Promotion of sustainable agriculture in the grain chain
EC8

AMAGGI acts in a determined way in defending and supporting the development of a more sustainable agriculture that respects the environment, people and the life of the communities, contributing to the social, environmental and economic development of the productive chain. In its Sustainability Directory the company has a core Responsible Management of the Grain Chain, which acts in the development of activities and projects with the objective of supporting a better socio-environmental performance of the rural producers, promoting a more sustainable agriculture, respecting the environment and the life of the communities where it operates, contributing to the social, environmental and economic development of the productive chain.

AMAGGI seeks to work in partnership with its grain suppliers, aiming to guide rural producers in the socio-environmental adjustments in their properties.

To ensure a responsible purchase, the company has Socio-Environmental Criteria to evaluate its grain suppliers, which are minimum sustainability principles to be met:

Areas embargoed by the Brazilian Institute for the Environment and Renewable Natural Resources (IBAMA): AMAGGI prohibits the sale of grains from areas that are on the list of embargoes for illegal deforestation;

Indigenous Lands and Conservation Units: the company does not commercialize with producers who have incident productive areas on Indigenous Lands and Conservation Units;

Deforested areas in the Amazon biome after 2008: through the Soybean Moratorium, AMAGGI undertakes not to acquire soybean from deforested areas after 2008 in the Amazonian biome. In 2016 the GTS, which brings together industry, civil society and government, has decided to keep this commitment indefinitely. Periodically, there is an analysis of Amazon deforested areas and the activities implemented there - if it is confirmed that the area is producing soybean, AMAGGI does not purchase the product.

In 2016 AMAGGI received an external audit, which analyzed the commercialization of the 2015/2016 harvest, as a way of proving the company's commitment to the Soybean Moratorium. It was attested that the company applies the control of its Social and Environmental Criteria, honoring its commitment;

Dirty List of Slave Labor of the Ministry of Labor and Employment: AMAGGI does not do business with any person or company that integrates the relation known as Dirty List of Slave Labor. In addition to accompanying the list update, AMAGGI signed the Pact for the Eradication of Slave Labor, which further strengthens the commitment. AMAGGI also integrates the InPacto, a partnership held to strengthen and expand the actions under the National Compact for the Eradication of Slave Labor.



At AMAGGI, 100% of the supply chain must meet these criteria. Suppliers that have any of these restrictions have their registration blocked, being prevented from commercializing with the company until they have their situation regularized. FP1

When a property is not automatically vetoed by the system, based on the socio-environmental criteria mentioned above, but there are still doubts regarding its regularity, AMAGGI carries out a risk analysis, through the Sustainability area. Last year the company had 45 commercializations vetoed by the Sustainability area, as they offer risks related to the Socio-Environmental Criteria adopted as principles for grain trading.

For producers commercializing in the form of advances on account of price, AMAGGI has a specific evaluation. In addition to evaluating the Socio-Environmental Criteria, AMAGGI branch local staff that has a direct relationship with the rural producer conducts on-site surveys on these properties, assessing various environmental, infrastructure, labor and social requirements, with the completion of a Socioenvironmental and Respective validation by the Sustainability team. It also analyzes the area of the property through satellite images, in order to ensure that the grain origin is from an area that meets the social-environmental criteria of the company. In 2016, 696 operations were analyzed in this way.


ORIGINAR - Responsible AMAGGI Origination Platform

As a way of combating illegal deforestation and encouraging sustainable agriculture, in 2016 AMAGGI made a major investment in the acquisition of a management and monitoring platform for its grain chain, known as ORIGINAR - Responsible AMAGGI Origination Platform, developed through Agro tools technology. Since then the company has been performing an enrichment of its grain supplier’s database by periodically surveying property locations and training its AMAGGI Commodities managers and buyers to use the platform. This tool makes it possible to analyze more precisely and in detail the areas with which the company commercializes, allowing the generation of a socioenvironmental extracts of the property and of the producer, which can be crossed with the data of its Social and Environmental Criteria. So, it is evaluated not only the register of the producer, but also the location of the property, avoiding the risk of acquiring grains from areas with restrictions.

Investments in this technology aim to improve the territorial management and the monitoring of the risks involved, allowing the visualization of the work done in the field and facilitating the interaction of the Sustainability area with AMAGGI subsidiaries. This gives the company more security in its decision-making, serving as a strategy tool for business and supporting a more responsible grain chain. In addition, the platform provides greater knowledge about the AMAGGI grain chain and, as such, allows to define new project and partnership strategies to assist the development of rural producers and to foster an even more responsible value chain.

