Soy: What you need to know about this challenging crop

Can a “hidden” commodity have a sustainable future?

It’s the protein at the heart of the global food system. But most people are hardly aware of how much soy they eat – and where it comes from. Why is soy such an essential crop? And what’s being done to make sure it’s grown responsibly?

We’re all familiar with soy. There are varieties aplenty: from vibrant green edamame beans (eaten straight from the pod) to tofu and tempeh. There are soy burgers, “meatballs,” soy sauce and, of course, that soy latte from your favorite coffee joint.

And yet, most of the soy we consume is invisible. You’re not likely to read on the packaging of a supermarket steak that a cow has been fed up to five kilos of soy to produce one kilo of meat for you to enjoy.

Europeans unwittingly consume roughly 60 kilos of soy a year through eating chicken, beef, fish, eggs and dairy products. Around 75 to 80 percent of the soy produced worldwide is used by the animal feed industry.

Land demand

This “hidden” commodity also comes at a cost that’s as invisible as the product itself. The growing demand for meat and dairy worldwide has almost tripled the amount of land used for soybean production since the early 1990s. The soybeans produced in Europe in the Danube Region yield only a fraction of the total amount of soy consumed by all Europeans. The bulk of production is concentrated in South America, using around 114 million hectares of agricultural land. That’s an area the size of France, Germany, Belgium and the Netherlands combined. Globally, the soy industry takes up more than 120 million hectares and produces a total of around 350 million tons of beans each year.

Approximately one-third of that yield is earmarked for export, with China as the largest market, importing more than 90 million tons a year. Europe purchases between 30 and 35 million tons on an annual basis. The Netherlands is the second-largest single soy importer in the world, accounting for 8 million tons, most of which is processed and further traded abroad.

Demand for soy is not likely to abate any time soon: global population growth and economic development have spurred a growing appetite for meat – and, in turn, a demand for animal feed.

The environmental toll

It’s clear: collectively, we consume a huge amount of soy. But why, exactly, is this a problem? The soybean industry is the second-largest agricultural driver of deforestation worldwide, after beef production. Most of this ever-expanding production takes place on former woodland or savannas (mixed woodland and grassland).

Rainforests and other natural ecosystems are being converted into farmland, a threat that affects not just the Amazon. The Cerrado, South America’s vast tropical savanna ecosystem – home to around 5 percent of all animal and plant species – has likewise been decimated. Roughly half of the Cerrado has been converted into agricultural land since the mid-twentieth century, destroying the habitats of thousands of native species in the process.

A short documentary with perspectives from a Brazilian soy farmer, a Rabobank sustainability specialist, the Round Table on Responsible Soy, and the World Wildlife Fund


Land conversion in the Cerrado and other areas has huge repercussions. Indigenous peoples are being dispossessed of ancestral lands; animal and plant species are being pushed toward extinction; soil are becoming degraded; and clean water sources are disappearing. But the impact extends beyond the South American continent alone: the forests of the Amazon and the Cerrado play an important role in regulating the Earth’s climate. The trees in these regions store a colossal amount of carbon, equivalent to more than a decade’s worth of global greenhouse gas emissions. Deforestation causes carbon to be released into the atmosphere, where it contributes to global warming.

A meaty question

Besides the environmental impacts of the soy industry, working conditions often also fall short of labor standards. The International Union for Conservation of Nature (IUCN) reports that laborers in several plantations in Brazil have effectively been enslaved, while others are exposed to excessive amounts of harmful pesticides.

The situation, it appears, is unsustainable. The industry needs to be overhauled. But where do we start?

While it would, of course, help if we collectively cut down on our consumption of meat products, this “solution” is not realistic – at least not in the foreseeable future. Demand for meat and dairy products continues to rise, and it looks like an unstoppable trend for the time being. This is not to offer a license for unchecked meat consumption: the issue of animal welfare notwithstanding, if you’re after protein, it is vastly more efficient to purchase soy products than eat animals that consumed many times that quantity of soy.

The efficient protein

This raises the question: is there a better alternative? Could we find a substitute for the soy contained in animal feed? As Robert Hoste, a Senior Pig Production Economist at Wageningen Economic Research, explains: an alternative at this scale is not readily available. Besides, soy is a food rich in protein and fat that efficiently meets the nutritional needs of young animals. “The amino acids found in soy make it just about the perfect food for them. And the same goes for human beings, since, from a physiological standpoint, we’re not all that different from pigs.”

“The amino acids in soy make it perfect for pigs – and humans”

- Robert Hoste, Wageningen Economic Research

He acknowledges that there are numerous other legumes available throughout the world. However: “They don’t quite measure up to soy as far as their ingredients are concerned. We’d be losing out quite a bit in terms efficiency if we were to switch to an alternative.” He adds: “Besides, it’s a bit of a non-starter, since we’d have to find agricultural land for those other crops as well.”

Richard Piechocki, Head of Sustainability in Rabobank’s Trade and Commodity Finance department, concurs: “There’s nothing wrong with the actual bean – soy happens to be a stellar product. The issue is that the crop is so successful that it’s taking a toll on the environment.”

The key, he believes, is improving sustainability standards across the industry as a whole. But what criteria does soy have to meet in order to qualify as “sustainable”?

