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SOY EXPANSION IN THE BRAZILIAN AMAZON REGION:
A LOCAL AND GLOBAL SOCIAL DILEMMA
Clara Whyte, economist, France/Brazil
Chloé Cadier, Cirad- CDS, Brazil
Richard Pasquis, Cirad - CDS, France/Brazil
Geert Van Vliet, Cirad, France
Introduction
With output of 52.2 million tons and exports of more than 30 millions tons in 2003, Brazil has turned into the
largest exporter and almost the first producer of soybean in the world just after the US. The soybean sector
now accounts for 6% of GDP and employs 5.5 million people across the whole country1
.
However, behind this apparent economic success, a social and environmental drama is unfolding. In fact,
soybean expansion is mostly taking place in the Amazonian region, which is of the greatest environmental
importance, not only to the local communities, but also to the whole planet. Consequently, this raises the
classical problem of the appropriation of a set of Common-Pool Resources (CPRs) by a limited group of
private actors and the suboptimal equilibrium that is reached if we intend to rely only on market regulations to
manage these resources.
In this article, our aim will not be to condemn soybean expansion and its production out of hand, but rather to
understand its underlying processes and impacts to think of pro-active solutions to be developed in the future
to make Brazilian soybean production sustainable, that is, both economically profitable and socio-
environmentally beneficial in the short and long run.
To this end, we shall first analyze the elements of soybean expansion in Brazilian Amazonia: what is the
background that enabled it? What are its economic benefits and socio-environmental drawbacks? Why can
we say that it is a typical example of mismanagement of CPRs, albeit on an unusually large-scale?
In the second part, we shall describe the attempts that have been made to regulate the processes of soybean
expansion and explain why these have all led to a dead-end. As we shall see, this is because, in the absence of
coordination between the actors involved (due to information and/or power asymmetry), the equilibrium
reached under free-market conditions is unsustainable in the short and long run.
In the third part, we shall try to think of ways to implement coordination processes between the various actors
and agents involved in soybean expansion and Amazonian conservation. As these processes are to be
implemented in a controversial universe, that is in the context of great uncertainty, they shall be considered
only as basic procedural proposals that we expect to see evolve over time, rather than as substantialist
solutions.
Abstract
Thanks to the recent context of globalization and a favorable international market, Brazil has turned into the
largest exporter and almost the first producer of soybean in the world. Behind this apparent economic success,
social and environmental negative impacts are at stake. Indeed, the development of Brazilian soybean
production has been achieved by extending south country production to new areas in the Legal Amazon. The
process of expansion is characterized by the emergence of an entrepreneurial approach to production and the
strong presence of multinational firms. Several actors and agents are involved, each acting globally and/or
locally in order to defend their owninterests.
We are facing a classical social dilemma of Common Pool Resource conservation: soybean expansion or
environmental preservation? The social dilemma is double: one is local, as the use of local resources provides
benefits, and the other is global, as the global community is affected by this activity.
1
WWF-Brasil, Avaliação de sustentabilidade do crescimento do cultivo da soja para exportação no Brasil, Brasília, Nov.
2003.

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Several solutions have already been implemented. Because of the contradictions of environmental and
agricultural policies, and because of the dominance of economic interests, attempts to solve the dilemma have
failed.
How can we then promote sustainable soybean production in the Amazonian region? Every analysis should be
systemic and interdisciplinary, having a multi-scale approach and taking into account interactivity between
actors.
1. Beyond economic success, social and environmentalconsequences
Since the beginning, the Brazilian economy has always been based on export agricultural production. In this
sense, soybean production is no novelty. However, because of the new economic and political background
that has emerged due to trade liberalization trends and globalization processes, it has evolved from the
traditional colonial exporting model to a dynamic entrepreneurial model that is much more business-oriented
that in the past, and thus has a much greater capacity for putting predation pressure on CPRs than in the past.
