Concerns about Brazil soya project

28 May 2004

Brazilian NGOs have criticised a planned new IFC loan to a major soya producer in the Amazon region. They point out in particular that a meeting they held with representatives of the soya producing company – Amaggi – is being misleadingly used as evidence of NGO collaboration with the company as part of its application for further funding. They contest the loan which they beleive would lead to further deforestation and social conflict.

Amaggi, which in 2002 received a $30 million loan from the IFC, is a soya producer, processor and exporter. It belongs to Blario Maggi, the world’s largest soya magnate and currently the governor of Mato Grosso state. The loan is for working capital, allowing Amaggi to finance 900 soya planters in Mato Grosso and Rondonia states. The IFC classified this loan as category ‘B’, so environmental conditions apply only to the immediate project area. At the same time, Maggi is among the principal beneficiaries of the paving of 1,700 km of highway through neighboring Para state to the deepwater Amazon river port of Santarem. He organized a consortium of soya exporters and transporters to finance the road in partnership with the government. Local activists complain that the road paving has already “unleashed a land war in western Para and an environmental firestorm in Mato Grosso and Para”.

makes a mockery of environmental impact assessment

The expansion of soya for export, the imminent certification of all Amazon states as free of hoof-and-mouth disease, and increased global demand for range-fed beef in the wake of mad cow scares, has changed the terms of agriculture in the Amazon. Rural violence in Para has reached levels not seen since the 1980s as land speculators and illegal loggers seek control of land. There are reports of some 30 rural workers murdered in the corridor since early 2003. In this context, the NGOs point out that “to imagine that financing the expansion of soya production has no effects beyond the farm gate is to make a mockery of environmental impact assessment”.