Soy industry a laggard in "responsible" production

Soy industry a laggard in "responsible" production


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Only 3 percent or less of the world's soy supply is currently certified under one of the standards designed to promote more responsible production, according to a new paper published today by KPMG International – A Roadmap to Responsible Soy: approaches to increase certification and reduce risk. 

This means that soy lags far behind other commodities where levels of certified production are much higher. For example, 50 percent of non-farmed whitefish is now certified, 16 percent of coffee and 14 percent of global palm oil production.  

The KPMG paper is published in collaboration with the Sustainable Trade Initiative (IDH), WWF, FMO (the Netherlands Development Finance Company) and the International Finance Corporation (IFC). It is timed to coincide with the 8th International Conference on Responsible Soy (RT8) taking place in Beijing on May 28 and 29, 2013. 

Sean Gilbert, Director, Climate Change & Sustainability, KPMG China, says:  “As China is one of the world’s largest consumers and producers of soy, the stability and quality of global supply of soy will have significant implications for this market. As soy production continues to soar - driven by population growth and increasing wealth in the developing world - so do the industry’s environmental and social impacts, which makes a strong business case for the implementation of certification. The current low level of certified soy in the supply chain presents a risk to large-scale users of soy especially food producers and retailers. This will be moving up the agenda as consumers, the media, and civil society increasingly take interest in where their food comes from and how it is produced.” 

"Addressing the barriers to responsible soy production is not a job for soy producers alone. It needs a collaborative approach across the supply chain from producers and end-users, traders and processors, investors and certification bodies, and governments and consumers." 

A Roadmap to Responsible Soy, part of KPMG's Sustainable Insight series, identifies the barriers preventing growth in certified responsible soy production and presents an action plan to overcome them. 

The four key barriers are: 

  • Weak market demand for certified soy
  • Variable availability of certified soy
  • Fragmentation of the certification landscape
  • The cost of certification for soy farmers.  

Key actions recommended in the paper include: 

  • Increased commitment to certification by end users of soy including major food and retail brands
  • Greater collaboration between the many and various certification schemes to align their assessment criteria and processes, and improve mutual recognition
  • Financial support from soy processors to assist farmers in funding the up-front costs of certification
  • Greater demand from banks for certification as a pre-condition to providing finance to companies in the soy supply chain
  • More financial incentives for certification to be provided by governments, for example through their tax systems. 

The KPMG study, commissioned by IDH and co-funded by WWF, FMO and IFC, found that the average payback period for soy producers' investment in certification is only 3 years and, for larger, better prepared farmers, can be as little as 1 year. 

Gilbert concludes: "Given that end-user companies such as manufacturers of food, animal feed and biofuel, arguably face the greatest risks from slow progress towards certification, these companies should evaluate the issues and potential impacts, and develop a response strategy and plan of action." 


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About KPMG 

KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 156 countries and have 152,000 people working in member firms around the world.  The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such. 

KPMG China has 13 offices (including KPMG Advisory (China) Limited) in Beijing, Shenyang, Qingdao, Shanghai, Nanjing, Chengdu, Hangzhou, Fuzhou, Xiamen, Guangzhou, Shenzhen, Hong Kong and Macau, with around 9,000 

About RT8 (The 8th International Conference on Responsible Soy) 

The Round Table on Responsible Soy Association (RTRS) will convene its International Forum on Responsible Development of the Soybean industry, in Beijing, China, May 28-29, 2013 under the theme "Building Global Bridges for Responsible Soy." Sessions will cover such topics as the latest development in the soy production and trade in China, Chinese overseas investments in the soy sector, best practices for responsible expansion of soy, and the opportunities and challenges of building a global market for responsible soy.

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