Transparency in agricultural supply chains to rule out deforestation
How do European livestock farmers know whether forests have been cleared for the cultivation of soy in their feed? So far, feed manufacturers have pretended to be unable to take responsibility for their supply chains. Tracing back the origin of the soy through many intermediaries along the global supply chain was too difficult for them. In the future, however, an EU law could require companies to take responsibility for their global supply chains. Publishing information on measures against deforestation along the supply chain would then become mandatory for companies selling products in Europe.
Digital tool enables tracing back supply chains
Since 2016, the non-profit initiative TRASE has shed light on the origin of agricultural commodities consumed in Europe such as soy, beef, coffee and palm oil. These commodities contribute the most to the loss of forest cover worldwide. By linking trade data with satellite images of land use on the production site over the years, the bright minds behind TRASE have been able to prove whether forests have been cleared for the production of certain commodities. TRASE identifies commodities, regions and companies associated with the highest risk of deforestation and highlights where action needs to be taken to halt deforestation.
Where does the data come from?
To identify stakeholders along a supply chain, TRASE uses publicly available and purchasable data. Data sources are governmental platforms, self-declarations from companies, and market research. Export declarations provide information on importing and exporting companies and also the country of purchase of the cargo. Since the price of a ton of soy is largely dependent on the transportation distance from the production site to the silo and the port, TRASE identifies the most likely supply chain by determining the shortest distance between port, silo and the production site.
Transparency increases the pressure on companies and governments to act
According to TRASE, nearly 3.9 million tons of soy from the Brazilian state of Mato Grosso were sold to the EU in 2018. Around one-fifth of that came from farms that illegally cleared land. Facts like these can feed debate and encourage feed manufacturers and food companies to adopt more sustainable trade practices. However, policy instruments are necessary to oblige companies to take responsibility for their supply chains. In addition to an EU supply chain law that holds companies accountable, national governance in producing countries that promotes sustainable production practices, guarantees the rights of indigenous peoples, and protects ecosystems is crucial.
More information on the TRASE transparency initiative: www.trase.earth
The blog article was originally published in German in the WEITBLICK issue 2/2021
Europa on sale (2019). Global trade and financial flows have connected continents since colonization.
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