AMAGGI Technology Circuit

In 2016 AMAGGI carried out, in partnership with eight companies supplying agricultural inputs, the first edition of AMAGGI Technological Circuit. Twenty-four events were held on partner producers rural properties in 21 municipalities in the States of Mato Grosso and Rondônia. The events had the participation of 1,838 people, being 483 rural producers responsible for 1,263,770 ha of soybean planting - which represents 15% of all planted area in Mato Grosso in the 2015/2016 harvest.

Besides being a powerful tool of relationship with the rural producer - one of the main AMAGGI business partners -, the Technological Circuit was born with the mission of sharing knowledge. Its proposal is to spread new technologies and good agricultural practices, which allows to increase the production, and also to engage the rural producer in the adoption of good practices of management and socioenvironmental responsibility.

For 2017 the AMAGGI Technological Circuit is expected to reach around 2,000 participants, in addition to expanding the number of locations covered.

Learn more about the project on Contato Magazine - issue 18.



Partnerships for the sustainable development of rural producers

AMAGGI performs numerous initiatives and partnerships dedicated to supporting sustainable agriculture and curbing illegal deforestation, seeking to foster a responsible supply chain.

Currently the company maintains partnerships with ONGs such as The Nature Conservancy, Ipam and Earth Innovation Institute, which aim to stimulate the development of rural producers in areas such as forest restoration, local community development and adhesion to the Rural Environmental Register of the federal government, essential step for good environmental governance in Brazil.

In 2016, in partnership with The Nature Conservancy, a Strategic Forest Restoration Plan for Mato Grosso was developed with the objective of strengthening the chain of restoration and its capacity to meet expected demand for inputs and technical advice in the context of Agenda post-Rural Environmental Register. The project promotes land use planning and the development of a sustainable landscape model with greater use of better agricultural practices in the municipalities of Brasnorte, Campos de Júlio, Feliz Natal, Nova Mutum, Nova Ubiratã, Lucas do Rio Verde, Sapezal, Smile and Tapurah.

With Ipam AMAGGI develops the Sustainable + Landscapes Querência project, whose objective is to catalyze social, economic and environmental benefits for the municipality of Querência, improving the sustainability not only of soybean but also of other agricultural activities. Since 2016 the project has carried out interventions on three thematic fronts: strengthening local socio-environmental governance; support the implementation of a local compact for sustainable territory through a multi-sectoral forum; and evaluation and promotion of the best opportunities for family farmers and settlers.

Already with Earth Innovation, AMAGGI supports the project to develop and apply mechanisms to measure the territorial performance of municipalities with significant socio-environmental risk and important impact on soybean and meat supply chains. It includes 10 municipalities in the Xingu-Araguaia region (Alto Boa Vista, Bom Jesus do Araguaia, Canarana, Canabrava do Norte, Gaúcha do Norte, Porto Alegre Norte, Querência, Ribeirão Cascalheira, São Felix do Araguaia and São José do Xingu), where it occurs 20% of all deforestation in the Amazon area inside Mato Grosso. The current situation of these municipalities is being evaluated by the perspective of reputational, operational and financial risks in the commercial, financial and industrial operations fulfilled. Detailed identification and assessment of risk elements are the basis for discussions in regional forums, which will result in the planning and implementation of coordinated interventions in each municipality in order to reduce identified risk.

Rural socio-environmental certifications

In order to affirm its commitment to sustainable development of the grain chain, AMAGGI has certifications that meet social and environmental criteria and quality. The purpose of these certifications is to offer a path for a more responsible production, meeting the market and society's demands and trends for a differentiated product, and enabling rural producers to improve their property management, better agricultural practices, with consequent risk minimization of environmental and labor risks.

The certifications encourage a better socio-environmental and economic performance of the agribusiness sector, contributing to the conservation of natural resources, as well as providing fair conditions and welfare for workers and communities nearby the property. AMAGGI ended 2016 with 470 certified rural properties, 46 certified by A.R.S., 35 by RTRS and 389 by ProTerra.

AMAGGI Responsible Soybean Standard (A.R.S.)

In order to work and stimulate the socio-environmental management culture with its grain suppliers, AMAGGI has launched its own certification standard, A.R.S., recognized by the Federation of European Food Manufacturers (Fefac).

