A Product Chain Organization study of Brazilian soy The role of financial actors

Examensarbete för masterexamen
Magnolo, Francesca
Deforestation in Brazil is a result of a complex network of actors and their interests around farmland and agricultural products’ chains. A particular interest by foreign investors on Brazilian farmland has also increased after the global financial crisis, leading to a process of financialization. The complexity of interests and financialization make sustainable management and governance of global product chains very difficult. What is needed, is an understanding of how this system of interests works and how this leads to negative impacts, in order to find mitigation solutions. The aim of this thesis project has been to describe and model the actor-network around the soybean product chain in order to support its sustainable management. The method used consisted in a Product Chain Organization (PCO) study which has looked at the actors, especially focusing on financial actors, along different steps of the chain, identified using a life-cycle perspective. The focus on financial actors resulted in following both the product chain and the financial chain. For doing so, a document study on soybean companies, foreign investors, Brazilian communities and deforestation policies has been performed as well as two interviews to some important financial actors. The model created showed the importance of specific types of actors along the chain and the links between them. Some investors own very large shares of agricultural funds or companies for farmland investments. Hence, they can exert a strong influence on how agricultural funds and their farmland investments are managed, with the power of having a highly positive or negative impact on a local level. So far, the main limitation of investors in their approach to sustainable investing is due to the subordination of environmental and social benefits to financial ones. Thus, there is still a gap between sustainability commitments and actual outcomes. The method used proved that LCA studies and PCO studies can complement each other. PCO studies, looking at the interactions of actors responsible for the actual global flowing of products, provide opportunities for minimizing the impacts identified by LCA studies. Moreover, this thesis project has shown that there is scope for all types of financial actors to reduce deforestation and build more sustainable global product chains. Remote actors, such as foreign investors, have a concrete influence on a local level and the power of changing the fate of vast areas of territories. Thus, the financial root is of interest and worthy of further study for sustainable management.
Deforestation, Soy, Brazil, Financialization, Product Chain Organization, Sustainable management, Life Cycle Assessment
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