Expansion of soybean farming into deforested areas in the amazon biome: the role and impact of the soy moratorium

Abstract

In the 1990s and 2000s, soybean farming grew sharply, particularly in states located in Brazil’s mid-west region. To curb deforestation, the Federal Government implemented command and control policies and, at the same time, soy-buying companies and Civil Society Organizations implemented the Soy Moratorium. This paper focused on the major role of these initiatives in decreasing soybean farming in areas deforested after 2006 and their importance in achieving this result. We considered rich database deforestation, and soybean planted area based on highly detailed remote sensing images, combined with explanatory variables of different sources, forming a panel data of 287 municipalities over 8 years. Spatial panel data models are implemented to avoid any spatial correlation problems and to analyze relationships through regional units and time. The results confirm that lower deforestation rates in the biome laid the foundation for reducing soybean farming in the Amazon biome. However, since 2008, when the Soy Moratorium was launched, there was a structural decline in this relationship that was decisive for a decoupling of soybean farming from deforestation. Therefore, government programs to reduce deforestation made room for a new environment for agricultural expansion in line with Brazilian law and environmental commitments. The Soy Moratorium reinforced this new order, and this production chain became a case study on public and private governance, given its importance in reducing soybean farming in deforested areas after the cut-off date. These public and private effects stress the importance of coordinated actions to achieve efficient results, especially in a large social and environmentally complex region as the Brazilian Amazon, to halt biodiversity degradation and increase participation in value added markets.