Brazil farmers seek to boycott Danone for cutting out Brazilian soy

By Reuters

October 29, 20249:42 PM GMT+7

Rural workers operate harvesters during a record soybean harvest season in Brazil's southernmost state on a farm in Nao Me Toque, state of Rio Grande do Sul, Brazil, April 3, 2024. REUTERS/Diego Vara/File Photo Purchase Licensing Rights

SAO PAULO, Oct 29 (Reuters) - Brazilian soybean producers on Tuesday said there are reasons for farmers in the country to boycott Danone (DANO.PA), opens new tab after the French dairy giant said it had stopped sourcing soy from the South American agricultural powerhouse.

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 a "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 added.

Danone did not immediately respond to a request for comment.

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

Companies such as Nestle (NESN.S), opens new tab and Unilever (ULVR.L), opens new tab 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, opens new tab.

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.

Source: Reuter