Story Publication logo February 17, 2020

China Wants Food. Brazil Pays the Price.


Image by Heriberto Araújo. Brazil, 2019.

As the world's largest consumer of soy, China's hunger drives Brazil's sales. How the Amazon fits...

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Soy fields have replaced Amazon jungle along many stretches of BR-163, a highway that runs from the interior to a tributary of the Amazon River. Brazilian Big Ag would like to see a railway, called the Ferrogrão, constructed along the same path to increase food exports to the world. Image by Heriberto Araújo. Brazil, 2019.
Soy fields have replaced Amazon jungle along many stretches of BR-163, a highway that runs from the interior to a tributary of the Amazon River. Brazilian Big Ag would like to see a railway, called the Ferrogrão, constructed along the same path to increase food exports to the world. Image by Heriberto Araújo. Brazil, 2019.

The Amazon tends to evoke an Edenic vision—of a mysterious and impenetrable land, pregnant with beasts from jaguars to anacondas, rich with undiscovered flora. But parts of it are incongruous with this reputation, where big rig trucks rumble past dilapidated, grime-covered gas stations, and where land once thick with brambly trees and the promise of jungle adventure has become cattle pasture or soy field.

We are traveling on a road unimaginatively named BR-163. Pull up Google Maps and zoom in to the state of Mato Grosso, and find the thin strand of highway wending up across the state.  Branching out are perpendicular brown lines, all of them unmistakably cleared land, cutting into and contrasting with the dark green forest. This highway is where agriculture and the Amazon jungle meet.

The rain forest here in Brazil has progressively fallen victim to global demand for soy and beef. And the country's biggest customer for both is China. The story of the Amazon has become entangled not simply with the story of Brazil's poor protection of its forest frontier but also with that of the rise of this new superpower and its food-security strategy. Soy is China's weak link, the main food commodity it needs from the outside world. The country imports the crop, which it mostly uses to feed its pigs, and Chinese state-owned companies also invest directly in Brazil's supply chain so the South American country can increase its own exports. This growing hunger for soy has incentivized Brazilian prospectors to keep pace by razing pristine jungle, thereby accelerating deforestation.

This dynamic highlights some of the tensions inherent in the challenge of combatting climate change. China's middle class has a growing hunger for meat, leading to a rise in demand for soy. For a country that has pledged to honor the Paris Agreement, China's food-security measures run counter to its environmental efforts, yet while the climate deal aims to reduce national carbon emissions, it doesn't account for the activities and responsibilities of signatories in other countries. And Brazil's president, Jair Bolsonaro, argues that the country must prioritize economic growth, even if it comes at the cost of destroying the planet's largest tropical rain forest.

Sinop, a prosperous community of 140,000 in northern Mato Grosso and a hub of industrial agriculture, epitomizes this transformation. The place is in a scrappy developmental stage—Burger King held its grand opening here recently, and a McDonald's is on its way—but is also an advanced economy with paved, gated communities of millionaire farmers' homes built to tasteful, mid-century-modern designs. Along with the soy and cattle, a sprawling city has displaced lush jungle, butting right up against the wilderness, and the residents are proud of it.

"We are champions of soy and cattle," Daniel Brolese brags. China's "demand is what reassures farmers here." Brolese, the deputy mayor for economic affairs, drives us through the streets, pointing out private tennis and beach-volleyball courts. On the driveways sit luxury cars, from a Corvette Stingray to a Porsche Cayenne. Periodically, he pauses his tour to focus on a new project he says would catapult Sinop further, and help push more exports to China. "Ferrogrão," he says, "is no question important to development."

He's referring to a railway that producers have long dreamed of: Ferrogrão—the "grain train," in Portuguese—would transport soy from the Amazon's interior to its northern river ports along the Tapajós River and then to the Atlantic Ocean. Long desired by agribusinesses and officials here, the project never had the political and financial capital necessary from the federal government to move forward—opponents argued that it cost too much and benefited too few. But two things have come together that might finally make Ferrogrão a reality: Bolsonaro's election, and China.

