Round Table on Responsible Soy Association

Last week I first came into direct contact with the Bolivian reality and its soy chain.

The impact is high when coming in touch with both the city and the productive and industrial sectors related to soy or soya, as it is called in Bolivia. This is due not only to the temperature difference (from  5ºC in Buenos  Aires to 30ºC in Santa Cruz in three hours), but also to the positive effects on Bolivia’s macro and microeconomics. Progress and growth can be felt all around the country as well as an enabling environment for innovation and changes.

In spite of this, when climbing the highest towers of the city, smoke coming from burning fields can be seen on the horizon as a result of clearing and expanding areas for growing soy or other crops such as coca, which is spreading rapidly.

Santa Cruz is a case study because of the progress and success achieved by Bolivian and foreign migrants who have moved there in recent years and who have become successful farmers. Migrations of poor small-scale producers from other Bolivian regions who are nowadays thriving farmers in Santa Cruz are commonplace.

Bolivian production has some important economic advantages such as subsidized diesel,  differentiated tariffs for the Andean Pact countries (Colombia, Peru, Ecuador and Bolivia) as well as bilateral trade agreements with Venezuela (former member of the Pact). The climate is mild for growing soy and other crops, enabling rotation of more than one crop a year.  Although increasing, price discounts off Chicago prices are currently around US$100, which places Bolivian farmers in an advantageous position over their Argentine neighbors, who have up to 35% deductions from  their prices as export duties (soy at  US$640 = US$224).

Disadvantages of the Bolivian system:

• its logistics: it is a landlocked country and the triangulations to reach the countries of destination raise costs

• legal instability: laws frequently change and land tenure is not a long-term guarantee, especially for foreign and larger scale producers

• sale options for producers are not as high as in other neighboring countries

• its target markets are not the big market “players” (China and Europe), although this can also be seen as an advantage

• although they are currently in a good situation, there is a large number of small producers who lack organization and insertion. There are also successful cases of producer cooperatives (e.g., in the Okinawa region)

• there is contradiction between productive expansion policies and environment preservation (natural, social, cultural, etc.)

Within this framework, my visit mainly focused on participating in a forum organized by IBCE (Instituto Boliviano de Comercio Exterior – Bolivian Foreign Trade Institute) and ANAPO (Asociación de Productores de Oleaginosas y Trigo Boliviana – Bolivian Association of Oilseed and Wheat Producers) on responsible soy production and the RTRS approach.

Agustín Mascotena speaking at the Forum “Responsible soy production in Mercosur and Bolivia: RTRS Standard”.

I was pleasantly surprised at the level of participation in the forum and the sector’s eagerness to acquire knowledge. Bolivia is undoubtedly a breeding ground for the RTRS to continue implementing the  programs led by ANAPO, IFC (International Finance Corporation), Solidaridad and other local agents.

Bolivian producer

The major difficulty in keeping the degree of self-sufficiency required by continuous improvement models proposed by the RTRS is the connection with international markets, which currently demand certified soy or, in the absence of this, local industries’ conviction that they need to work on sustainability if they want their own businesses to  survive and adapt. The RTRS Credit Trading Platform has indeed become a fundamental tool in this transition stage, making it possible to link these producers’ efforts with companies willing to support the transformation and conservation of those areas where the production / environment overlapping must be taken into account.