In order to understand the processes of soybean expansion in Amazonia, its economic benefits and socio-
environmental drawbacks, we shall describe the new conditions it faces and how these have changed Brazil’s
traditional export model.
We shall then indicate the major socio-environmental impacts that the new model has significantly amplified
and explain why we can say that these impacts are the result of a classical problemof CPR mismanagement.
1.1. A new background leading to the emergence of an entrepreneurial model
Since the end of World War II, the world’s economies have all experienced a process of liberalization that is
mainly characterized by the reduction of trade and non-trade barriers between them. This reduction has led to
the acceleration of exchanges between them, not only of products, but also of capital, and to the emergence of
new actors, i.e. MNFs (Multinational Firms), which invest and produce wherever they find the best conditions
and export their production to wherever there is profitable demand. These liberalization processes have led to
the so-called “globalization” of the world economy.
Such globalization has had both major political and economic consequences for the world economy in general
and for the soybean sector in particular. Indeed, it has had a very favorable impact on agriculture, which
offers great market opportunities, but at the same time, it has demolished the trade barriers that have
traditionally protected this sector. The opening up of its economy has made Brazil more vulnerable to other
countries’ actions. Thus, the soybean sector now has to face severe competition, and Brazil has to position
itself to take part in international agricultural negotiations.
From a political point of view, globalization has reduced the role of territorial sovereign states such as existed
under the Westphalian system of states. “The authority structures seem by far more complex, flexible,
overlapping, crosscutting networks of governance, far more post-modern, if you wish.”2
The global economy
is now dominated by polycentricism and interconnectedness with regard to the sharing and organization of
powers and decision-making.
To respond to this new reality, decentralization policies have been implemented in almost every country in the
world, including Brazil, to give more power to the authorities that are more relevant on a certain geographical
scale or level. These authorities themselves cannot always be described as “local” because they include actors
that develop actions in a certain geographical location that may be local communities, but also MNF
representatives that implement strategies at this level in response to temporary advantages they can get out of
such places. Thus the notion of territory, as a geographical entity, with social and historical significance, has
been considerably obscured and will be used with caution. It is still of some relevance and importance to the
local actors that are unable to be included in the global dynamics; however, it is increasingly insignificant to
the other actors, including those local ones that are able to accommodate the transnational influences and take
advantage of the new global neo-liberal consensus.
2
Wallace W. (1999), “Collective Governance” inWallace H.I.W. Wallace (Eds), Policy-Making in the
European Union, Oxford, Oxford University Press, pp. 523-542.

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In the case of soybean, these globalized local actors clearly form a new caste of modern entrepreneurs that are
permanently linked to the global markets to adapt their local production to the demands of these markets.
Generally originating from Southern Brazil, traditional landowners have little by little relocated their
production to the Center-West to take advantage of low land prices there, while integrating mechanized
agricultural techniques and developing modern infrastructures, with the help of public (such as Embrapa) and
private research institutions. Soybean production has been fully adapted to this region.
Thus, the Brazilian soybean cycle, unlike the coffee or sugar cane cycle, is plainly a part of global economic
and political dynamics. It has contributed to the appearance of a new entrepreneurial model characterized by
its capacity really to take advantage of the new dynamics, rather than be dominated by it. Soybean production
has integrated Brazil into the international commodity market and introduced the “agribusiness” concept into
the country. This new framework involves strong economic interests and a market that does not provide
incentives for more sustainable soy production. Indeed, a commodity market implies no product
differentiation. The context in which Brazilian soybean production is expanding does not take into account
human welfare and the environment.
In fact, globalization processes are of major importance to human welfare and the environment as global
demand for soybean has grown and will grow a lot in the future. This is the result of the economic changes
caused by globalization.
These changes are derived from trade liberalization processes that have been developing every day, mostly
through the implementation of new regional and global agreements. These enable the MNFs to relocate
production to the geographical locations that offer the highest levels of comparative advantages for a certain
product.
