December 13, 2018 / 9:37 PM / a year ago

Brazil soy farmers should be paid to preserve forest -industry group

SAO PAULO/BRASILIA, Dec 13 (Reuters) - Abiove, a Brazil-based association of oilseeds traders, is proposing the creation of a fund to reward farmers who can preserve native vegetation on their soy farms in the Cerrado region, Brazil’s tropical savanna.

The initiative is Brazil’s response to European soy buyers, who have been increasingly vocal against deforestation, Bernardo Pires, sustainability manager at Abiove, said at a press briefing on Thursday.

The Cerrado occupies nearly a quarter of Brazil’s territory with roughly half of its native vegetation already having been destroyed, as the region was transformed into Brazil’s agricultural heartland. Protecting the remaining vegetation, which absorbs huge amounts of carbon dioxide, is seen as important in reducing global warming.

Cerrado farmers are subject to much less stringent deforestation limits than those in the Amazon rainforest, being required to preserve between 20 percent and 35 percent of the natural cover, depending on the area.

The proposal would pay eligible Cerrado farmers an average of $150 per hectare per year for preserving areas that could otherwise be legally deforested, Pires said.

“The plan is giving farmers a financial incentive for preserving native areas on farm,” Pires said. He said the farmer could choose to “either legally expand the area or be compensated by the fund.”

Abiove’s proposal is being discussed in the Cerrado Working Group, bringing together soy producers, traders and major consumer brands to discuss how to conserve the region, said Leandro Baumgarten, lead scientist for The Nature Conservancy, one of the NGOs involved.

The fund would be paid for by the soy supply chain, including major foreign consumer brands and trading companies in Brazil, Baumgarten said.

The companies are among the more than 100 that have signed on to a statement of support for the Cerrado Manifesto, a document calling for immediate action to stop deforestation in the region, according to Baumgarten and Pires, which includes firms such as Unilever, Marks & Spencer and Tesco.

“The compensation mechanism is something we are following to see how feasible it is, it’s going to be very complicated and costly to implement. But if that secures the commitment (not to deforest), that’s OK,” Baumgarten said.

A University of Wisconsin study found that nearly 1 million hectares on soy farms could still be legally deforested in the Cerrado, with only 17 percent of soy farms having more than 10 hectares eligible for opening and 4 percent having more than 100 hectares.

Reporting by Ana Mano and Jake Spring; editing by Grant McCool

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