Bolsonaro's first year in power has been characterized by rewards for some of his biggest campaign backers in Big Ag. Like Donald Trump, the populist Brazilian leader swept to power in part with the support of the farm lobby, and Bolsonaro appears to view the environment primarily as a resource, pointing to the hypocrisy of developed countries' own histories to justify his strategy in the Amazon. He has dismantled environmental-protection laws, replaced dozens of Environment Ministry officials with political cronies, and drastically cut the budget for law enforcement in the jungle. He has accused the indigenous groups who are working to preserve the Amazon of holding broader economic prosperity hostage. Tribes we met along our journey told us they are bracing for battle. In the eyes of environmentalists, Bolsonaro's presidency has literally fueled deforestation—they blame his laissez-faire permissiveness for last summer's extraordinary fires. December saw a 183 percent spike in the rate of deforestation compared to the same month a year prior.

In one of the most tangible displays of his priorities, Bolsonaro sent the army to the Amazon to complete construction of BR-163, once a jammed and muddy dirt highway. In a country used to waiting endlessly for government pledges to deliver, Bolsonaro completed the job in a few months. For people here, it has been a milestone: "Bolsonaro is the best president!" crows our driver as he tears down the freshly paved road at high speed.

BR-163 is also right where China sees an opportunity for its Belt and Road Initiative (BRI). The global infrastructure-development strategy envisions an international network of railways, ports, energy pipelines, and other megaprojects connecting Beijing's economy to the world. Backed by financing from Chinese state-owned banks, more than 60 countries have committed to or expressed interest in participating. Brazil already has two BRI-designated deals, both in the Amazon: a high-voltage transmission system to distribute energy from the Belo Monte Dam, and an expansion of the São Luís port. Ferrogrão could be the third.

Physically paralleling BR-163, the railway project would reduce transport costs by 40 percent and shave weeks off delivery dates, making Brazil more competitive against its chief soy rival, the United States. But at an estimated cost of $3.1 billion, Brazil has struggled to find investors. The Bolsonaro administration now says it has the money, suggesting that some of it would come from Saudi Arabia's sovereign wealth fund, and also from China, which pledged $100 billion to Brazilian infrastructure and agribusiness projects during a November meeting of the BRICS group—Brazil, Russia, India, China, and South Africa. Additionally, Chinese state-owned companies, which have undertaken similar projects in parts of Africa and Asia, have shown interest in Ferrogrão, with three of them indicating that they would bid for railway construction contracts. Brazil plans to start the auction process this year.

Beijing's brand of state-driven capitalism means it has a national strategy for every industry, and its most recent five-year plan emphasizes achieving "basic self-sufficiency" in grains and "absolute food security." While China has had success improving domestic production of rice, wheat, and other staples, it still relies on soy imports to feed its hog population, which constitutes half the world's swine. Chinese love pork. It is their preferred meat, from siu mai dim sum and sweet-and-sour pork to whole roast suckling pig—so much so that the Chinese Communist Party maintains a strategic pork reserve, akin to the U.S.'s own Strategic Petroleum Reserve, to ensure a steady supply. Shortages of pork as a result of last year's swine fever, which led to a mass cull, have put Beijing on the defensive.

If China could, it would plant its own soy. The protein-rich grain is critical to fattening up pigs, but it takes some 1,500 tons of water to produce one ton of soybeans, and the country has inadequate sources of water to fill the need. China "will never be self-sufficient in soybeans," says Michael Cordonnier, president of Soybean & Corn Advisor, a consulting firm in Illinois. "There is no way they can produce enough to meet their demand."