In the case of soybean production, it happens that Brazil has very high comparative advantages, as it disposes
of wide areas of cheap land, a flat topography, a stable and advantageous climate and high levels of
technological development. In addition, the local and federal authorities generally implement very favorable
agricultural and trade policies. As a result, it is a very advantageous location for the major MNFs that are
willing to increase their crop production.
These MNFs clearly control the soybean chain from the supply of inputs to soybean crushing activity in the
consumer countries. In the past few years, we have observed a consolidation and internationalization process.
There are four big international groups that dominate soybean crushing in Brazil: Bunge, Cargill, ADM and
Louis Dreyfus. Most of them have bought Brazilian industrial concerns. They do not only have a major role in
Brazil. For instance, ADM stocks and crushes seed in Brazil, but also crushes it in Europe. The three bigger
American firms control 80% of European crushing (Dros J.W.V. & Gelder J.M., 2002). As Ana Célia Castro
(2002) explains, the commodity markets are a sector in which profit margins are reduced, so that it requires
large economies of scale on the part of manufacturers, leaving space only for the “big players”.
They are even more encouraged to increase their production in locations such as Brazil as the liberalization
processes offer very attractive demand-side prospects. The reduction in agricultural subsidies negotiated at the
WTO on major markets such as the EU, China or even India in the coming years, accompanied by higher
demand for vegetable animal rations following the BSE crisis and the current reduction in US soybean
production, are expected to further boost Brazilian soybean exports in the short and medium run and turn
Brazil, already the world’s largest exporter of soybeans, into the world’s largest producer as well.
1.2. The social and environmental drawbacks of the soybean miracle
However, the economic success of the Brazilian soybean sector should not hide the important social and
environmental impacts caused by soybean expansion, especially in the Amazonian region.
1.2.1 Social exclusion and the breakdown of territorial structures
The levels of development and living standards reached by the “soybean cities”, in particular in the Mato
Grosso, are comparable to those of the developed regions of Southern Brazil.
However, these soybean-based economies put these cities in vulnerable positions as they are not diversified at
all, and consequently much more exposed to ris k.
Furthermore, dependence on external conditions, specialization mainly in unprocessed crops and the
processes of land concentration are important factors of social exclusion in the regions of soybean production.
The concentration of land ownership is a process that has been observed even in the Southern regions
(although on a reduced scale in this particular case), where the role of small farmers has been historically

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greater. This land concentration process has been widely due to the imposition of productivist monocultural
models of production (inherited from the Green Revolution). Soybean production itself induces large-scale
farming to increase product profit margins. This leads to the eviction of the weakest producers and thus to
rural exodus, especially in the Amazonian region, where for each million of planted hectares (ha), four
thousand permanent jobs and six thousand temporary ones have been created, which roughly corresponds to
one job (either permanent or temporary) for every 100 ha.
The exclusion of these producers has had terrible consequences in terms of social exclusion, especially
because the specialization of Brazil in unprocessed crops has rendered this country incapable of modernizing
and creating a national processing complex of agro-industries that could absorb the labor surplus created by
the rural exodus.
Consequently, the excluded labor is reduced to living in extremely precarious conditions, relying on seasonal
salaried jobs and self-consumption, or migrating to urban centers,where it remains unemployed, increases the
“favelas” and violence, and loses its valuable historical cultural capital.
We also stress that in many regions, especially the frontier regions, the development of social exclusion also
has negative impacts on the environment. Either this excluded labor migrates to urban centers, or it has to
settle on new land. In many regions, this population displacement induces deforestation as the excluded go
wherever there seems to be space for them to produce at least wh at they need to live. As a result, dealing with
social exclusion implies dealing with several aspects of the deforestation process as well.
1.2.2 Environmental impacts
Because of the complexity of ecosystems, and the fact that various time and space scales have to be taken into
account, the assessment of the environmental impacts of soybean expansion remains very partial. We are
typically in a controversial universe in which pure science has to give way to speculation and theory.
