Dialogue session on soy volatility and the sustainability effects of changing price and premiums

On June 2nd, a webinar session, organized by the ProTerra Foundation and the Collaborative Soy Initiative[1] (CSI) took place, focusing on soy market volatility and on the impact of changing prices and premiums. The complexity of the topic was recognized during the session. A follow up session was organised on July 1st, to openly discuss remaining questions and potential solutions.

During this dialogue session participants were able to add their comments or pose their questions and doubts on how to deal with volatility and how to turn the tide by offering farmers and traders more security to invest in sustainability.

Emese van Maanen (managing director of ProTerra Foundation) started the session by contextualizing the subject and recapping main points discussed on the previous webinar.

Heleen van den Hombergh (CSI Coordinator) kicked off the dialogue by presenting remarks and consideration some of the speakers of June’s Webinar posed: the main difference between buyers, farmers and seed developers relates to time; consequences; downside of dynamics; responsibilities; costs and positive engagement.

Participants of the session comprised representatives from the whole supply chain: Cooperativa Agrária Agroindustrial[2] (Brazil), Agronomics[3] (Sweden), Value Chain Consulting[4] (Brazil), Retail Soy Group[5], Soja Livre[6] (Brazil), J. Müller[7] (Brazil/Germany) and RTRS[8], among others.  This diversity of representatives allowed the discussion of the subject from different perspectives, for instance, retailers, producers and farmers.

The main discussion went around the role of different actors in the supply chain:

  • Who is responsible for creating transparency in order to have long or mid-term contracts?
  • Soy volatility impedes farmers to make investments on sustainability: what is the role of the traders?
  • Who has the responsibility of offering long-term agreements to farmers?

Here are some of the main points participants raised during the discussion:

  • There is a need to have a closer dialogue between the retailer and the consumers, focusing on their needs, guaranteeing sustainable and traceable products.
  • For the chicken producers there is no price information on GMO free soy available – there is no accurate information regarding the premiums.  It would be important to supply transparent information on pricing.        
  • Retailers have the power to pull the chain; activists, advocacy groups and NGOs can influence and inform the consumers.
  • Sustainability begins with agriculture and there must be a way for paying for environmental services in the market.
  • There is a need to distinguish between raw material price versus delivered price and there is a cost if a company requests a segregated supply chain.
  • The critical piece of every strategy should be focusing on transparency, so this would enable risk analysis.
  • Retailers can´t enter into a long-term contracts with the trader due to the complexity of the chain; contracts go through producers, and they go through feed manufacturers.
  • Non-transparency on the premium has led to reducing the production of non-GM soybeans in Brazil.
  • Address the gap between the farmers, the crushers and the retail: information is required in advance so that the actors can plan.
  • Retailers are the catalysts behind the whole debate, while consumers might be emotional and easily confused about deforestation being equal to soy production;
  • There is a need to actively engage with retailers and to create awareness among consumers.

Overall, we have learned that engagement is needed on all levels: farmers, crushers, traders, feed compounders, retailers, governments and consumers. It is essential to create long-term agreements with producers based on transparency, involving the traders and calling in retailers to take a more participating role in the cost-sharing of sustainability. Also, having legislation in place and informing the consumers is important to create a more stable market.

You can find the presentation of the Dialogue Session here and access the recording here!

We would like to thank all participants for their lively discussions and for sharing their ideas.

Don’t hesitate to contact us for more information on the Collaborative Soy Initiative (CSI), or in case of further questions. https://thecollaborativesoyinitiative.info/

[1] https://thecollaborativesoyinitiative.info/
[2] https://www.agraria.com.br/
[3] http://www.agronomics.se/
[4] https://www.valuechainconsultoria.com.br/
[5] https://www.retailsoygroup.org/
[6] https://sojalivre.com.br/
[7] https://jmueller.de/en/
[8] https://responsiblesoy.org/?lang=pt-br