Brazil farmers, government slam Danone for cutting out Brazilian soy

Brazilian soybean producers on Tuesday said there is good reason for products of Danone to be boycotted after the French dairy giant said it would stop sourcing soy from Brazil, while the Brazilian government criticized "unreasonable" moves by European companies.

Danone's finance chief told Reuters last week that the company was instead buying soybeans from countries in Asia, ahead of a European Union rule requiring companies to prove they are not sourcing from deforested land.

Aprosoja Brasil, a group representing farmers in the world's largest soybean producer and exporter, said in a statement that Danone's move showed "lack of knowledge" of Brazil's production process and was "discrimination against the country."

"There is no doubt that Brazilian producers, tired of being unfairly singled out as villains, will start to have more than enough reasons to put Danone and other global brands on the list of companies to be boycotted in Brazil," the group said.

Brazil's agriculture ministry in a separate statement listed the country's environmental efforts and called the EU legislation "arbitrary, unilateral and punitive," while also criticizing companies.

"Brazil is ready to cooperate, but demands to be treated with the fairness and balance that guide international trade," the statement said. "Untimely and unreasonable stances as announced by European companies with a strong presence in the Brazilian market must be rejected."

Danone's Brazilian unit said in a statement that it continues to buy Brazilian soybeans that meet local and international regulations. The firm's headquarters did not immediately return a request for comment.

The EU Deforestation Regulation, covering imports of commodities like cocoa, coffee and soy, is scheduled to come into effect on Dec. 30, though the EU Commission this month proposed a 12-month delay.

Companies such as Nestle and Unilever have been gearing up to meet the new regulation before they face potential fines of up to 20% of turnover.

Brazilian law states that farmers must preserve between 20% and 80% of legal reserves, depending on the biome where they are planting. But rainforest destruction rates in the country remain high despite a drop under President Luiz Inacio Lula da Silva.

While major traders have vowed to stop sourcing soybeans from newly cleared land in the Amazon rainforest, soy farming continues to be a major driver of deforestation in the nearby Cerrado savanna.

Aprosoja said that "although there is deforestation, there is also a lot of natural regeneration."

The group suggested that Brazil's government could file complaints before the World Trade Organization and look for "compensation measures" from the EU as Brazilian farmers are now facing losses due to the European legislation.