So the country must buy it. Before Trump launched his trade war against Beijing, China had relied on American soy. Their recent trade deal will put soy sales back on track—but between Trump and Bolsonaro, the Chinese now see the latter as a more preferable and dependable partner. Deal or no deal, Beijing is shifting to Brazil, where it now buys 70 to 80 percent of its soy. China's largest food-processing company has 7,500 employees in the South American nation, with plans for further expansion.

Technically, soy cultivation should not drive deforestation of the Amazon, because of the "soy moratorium," a deal brokered between Greenpeace, the Brazilian government, and agribusinesses more than a decade ago, when buyers pledged not to buy soy grown on newly deforested land. For a while, the pact led to a significant dip in the rate of deforestation.

But prospectors capitalized on weak rule-of-law and environmental-policy enforcement to find a creative way to continue profiting: First they'd raze trees to make way for cattle, and then, after a few years using the fields as pastureland, they would convert them to grow soy. Strictly speaking, the land would no longer be "newly harvested," and the soy moratorium would hold. Even agribusinesses that are committed to the moratorium struggle with accountability when collecting information. The raising of cattle is now officially the biggest driver of deforestation in the Amazon, both because there is genuine increasing international demand for beef and because developers are planning for eventual soy development.

Even if Brazil's government and producers increase soy production, they will still need to overcome logistical bottlenecks. This is why Ferrogrão is crucial. The train would open up a new northern transport route, terminating along the Tapajós, a tributary of the Amazon River. This would allow for the expansion and movement of 40 million additional tons of crop for China, Europe, and other markets by 2050. Together with the São Luís port overhaul and five other major ports that are either new or being expanded, the objective of the "Northern Arc," as the route is known here, is to harness the might of the Amazon River system, the largest in the world. Brazil's minister of infrastructure, Tarcísio Gomes de Freitas, who has called Ferrogrão a game changer for agribusiness, told us there was no cause for concern, that new infrastructure can be "sustainable" and will be built "without clearing a single tree."

Still, the ambitious plan worries environmentalists and indigenous tribes living on Amazon reservations. Ferrogrão's path would also cut through a national park. Official data show that while the rate of deforestation has ebbed in certain years, the overall picture is one of continued diminishment of the Amazon. Eradicating illegal logging in the Amazon by 2030, a pledge once made by Brazil to combat climate change, now looks like a precarious promise under the Bolsonaro administration.

China is not the only actor in this situation. Brazilian agribusinesses have long operated in the Amazon, and the American agricultural giant Cargill runs its largest non-U.S. operations here and wants to see Ferrogrão built. The company's head of port operations, Clythio Backx Van Buggenhout, told us the railway would be "a great leap forward in agribusiness logistics."

But China is still Brazil's biggest trading partner, buying not only the majority of its soy but also half of its beef exports. In tandem with Beijing's food-security strategy and its infrastructure plans, its outsize impact on the Amazon merits careful examination and accounting. Thus far, China has stayed silent, including during this past summer's fires. When asked about China's role in the destruction of the Amazon, however indirect, Foreign Ministry spokesman Geng Shuang only said, "The correlation is new to me." The Chinese embassy in Brazil did not respond to our requests for comment.

With so many powerful players, front-line defenders of the Amazon look paltry and powerless by comparison.

Dôto Takakire is one of them. A leader of the indigenous Kayapó tribe, a group with special protected status and ownership of a swath of the Amazon close to Ferrogrão's projected path, he has spent most of his life fighting encroachment on his people's territory. He believes Beijing is the only player with real leverage over Bolsonaro. "China should stop this," Dôto says. "China should say to Bolsonaro, 'We'll only buy if you respect what has been preserved in the indigenous reservations and in the Amazon forest, as established by the law.'"

And if China doesn't? "We won't stop fighting," he says.

Around the world, environmentalists and governments dedicated to combatting the climate emergency might root for such crusaders. Yet speaking to him in the heart of the Amazon only underscores how far away and abstract that global community feels, and how lonely and small he and his people are as they face the giants of the Amazon.