Addressing indirect sourcing in zero deforestation commodity supply chains

Abstract

The trade in agricultural commodities is a backbone of the global economy but is a major cause of negative social and environmental impacts, not least deforestation. Commodity traders are key actors in efforts to eliminate deforestation—they are active in the regions where commodities are produced and represent a “pinch point” in global trade that provides a powerful lever for change. However, the procurement strategies of traders remain opaque. Here, we catalog traders’ sourcing across four sectors with high rates of commodity-driven deforestation: South American soy, cocoa from Côte d’Ivoire, Indonesian palm oil, and Brazilian live cattle exports. We show that traders often source more than 40% of commodities “indirectly” via local intermediaries and that indirect sourcing is a major blind spot for sustainable sourcing initiatives. To eliminate deforestation, indirect sourcing must be included in sectoral initiatives, and landscape or jurisdictional approaches, which internalize indirect sourcing, must be scaled up.

Principles for using evidence to improve biodiversity impact mitigation by business

“…This applies for many measures relevant to business impact mitigation such as biodiversity offsets (zu Ermgassen et al 2019;Josefsson et al 2021). Similarly, whilst there are improvements in data availability, data on the localities and impact of sourcing in complex supply chains can be sparse, particularly when commodities are sourced indirectly (zu Ermgassen et al 2022a).…”

“…Similarly, whilst there are improvements in data availability, data on the localities and impact of sourcing in complex supply chains can be sparse. This is true even within the most well understood supply chains, such as agricultural commodities, particularly when commodities are sourced indirectly (zu Ermgassen, Bastos Lima, et al, 2022).…”

Sustainable swine feeding programs require the convergence of multiple dimensions of circular agriculture and food systems with One Health

“…Depending on the environmental impacts associated with using local feed ingredients, there may also be opportunities to feed diets with a lower environmental footprint to reduce overall environmental impacts of pig production ( de Quelen et al, 2021 ), while also minimizing the risk of introducing foreign animal diseases. However, commodity traders play a key role in feed ingredient supply chain governance to ensure biosafe and deforestation-free sourcing of feed ingredients because indirect feed ingredient sourcing through intermediaries is a major problem for sustainable sourcing initiatives ( zu Ermgassen et al, 2022 ).…”

To clear or not to clear: Unpacking soy farmers' decision-making on deforestation in Brazil's Cerrado

“…Tocantins farmers sell their grains to a range of traders, allegedly seeking whoever will "pay better" (see also Zu Ermgassen et al, 2022). Some of the commodity traders mentioned by the farmers in order of importance were: ALZ, Bunge, Agrex, Granol, Fazendão Agro, ADM, Agrextz, Frizia, CHS, Fiagril, Silo do Simiao, Matosul, and Priori.…”