paris agreement (USA withdraw and sanctions(?), Brazil withdraw (?), protest, ....