Property Rights and the Soybean Revolution: Shaping How China and Brazil Are Telecoupled

Today, more than 60% of the world’s exports of soybean are exported to China from the United States, Brazil, and Argentina, with the soy used as feed to produce pork and poultry. Brazil has over time become the world’s largest soybean exporter to China, and as a response to rising Chinese demand, it has also become the second largest global producer of soybeans after the United States. The development that the authors are analysing in this paper is how Brazil (and China) can try and are currently trying to protect or regenerate their natural ecosystems biodiversity, given this telecoupling trend. By analysing this telecoupled relation and its impacts on land-use and conservation as well as internal processes such as policies, legislation, and international treaties, the authors highlight how property rights influence and shape national decision-making in this area.  

A main concern is that Brazil, as one of the most biodiverse countries in the world and holding one of the biggest carbon stocks on the planet (in the biomass of the Legal Amazon which includes Mato Grosso, the biggest producer of soybeans in Brazil), has seen large-scale, rapid land-use change given the pressure of China’s demand for commodities. The paper refers to earlier evidence showing a strong correlation between high soybean prices and deforestation in the Amazon. China on the other hand has been able to maintain (rather than expand) its soybean cultivated area by importing most of the increased demand for soybeans. Without these imports China would have had to triple the land area for the production of the 56 million tonnes required from the growing, additional demand, something that would bring high environmental costs. Instead China has now been able to protect and expand its forest cover by removing land from agricultural production and making the country a leader in reforestation and carbon sequestration. As a result of the international soybean trade China has had opportunities that allowed it to regenerate its lost natural systems. For Brazil on the other hand this telecoupling has led to losses of natural ecosystems, particularly in the Cerrado and its ecotones with the Amazon’s forest biome.

By reviewing various policies and legislations around rural property rights and priorities, as well as analysing the transformations in terms of land-use in the two countries, the paper concludes that the countries have chosen very different strategies to boost their environmental sustainability. It states that the transformation in Brazil could take place because they had a property rights system that favoured the expansion of land. Brazil uses legislation to define the requirements for conservation areas (mandated protected areas) and sustainable land-use. This is said to have had unintended consequences with displacement of deforestation to places with smaller required conservation areas. China uses an incentive-based strategy that seeks to manipulate the land management rights of farmers and their preferences and their property rights regime favours the long-term productivity of the land.  Their conservation strategy has also relied on a monoculture forest plantation system, and the authors argue that an increased focused on biodiversity in reforested areas is needed. This strategy is also made possible through the externalization of soybean production—allowing them to focus on restoring and conserving forests and ecologically sensitive areas.

Abstract

China currently has the largest population in the world and is currently experiencing rapid economic and urban growth, becoming the world’s number one pork and poultry consumer. In order to meet this growing demand for meat, China has increased its demand for soybeans to produce chicken and pork. It has imported soybeans from the United States, Brazil, and Argentina, while keeping its soybean production for direct human consumption stable at home. Brazil has become the largest soybean exporter to China, and, in response specifically to Chinese demand, has become the second largest producer of soybeans in the world. This has changed land use in Brazil, particularly in its central plateau. In this paper, we indicate how these two countries, telecoupled by trade in soybeans, are depending on each other as they try to balance environmental and economic objectives. Brazil, as a sending system, has created pressures on its natural ecosystems, which have led to losses particularly in the Cerrado biome and its ecotones in the Amazon’s tropical moist forest biome. China, as a receiving system, has created a land asset important to regenerating its lost natural systems (e.g., forest cover areas). Both countries have different property rights regimes, which have created distinct circumstances in which they are to protect or regenerate their natural ecosystems. Throughout this paper, we analyze how both countries have dealt with the lure offered by the soybean commodity trade.

Reference

Torres, S., Moran, E., da Silva, R., (2017), Property Rights and the Soybean Revolution: Shaping How China and Brazil Are Telecoupled, Sustainability, 9(6), 954; doi:10.3390/su9060954

To find the full paper, see here (open access).