However, there are some commonly accepted and obvious consequences.
First of all, deforestation has widely recognized effects on macro- and microclimates. Climate model results
show that in deforested areas the average temperatures rise, evapotransporation is reduced and the general
atmospheric and precipitation conditions are modified. (Nobre et al. ...)
These phenomena may have dramatic effects on Brazil and its neighbors in the Southern Cone. In fact, the
Amazonian region regulates the rains in the whole region and its destruction may lead to drought in certain
regions or to sudden river flows. These impacts may be very negative for the agricultural sector and more
particularly for future soybean production in the region. The main agricultural regions in Brazil may indeed
suffer from excessive drought for grain production.
However, the impact of deforestation on soybean production is still very slight in Brazil compared to the
territorial vastness of the country and its high cultural diversity. Can deforestation be directly linked to
soybean production? Until now, few soybean producers have directly cut down native forests. They have
usually bought land already used for breeding or occupied by small producers. Soybean production has
pushed these actors forward, causing the agricultural frontier to advance. Today, in addition to this dynamic
force, technological progress has led to the incorporation of intact areas.
Furthermore, and this is a second major impact, the quality of water resources is very much threatened by
deforestation and this could adversely affect soybean expansion too. Mechanized agriculture uses a lot of
pesticides and other agrochemical products that contribute to the deterioration in water stocks. In addition,
aircraft often disseminates these products. Such aircraft are not as precise as land engines and their utilization
might affect forest areas that are in contact with the fields.
Moreover, the soybean monoculture model developed in large areas in the Center-West region has led to an
increase in diseases. In January (mid-growing term), most soybean productive regions had already been
affected by “Asian rust”. This implies a greater utilization of agrochemical products and major damage to the
environment.
These intensive agricultural methods also tend to provoke soil erosion and gradual loss of soil fertility. There
is a great lack of long-term vision in the way producers manage their property. They find it difficult to be
aware of the productive and economic limits of their activity.

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Biodiversity loss is also an important consequence of the deforestation caused by soybean expansion. It
causes the destruction of precious ecosystems and thus of hundreds of original species, eliminating or
reducing fauna and flora. Moreover, there is no management of space occupation, which has resulted in the
destruction of ecological corridors and adversely affected high biodiversity areas.
What is more, the areas that are not deforested but are close to agricultural areas are also very adversely
affected: it is estimated that the forested areas situated within a radius of 100 meters around the zones of
deforestation lose about 36% of their biomass in the following 10 years, while forested areas that are
completely surrounded by agricultural areas turn into secondary forests in which only 35% of their original
species survive.
1.3 A classical social dilemma: soybean expansion or environmental conservation?
The issue of soybean expansion and its impact on environmental conservation is a typical illustration of the
social dilemma of CPR conservation under pure, or almost pure, market conditions: these always lead to a
suboptimal equilibrium. The only special feature is that the population concerned by the environmental
destruction is not only local but also global, due to important spillover effects (climate change etc.).
Consequently, the modelization of the situation is slightly more complicated and can be represented as
follows:

6. 6
In: Cardenas J.C. (April 2000), “Thinking Globally and Getting Others to Act Locally: Polycentricity and the
Conservation of Biodiversity” – First Draft, Workshop in Political Theory and Policy Analysis, Indiana
University.
This graph can be explained as follows.3
Soybean production does not come from nowhere. It uses natural resources such as soil, water, or forests
when land has to be deforested prior to production (as in the Amazonian region). Moreover, the production
process produces not only soybean, but also other outputs such as water and soil pollution etc. the solution to
which depends on the sink-capacity of the local ecosystem.