The A.R.S. is a result of the company's knowledge of implementing internationally recognized certifications, with guidelines for internal standards and AMAGGI institutional commitments, in addition to the requirements established by national and international clients and institutions.

The A.R.S. in producer groups was started in 2016, through a partnership between André and Lucia Maggi Foundation and Aliança da Terra (Earth Alliance) organization. Up to date the company has certified 46 partner farms. The expectation is that A.R.S. stimulates a socioenvironmental management culture in rural properties, helping farmers take the first steps in this area and prepare for international certifications, as well as providing other benefits of good practices in sustainable agriculture, such as the development of surrounding communities. Initially, the work with producers involved the following municipalities of Mato Grosso: Alto Paraguay, Diamantino, Itiquira, Nobres, Nortelândia, Nova Maringá, Paranatinga, Primavera do Leste, Itiquira, Rondonópolis and São José do Rio Claro. The 46 certified rural properties have more than 156 thousand ha of total area, resulting in 213 thousand t of A.R.S. certified soybean.

All producers who participated in the certification process received, through a partnership with Aliança da Terra ONG, all technical support necessary for the certification process, including socio-environmental diagnosis of their properties, guidelines for compliance with legal requirements and meeting A.R.S. socio-environmental criteria. All properties underwent an internal audit process, and there was also external audit with sample methodology.

Round Table on Responsible Soybean (RTRS)

The RTRS was developed with the participation of various interested parties, organized into three interest groups: Producers; Industry, Commerce and Finance; and Civil Society.

AMAGGI was the first company in the world to achieve this certification in 2012 and maintains its active and growing participation in the search for continuous improvement. The international RTRS certification has gained prominence in the soybean market, with growth in certified and marketed volumes, in response to the growing demand in the European market.

To be certified by the RTRS, the property must follow a grid of 106 indicators, divided into 5 principles: legal compliance and good practices; responsible working conditions; responsible relationship with the community; environmental responsibility; and good agricultural practices. The new RTRS standard, V3.0, approved at the 2016 assembly, does not allow certifying areas where there has been deforestation after 2008, guaranteeing customers zero deforestation on certified properties. Differentials such as this make RTRS a certification with growing demand by the market, standing out in the responsible soybean market.

In 2016 AMAGGI was responsible for the certification of 30% of RTRS soybean (physical modality and credit) worldwide. AMAGGI Agro certified 383 thousand t of soybean in book and claim, in the Tucunaré, Tanguro and Itamarati farms. Meanwhile, AMAGGI Commodities certified 290,000 t of soybean mass balance and 149,000 t of soybean book and claim from 35 partner farms6 . Also in the scope of certification there are 16 warehouses, 5 port terminals, 2 in Porto Velho, Itacoatiara, Grain Terminal of Guarujá (TGG) and Miritituba-Barcarena Complex, and 2 soybean crushers located in Lucas do Rio Verde and Itacoatiara.

Still in 2016 AMAGGI evolved in the inventory of its CO2 emissions, and included the calculation of actual, non-estimated data, associated with the soybean production of RTRS certified producers in its value chain. For 2017 the expectation is to evaluate the evolution of this data in order to study joint actions and initiatives to improve emissions management.

6 The expressions book and claim and mass balance refer to technical issues related to the RTRS soybean chain standard. To learn more, visit www.responsablesoy.org.

ProTerra Standard

The purpose of the ProTerra Standard is to encourage good agricultural practices, the protection of biodiversity in general, of rural workers and communities, by establishing a link between production and demand for non-GMO products with full traceability.

Audits carried out on own farms and on those from suppliers, warehouses, ports and factories, verified compliance with legislation and if quality control is maintained, ensuring that the grain is not transgenic. For this purpose the entire soybean production chain is evaluated, from cultivation to handling and transportation.

In 2016 AMAGGI ProTerra certification involved its own farms (Itamarati, Tanguro, Tucunaré and Agua Quente); the warehouses in Brasnorte, Campos de Júlio, Campo Novo do Parecis and Sapezal; the ports of Itacoatiara and Porto Velho, and the overwhelming in Itacoatiara. Certification reached approximately 400 rural producers, which totaled 981 thousand t of non-GM soybean.

Denofa, AMAGGI soybean crusher in Norway, is a reference throughout Europe for the processing of non-transgenic soybean and is one of the main destinations for ProTerra certified products.