Internationally traded agricultural commodities – such as soy, beef and oil palm – are a multi-billion-dollar segment of the global economy and play a key role in driving development across the tropics. But production of these commodities is often linked to heavy social and environmental impacts. This is the case for most of the Latin American countries that share the stewardship of the Amazon basin.
These impacts bring operational, reputational and legal risks to companies and can potentially undermine the long-term development plans of countries whose economic health depends upon a healthy agricultural sector. A well-known example is the 2009 Cattle Agreement where the four largest meatpackers (JBS, Marfrig, Minerva and Bertín) agreed to only buy from ranches where no new deforestation had occurred since the date of the agreement. This move was precipitated, in part, by Greenpeace’s high-profile ‘Slaughtering the Amazon’ report that highlighted the role of the cattle sector in driving 80% of deforestation in the region and its links to slave labour, and had a catalysing effect in highlighting the risks that many companies were exposed to. Similar examples can be found in how concern over the risks posed by unsustainable soy, palm oil, and other major commodities has led to calls for a step-change in how these systems are governed.
Such impacts pose a crucial question for the Amazonia Security Agenda initiative: how can we transition to a more sustainable economy, in which a healthy Amazonia underpins long-term economic resilience and prosperity?
Making agriculture part of the solution for a sustainable and vibrant economy – an economy that supports economic development but also safeguards fragile ecosystems and invests in the livelihoods of local people – is a monumental challenge. At the heart of this challenge is the uneven – and usually inequitable - distribution of costs and benefits. The negative impacts of agricultural practices rarely fall on the actors who benefit the most from a given supply chain, and neither does the financial burden of moving to more responsible practices. Instead they tend to fall on those actors most in the public eye – especially the growers.
Strength in unity
Growers, local governments, traders, buyers and investors share a common interest in the long-term sustainability of agricultural production. If they acted in concert, their combined political support, technical capabilities and financial muscle could be a powerful force for change – whether for huge, established industries such as the case of Brazilian soy, or emerging agricultural sectors like oil palm in the Peruvian Amazon.
For one thing, coalitions of actors who benefit from the same production landscape can help share the costs and responsibilities of more sustainable practices more evenly. Working together in this way can lower the burden for everyone and ensure that supply chains are better protected against the risks brought about by damaging social and environmental impacts.
A more unified approach could also guard against the risk that some supply chain actors shirk their responsibilities, or simply shift environmentally damaging practices elsewhere, as has happened through the displacement of soy expansion from the Brazilian Amazon to the rich savannah lands of the cerrado [Brazil's tropical savanna eco-region]. More integrated efforts can help ensure that the efforts of front-runners – whether international companies or territorial governments – to invest in a more sustainable future are rewarded, rather than being punished through ceding a competitive advantage to their less scrupulous competitors.
Transforming supply chains through transparency
So why are such coalitions so rare? Tropical countries that produce and export major agricultural commodities are awash with sustainability initiatives.
To date, however, efforts have been largely piecemeal and highly fragmented. They fall far short of the kind of unified, systematic approaches that are needed to deliver lasting change at scale. Turning this situation around and building coalitions of actors who can work together to drive change is not a trivial undertaking. It requires the right blend of incentives, vision and trust. But above all it requires that the actors that make up complex commodity supply chains know which other actors they are connected to, and which regions of production they depend upon the most.
Without this basic information companies and governments alike are left confused by the often bewildering complexity and opacity of the international trade system. Or worse, this same opacity can serve as a convenient excuse for inaction.
We currently lack a birds-eye view of how any major agricultural supply chain in the Amazon region functions, whether for Brazilian soy, Colombian beef or Peruvian palm oil. Instead our understanding is limited to a potpourri of company-specific or initiative-specific traceability systems that can describe a particular value chain in great detail but are impossible to scale up to give a picture of the system as a whole.
Yet with innovations in supply chain modelling coupled with a rapid increase in readily available datasets on production, trade, deforestation and other impacts, a level of supply chain transparency that has the potential to be truly transformative is coming ever more within our reach.
Linking actors to places to impacts in a more systematic way that encompasses key agricultural commodity value chains that span an entire country is a critical factor in exposing the risks that threaten the long-term viability of these systems, and the natural environments on which they depend. Yet these risks cannot be overcome by the isolated actions of those companies and governments that are the most committed, but instead by harnessing the power of supply chain transparency data. This will allow identification of how different actors are bound to the fate of the same landscapes across the Amazon. Revealing these connections can help forge coalitions capable of delivering and accelerating the transition to long-term sustainability and the economic viability of agricultural supply chains, in the Amazon and beyond.
There are encouraging signs that these kinds of partnerships are starting to emerge, such as the Tropical Forest Alliance that was founded in 2010 at Rio+20 and brings together a unique global partnership of governments, companies and civil society organizations with the explicit goal of reducing deforestation associated with the sourcing of agricultural commodities.
There is a growing number of other such partnerships emerging, including around specific regions and commodities, involving actors that span the full breadth of global supply chains. The challenge is now for these partnerships to fully mobilize and accelerate efforts to deliver on 2020 commitments lest this unprecedented window of political opportunity for global action to curb deforestation be lost.
Author: Toby Gardner, Stockholm Environment Institute (SEI)
Contributions: Caspar Trimmer and Javier Godar (SEI); Helen Bellfield, Rachel Mountain, Alex Morrice, David Sabogal (GCP)
This op-ed was first published by CDKN- See more at: http://cdkn.org/2016/04/feature-transparency-agricultural-supply-chains…