Thus, if we consider the concave curve above as the flow of economic benefits that a local group receives
from a set of resources and functions provided by the local ecosystem, we can state that there is a double
social dilemma: one is local and the other is global
The local dilemma comes from rivalry for the use of the ecosystem’s functions and resources. It is rational
for soybean producers to produce as long as the cost of production does not exceed the expected economic
benefits. Their equilibrium is thus: eoa
However, if we rely on simple game theory results, we can state that, in order to avoid the rapid and complete
extinction of certain resources and functions, the different producers might find it rational to use the resources
more cautiously, thus reaching equilibrium: eNash
This equilibrium itself remains above the social equilibrium that corresponds to the levels of resources and
functions of the ecosystem that the whole local community wishes to preserve, that is e1-opt
.
The solution to this local dilemma is either the intervention of an external actor, such as the state, which will
impose green taxes on the producers in order to achieve the social equilibrium (Pigouvian solution), or
through the creation of self-regulating institutions within the community (Coasian solution).
The global dilemma adds another complication to the resolution of the model, as the level CPRs to be
preserved does not only correspond to the resources that the locals want to preserve, but also to the ones the
global community wants to preserve as their destruction will have global effects (climate change etc.).
The level of global CPRs to be preserved is thus to be found in eg-opt
, and the difficulty remains how to
transfer the money that the global community is willing to pay to preserve those resources for the local
community and the producers, and how to make sure that these consequently preserve the level of resources
required.
At this local level, market instruments (certifications etc.) will probably be more efficient than trying to build
social institutions that involve a complicated set of overlapping actors and authorities.
We can therefore state that the problems created by soybean production in the Amazonian region are quite
classical for environmental and natural resources managers and mainly come from a battle between various
interest groups and their particular sets of values. In this case, there is the superposition of one group’s
interests over other less powerful group interests. However, the novelty comes from the fact that the problem
can no longer be solved exclusively at a local level, as the new processes implemented by trade liberalization
and globalization have turned many involved actors into multi-scale players, and thus involves multi-scale
overlapping authorities.
It is a lack of understanding of this new reality that has led many previous attempts to solve the problem of
the depletion of Amazonian ecosystems to an impasse, as we shall now see.
3
This part of the article owns a lot to: Cardenas J.C. (April 2000), “Thinking Globally and Getting Others to
Act Locally: Polycentricity and the Conservation of Biodiversity” – First Draft, Workshop in Political Theory
and Policy Analysis, Indiana University. We also would like to thank J.C.Cardenas for having sent us a
PowerPoint version of his curve.

7. 7
2. Failing to preserve Amazonia: a history of unresolved rivalry and conflict
Preserving Amazonia means taking into account various criteria and values that do not necessarily
correspond to economic rationality. However, until now, the power and the influence of economic rationality
have been so great that the measures taken to favor economic development have literally eliminated all the
other rationales that include social and environmental concerns. This can be observed at state level, where
policies in favor of agricultural development have been by far more powerful than environmental policies, to
the extent that they have eliminated any effects that the latter may have had.
In this second part, we shall first show the schizophrenia observed in public interventio n and how it actually
responds to the strongest logic, i.e. economic logic, linking and orienting in that direction both public and
private national and global strategies, at the expense of local communities and global society as a whole,
which would like to see environmental concerns taken more into account.
We shall then try to analyze more deeply the relationships between the various actors involved and how they
have led to the situation of total dominance of one logic over all the others.
2.1 Contradictory policies reflect unsolved conflict and problems of dominance
The Legal Amazon has suffered from contradictory visions on the part of public authorities.
On the one hand, Amazonia is considered as an important source of natural resources and thus has benefited
from environmental policies aimed at preserving its large natural capital. On the other hand, it is perceived
as an isolated region still to be conquered and economically integrated into the rest of the national territory.
It has therefore suffered from contradictory policies at local, regional and federal levels: environmental
policies have tried to preserve its natural resources, while agricultural and trade policies have done
everything to expand export-oriented agricultural production in Amazonia.
Both policy directions, however, have not had the same weight: the economic importance of agribusiness to
Brazil has made economic logic in the region far stronger that environmental logic, especially in the context
of trade liberalization and growing external demands for Brazilian crop production such as soybean.
