Responsible Production of Soy Agribusiness in Brazil ABIOVE. Fabio Trigueirinho. Fabio Trigueirinho. (Brazilian. Vegetable Oil Industries Association)

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1 ABIOVE Responsible Production of Soy Agribusiness in Brazil ABIOVE ABIOVE ABAG Associação Brasileira de Agribusiness Associação Brasileira das Indústrias de Óleos Vegetais (Brazilian Vegetable Oil Industries Association) Carlo Lovatelli Presidente Fabio Trigueirinho Fabio Trigueirinho General Secretary Alemanha Seminar on two years of the National Pact for Eradication of Slave Labor Instituto Ethos 10 de - Julho São Paulo de May 17, 2007

2 Environmental Sustainability and Social Responsibility Actions by the Sector Date Action Location Nov/2004 IASC Meeting on Sustainability London Mar/2005 Aug/2005 Talk on Sector s Vision at the first Round Table on Responsible Soy (RTRS) Organizing Committee Meeting and Manifestation of Interest in Participating in the Committee Foz do Iguaçu Buenos Aires Apr/2006 RTRS Workshop Talk São Paulo Signature of the National Pact for Eradication of Slave Apr/2006 São Labor Instituto Ethos Paulo Promotion of the Seminar on Strategic Planning for Jun/2006 São Paulo Sustainability of Agribusiness Jul/2006 Soy Moratorium ABIOVE / ANEC São Paulo ABIOVE s Election to the RTRS Council in the RTRS s May/2007 São Paulo frst General Assembly

3 Soy Crop in Brazil Economy Soy is Brazil s main agricultural crop,, in volume and in geration of income Share in National Agricultural Income Over 243,000 producers (small, medium and large), spread over 17 states (1996 Census) The sector generates about million jobs - direct and indirect (812,000) and income-effect effect (645,000) Others 70% Soy 30% The Soy Complex (grain, meal and oil) is one of the country s main sources of exchange (about 10% of total exports) Source: CNA

4 Soy Crop in Brazil The 20 towns in Mato Grosso (MT) state with the highest HDI* TOWN HDI-M CLASSIF. MT CLASSIF. BR ECONOMY Campos de JúlioJ Agribusiness Sorriso Agribusiness Cuiabá Capital Lucas do Rio Verde Agribusiness Cláudia Agribusiness Campo Novo dos Parecis Agribusiness Sinop Agribusiness Primavera do Leste Agribusiness Alto Taquiri Agribusiness Sapezal Agribusiness Nova Mutum Agribusiness Campo Verde Agribusiness Alto Graças as Agribusiness Rondonópolis Agribusiness Barra do Garças as Livestock/Industrial Várzea Grande Industrial Pontal do Araguaia Livestock Jaciara Agribusiness Diamantino Agribusiness Santa Carmem Wood * HDI Human Development Index Source: IBGE, 2000 Census Social Development Vector Development of soy crops led to improvements in the quality of life and the development of infrastructure in transport, education and health in the interior of the country. NB. The HDI for Brazil in 2002 was

5 Soy Production in Brazil Characteristics Research & Development Professional Management Scale Economy

6 Research & Development Soy Production in Brazil Brazil uses state-of of-the-art technology in soy production (30 years of research) kg/ha Soy Productivity 3-year moving average 2771 ' Break in Crop Evolution of crop techniques, with the tropicalization of soy, allowed the extensive and rudimentary occupation in the Cerrados to be replaced by an activity based on technology with economic,, social and environmental sustainability Source: USDA USA Brazil Argentina

7 Soy Production in Brazil Professional Management Soy Research Bulletin Training Programs Spreading Good Agricultural Practices Soy Field Days

8 Scale Economy Soy Production in Brazil Topographic characteristics in Brazil s Center-West region favor mechanized agriculture. The average size of soy producers in the Center-West region is about 1,000 hectares.

9 Soy Production and Slave Labor Soy production requires high investments in agricultural machinery, human resources, technology, logistics and working capital. Soy production requires highly qualified labor. Soy crops are incompatible with labor that is poorly qualified.

10 The use of Slave Labor is generally associated to clearing untouched forests Actions that inhibit clearing new areas contribute to the reduction of Slave Labor

11 Soy Moratorium On July 24, 2006, ABIOVE and ANEC established a Soy Moratorium, with a duration of two years. ABIOVE and ANEC are committed not to trade any soybeans originated in areas within the Amazon Biome that were deforested after this date. In addition to addressing the growing concerns of European importers regarding conservation of the Amazon Forest, the moratorium unites the business sector and NGOs with the objective of developing a governance structure for responsible soybean production in the Amazon Biome. Therefore,, the Soy Moratorium can directly and indirectly contribute to the reduction of Slave Labor.

12 C O M M U N I Q U É ABIOVE ABIOVE, the Brazilian Vegetable Oil Industry Association, ANEC, the National Grain Exporters Association, and their respective members are committed to implementing a governance program, with the objective of not trading soy from areas within the Amazon Biome that are deforested after the date of this Communiqué. This initiative will last for two years and seeks to reconcile environmental conservation with economic development through the responsible and sustainable use of Brazil s natural resources. During this period, the sector is committed to working together Brazilian government entities and entities that represent the rural producers and civil society to: a) Prepare and implement a plan that includes an effective mapping and monitoring system for the Amazon Biome or one based on official maps received from that area s federal government; b) Develop strategies to encourage and make soy producers more willing to comply with the Brazilian Forest Code; c) Work together with other interested sectors to develop new rules for operating in the Amazon Biome, collaborating with and asking the Brazilian government to define, apply and comply with public policies (economic-ecologic zoning) for land use in this region. The sector reiterates its repudiation of the use of slave labor. Its member companies have incorporated into their soybean purchase contracts a clause that annuls the contract if labor analogous to slave labor is employed. Sao Paulo, July 24, 2006 ASSOCIAÇÃO BRASILEIRA DAS INDÚSTRIAS DE ÓLEOS VEGETAIS - ABIOVE ASSOCIAÇÃO NACIONAL DOS EXPORTADORES DE CEREAIS - ANEC

13 Soy Moratorium According to Imazon s s SAD (Deforestation( Alert System), deforestation in the state of Mato Grosso is significantly lower, compared to prior years. Source: Forestry Transparency No. 5 (IMAZON)

14 Zero Tolerance by the sector for Slave Labor Employers Register - Regulation 540, dated October 15, 2004 LIST UPDATED ON MARCH 12, 2007 Of the 166 employers listed,, 13 soybean producers were identified (out of a universe of over 243,000 producers) Of these 13 cases, only four were dedicated exclusively to the production of soybeans; ; the other farms had other activities These 13 properties are located in the following states: five in Mato Grosso, three in Tocantins, two in Bahia, one in Piaui, one in Maranhao and one in Para The soybean production chain adopted a Zero Tolerance policy for Slave Labor by: Including in their soybean purchase contracts a clause that revokes the contract if labor analogous to slave labor is employed Participating in the RTRS, which follows ILO standards