Certified soy

That’s a tough question, says Jochem Bouwmeester, a Director at Rabobank Corporate Finance with a focus on food and agriculture. If you want to produce environmentally friendly soy, says Bouwmeester, you need to “start shopping around for a certificate that aligns with your values.” It turns out there are plenty of certificates to choose from: the FEFAC, the European Feed Manufacturers’ Federation, lists a variety of quality labels, with varying degrees of ambition.

On the one end of the spectrum there are certificates whose main requirement is that “farmers comply with local regulations.” Then, on the other end, the Round Table on Responsible Soy (RTRS) certification, which is generally regarded as the most stringent in terms of the regulations imposed. RTRS certification it the best possible guarantee that a farmer’s production process is sustainable from a social, environmental and economic point of view. As Piechocki puts it: “Genuinely sustainable policies begin where the law ends.”

“Genuinely sustainable policies begin where the law ends”

- Richard Piechocki, Rabobank

Apart from the principal guarantee of the RTRS certificate that cultivation is does not require logging, the organization also sets standards for labor conditions, the use of pesticides and soil protection.

However, the share of RTRS-certified soy remains negligible to date: 4 million tons (the equivalent of around one percent of all soy production) bears the RTRS label, nearly one-third of which is purchased by the Netherlands.

Can sustainable soy production be realistically combined with the required increase in output? According to Bouwmeester, this is certainly the case: “Although it does mean you will need to start managing the soil differently. There are currently large swathes of undeveloped land or grassland that would be perfect for soy production. Crop rotation is another essential element: it keeps the soil healthy and boosts production. You could grow soy one season, for example, followed by corn the next.”

A demand-side challenge

The RTRS was established in 2006. Piechocki: “One multinational after another – including McDonald’s and Ahold – demanded a deforestation-free supply chain. But when farmers began selling the first batches of certified soy after a few years, demand turned out to be underwhelming. Many companies simply refused to pay a premium. Those multinationals all said they wanted nothing to do with logging, but they were not willing to pay a few extra dollars on top of the regular price.”

Twenty-two percent of all the soy used in Europe complies with the – relatively liberal – guidelines of the FEFAC, with only 13 percent produced on land that is protected from deforestation.

Piechocki reasons that, if all parties concerned had embraced sustainable soy and had been willing to pay the higher price that comes with it, the entire industry would have been sustainable and free from deforestation. “It is the most basic economic principle: supply follows demand.”

“The whole supply chain will need to chip in for sustainable soy”

- Richard Piechocki, Rabobank

The sustainability strategist believes we are all to blame to some extent: “Just put yourself in the farmers’ shoes for a minute. The likes of Brazil, Argentina and Paraguay are currently home to around 110 million hectares of forest – roughly commensurate with the land currently used for soy production in South America – that can still be legally felled, in full compliance with local laws.”

Piechocki: “The logging represents extra revenues for them from the sale of timber, plus there’s the increase in output. We can’t expect them to leave the forest intact without buyers giving them something in return. The whole supply chain will need to chip in for the effort to be successful.”

Ecosystem economics

Bouwmeester references the recent campaign against palm oil: “They showed a few heart-wrenching videos of orangutans, and all of a sudden everyone seemed prepared to pay 10 cents more for fair-trade, sustainable chocolate bars.” The case of soy, however, is more complex, precisely because its origins are generally not stated on the packaging. Consumers have no way of knowing if the chicken they buy at the grocery store was fed “good” or “bad” soy.

So what role can an organization such as Rabobank play? For one: it can nudge the industry in the right direction by providing loans exclusively to, and sharing knowledge with, sustainable farmers or farmers who are willing to adopt sustainable practices. It is also important to be aware of the various gradations of “certified farming,” as some companies may have received a label that satisfies the FEFAC guidelines, yet still continue to engage in deforestation.

The next step, according to Piechocki, is to turn natural ecosystems into commodities with economic value. “Farmers currently tend to regard the rainforest as valuable mainly from the time the first tree is cut down. How can we make sure that preserving the forest pays off for them?”

“How can we make sure that preserving the forest pays off for farmers?”

- Richard Piechocki, Rabobank

Incentivizing sustainability

This may, in fact, be at the heart of the soy issue: farmers must be offered an incentive to leave the Amazon and Cerrado regions intact.

Rabobank and the United Nations Environment Programme (UN Environment) jointly launched the AGRI3 fund, which will cater to farmers who have shown a commitment to deforestation-free agriculture, sustainable production and improved standards of living for the local population.

Piechocki: “Farmers can apply for support from the fund if, say, they are helping with the restoration of a nature preserve. We are also exploring ways of enhancing the value of woodland. One option is to award farmers ‘carbon credits’ or carbon rights for the forest they leave untouched. They can then sell those rights to others that produce excessive carbon emissions.”

Still, this is a case of collective responsibility: everyone – including brokers, distributors, retailers and consumers – must be willing to pay a little extra for sustainable soy. Bouwmeester: “It’s really not all that hard. Lidl, for example, a discount grocery chain, recently began purchasing large numbers of RTRS certificates. Surely if they can do it, so can other multinationals.”