Of course, in a proper Pigouvian approach, we would expect the state to resolve this contradiction and help to
achieve a social equilibrium between environmental preservation and economic development. Yet this is not
what has happened in reality, where environmental policies have been relatively isolated and less favored
financially than the policies aimed at the development of the agribusiness sector.
We can relate this situation to three major facts.
First, environmental policies have been rarely developed independently and for themselves. They are
generally implemented in the form of technical proposals that are added on to other wider development
policies. These proposals usually aim more at taking advantage of a certain market differential over
environmentally differentiated products than actually to manage a certain set of natural resources and
environmental functions.
Second, we can observe a tendency of the various groups of actors involved (the public sector – the private
sector – civil society) to implement their own strategies on their own, as if one did not overlap with the
others. In a complex polycentric system, this differentiation does not allow the development of large-scope
policies that would address all the problems at the same time. It does not allow the implementation of
flexible policies that respond to complex conditions and quick changes in the socio-economic and
environmental context. Nor does it lead to the creation of substantive policies, whereas the current complex
polycentric system calls for the implementation of procedural logic in the formulation of public policies.
Third, if two actors did integrate their actions and decisions, these would certainly be the public and the
private sector, as there seems to be some kind of collusion between them.
This last point is particularly striking in the case of soybean expansion, where the private and the public
sectors have been working hand in hand to develop the comparative advantage of the region. While the state
has provided a favorable legal context, credit for transportation infrastructures, scientific research,
technologies etc., the private sector has complemented state action by investing in land, deforestation and the
construction of production and warehousing infrastructures.

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A good example of public intervention aimed at facilitating soybean expansion in the Amazonian region is
the project called IIRSA (Iniciativa de Integração da Infraestrutura Regional da América do Sul – Initiative
for the Integration of Regional Infrastructure in Southern America). This project will lead to the construction
of major transportation infrastructures across the whole Southern cone of the American continent, thus
drastically reducing transportation costs from remote Brazilian regions (such as Amazonia) to other countries
such as Argentina. It is widely known that transportation costs are a crucial factor of competitiveness on
international markets.
2.2 Mapping the actors and their relationships within a polycentric system of governance
If we want properly to understand the origins of the social dilemmas and political contradictions described
above, we need to map the various actors and their key interactions better. We shall then see that it is a lack
of negotiation between the actors that leads to the imposition of the law of the strongest as a management
rule, and thus to a Nash equilibrium.
2.2.1 The actors and their interactions
The case of soybean expansion is an exemplary situation featuring a multi-scale social dilemma. For the sake
of clarity, in this brief article we have chosen to consider it as a double dilemma with a local level and a
global level.
Thus, at the local level we have three major agents or actors: first, the private sector, which
encompasses all the people involved in soybean production; second, local public institutions; and third,
local civil society, which includes most of the people who are not involved in soybean production.
The private sector needs to use or eliminate local natural capital to produce soybean. It does not internalize
the negative costs of its actions, and thus it expands its activities at the expanse of the local civil society’s
welfare.
The local public institutions could help achieve a good social equilibrium if they represented the interests of
all the locals. However, their strong collusion with the private sector and their ability to obtain benefits at
higher levels (say federal) lead them to help the private sector’s expansionary strategy and deny the effects of
this on the rest of the locals.
In short, the collusion between the private and public sectors at local level, and their lack of consideration of
civil society’s wishes lead to a Nash equilibrium.
To achieve a local social equilibrium, we have to find a way to restore a balanced sharing of powers and thus
have all the actors negotiate locally with the same weight.
The problem is that restoring the balance of powers cannot be done only at local level because the asymmetry
comes precisely from the fact that the private and public actors are able to gain benefits at other levels from
the depletion of local resources, which local civil society cannot reach.
This is where the global dilemma becomes interesting. It will help solve the whole problem, as if it were the
second equation necessary to solve the problem of a system with two equations and two unknown variables.
At the level of the global dilemma, we find that civil society extends to include distant groups of citizens
in other countries that have an interest in the preservation of the Amazonian region. The involvement of this
second group might enable us to overcome the asymmetry of powers observed at local level, because the
group of global citizens does not benefit from the transformation of local natural capital in the production
process. On the contrary, it is very concerned about the impacts that the destruction of the Amazonian forest
might have on the biosphere.
Because these global citizens are generally the global consumers who buy soybean, they could be an
important means of modifying the terms of the dilemma. How?
External managers might find a way to have global citizens express their willingness to pay for the
conservation of the Amazon, and then use these financial resources to internalize the environmental costs of
soybean production. This could lead to less production, but sold at higher prices, which would not be
prejudicial to the producers and could even benefit them; or it could lead to the same level or even higher
levels of production, but associated with better practices (for example, organic soybean produced on already
degraded land etc.).

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In short, we can resolve our double dilemma through a double process: developing institutions at local level
that help diminish the asymmetry of powers, and developing market instruments at global level that enable
global civil society to help local producers internalize and reduce the environmental costs of their production
without their profitability being threatened.
The role of the public sector here would be to help implement the previous market instruments (when
necessary - for example, certification) and to help organize the local institutions.
3. Promoting sustainable soybean pr oduction in the Amazonian region: some final considerations
Demand for soy on world markets is likely to continue growing. Prognoses expect it will increase by another
40 percent by 2020. In the Mato Grosso, it is estimated that soybean cultivated areas could double to 40
million hectares. The challenge now consists in steering this growth towards sustainable production (WWF,
2004).
However, from a critical analysis of more than 20 years of action and applied research in the Amazon region,
we can deduce the ineffectiveness of current regulation approaches. This ineffectiveness has many causes:
processes where (global) markets play a prominent role and remain relatively insensitive to national public
policies as they conceived and implemented today. In these markets, stakeholders operate from strongly
asymmetric positions and their strategies are based on different sets of values and expectations, which in turn
influences the way they interact within these markets. Each day, it becomes clearer that the idea of common
goods itself still has to be agreed among multiple stakeholders in conflict at different levels (different
ministries within government, different interest groups within the private sector, multiple approaches within
civil society). In these contexts characterized by often opposing views of the world, and by competing uses of
natural resources, we observe the prominence of strategies that -because they are based on intents to mutually
command and control other stakeholders - merely fuel more conflict. Stakeholders develop individual and
parallel strategies. While they are used to speaking, campaigning or shouting at each other, they more rarely
engage in true dialogue, which results in few examples of jointly agreed action.
It is the biggest challenge that any initiative in favor of sustainable soy production will have to face. The scale
of the problem goes beyond the scope of any single stakeholder.
Sustainability means reducing externalities or social costs in order to achieve a Pareto optimum. To achieve
sustainability, three ways are possible: taxes, market rights and negotiation. However, in a low governance
and weak public policies context, as in the Amazon region, and bearing in mind that market forces and
increased competition between producers lead to a higher concentration of producers, taxes and pollution
rights requiring a complex system of control and tax collection are certainly not suitable. Therefore, to foster
the internalization of externalities and reverse the current process of privatization of profits and socialization
of negative effects, the only way is to achieve a trade-off between those who produce negative impacts and
the victims of such impacts. However, to attain this goal, a broad consensus is needed.
The first step is the necessary identification of the different actors concerned, such as the generators and
victims of negative impacts. The second step is to identify and assess these negative impacts. We then enter
the complex domain of views of the world and values. The question is rather complicated. How can we both
get the agreement of producers who give priority to material wealth generated by economic growth and the
advance of the agrarian frontier and at the same time minimize any other negative aspects? How can we
demonstrate that these benefits have been distributed between very few actors, and that local Human
Development Indexes remain very low?
The complication and long time it takes to get the right information may mean that we risk overstepping the
irreversibility threshold.
To offer a platform for discussion on guidelines for ecological, socially responsible and economically viable
soybean farming to be defined jointly, there is a need to explore complementary avenues and to work on the
broader notion of common goods. This implies a wide range of indicators (contribution to a way of living /
quality of life, quality of landscapes, cultural diversity, legal and moral aspects, as defined in the constitution
and in international treaties, etc.,) over and beyond the important but limited monetary market indicators. The
notion of a common good has to be jointly generated and cannot be imposed by one of the three main sectors

10. 10
(public and private sector, civil society). For the notion of common good to be accepted and internalized, it
has to be jointly built, especially in situations of shared instead of absolute power, where self-regulation
(mainly through markets), reactionary policies (avoidance, obstruction) and processes of organizational
closure often prevail.
The negotiation process allows all the relevant stakeholders and interested parties to agree on a consensus-
based approach to address the problem and to arrive at a series of joint, coordinated and effective actions in
view of a better conservation and management of regional natural resources. Mediation practices will also
contribute to a commonly build understanding of the links between environment degradation, advance of the
agrarian and resource frontiers and the conflicting views on natural resources and resulting pract ices.
Whenever this proves viable and pertinent, these practices will contribute to commonly agreed ways out of
conflict. Through fostering dialogue, the negotiation process will enable a jointly critical review of the
effectiveness of: i) existing public policy instruments regulating access to natural resources, such as zoning,
territorial planning, specific instruments to protect traditional rights; ii) other (market) oriented public policy
instruments (subsidies, taxes, markets for rights); and iii) existing private sector strategies and instruments
(for both small and larger scale producers). Innovations will be fostered regarding procedural aspects (the
way policies and strategies are designed and implemented, including organizational issues) and substantial
aspects (tax issues, internalization of rules, self-responsibility, codes of conduct, certification and labeling,
etc.).
The negotiation process will be an excellent way to raise awareness of the problem and draw attention to the
fact that in a globalizedworld no single sector can remain idle in the face of the challenges that the soy boom
is raising.
According to AID Environment scenarios (WWF, 2004), two ways are possible for increasing soybean
production to meet growing world demand: Business as Usual, with its negative known consequences, and
Better Policies and Practices.
To implement better concrete policies and practices, it is essential to connect different levels of government
and to involve NGOs and private sector actors, such as large-scale producers, traders etc.
As they are currently scarce and under-exploited, one solution would be to construct spaces for dialogue,
negotiation, innovation and collective action in favor of common goods in the Brazilian Amazon. Because of
research and educational institutions’ contribution to the generation of information and shaping of world
views, and as they are used to dealing with controversies, they could contribute to the consolidation of these
spaces. By tapping into - and consolidating - these available spaces, jointly reached agreements between the
private and public sector and civil society, concerning a number of issues, strategies, policies and instruments,
may increase the effectiveness of approaches aimed at the conservation and sustainable management of
forests, across multiple stakeholders at multiple levels (local, state, federal).
Under the presidency of President Fernando Cardoso and under the current presidency of President Lula da
Silva, and thanks to the very proactive private sector and civil society, an enabling environment for policy
dialogues has been crafted and consolidated. The possibility for the State to better incarnate and defend the
overall public interest has been considerably improved. In this context, the fast evolving agrarian and resource
frontiers in the Amazon remain as one of the more complex issues on the agenda. There is an urgent need to
maintain the rate of economic growth (to reduce urban poverty) and the capacity to generate foreign currency
(to repay debt), while at the same time dealing with climate change, the depletion of natural resources and the
loss of bio-diversity, which are among the biggest threats to sustainable development. While stakeholders side
line along one or the other dimension of the dilemma, all sectors recognize the lack of effectiveness of past
strategies and the need to rethink approaches to regulating the use and access to forest resources and territorial
development on the frontiers.
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