Case Study: Soy Beans’ Impact on the World
Case Study: Soy Beans’ Impact on the World


Whether sprayed in pesticides, traded in futures markets, processed into biofuels, added into thousands of industrial products, or eaten as tofu, edamame, or animal feed, the soybean is one of the most ubiquitous commodities worldwide. Globalization’s impact on the soybean and soybean’s impact on the world is hard to fathom for those who are unaware of the widespread use and multitude of forms the small bean has taken in today’s world.

Considered the world’s foremost source of protein and oil, soy products have been touted as the miracle cure for solving the world’s problems and, at the same time, have been vociferously condemned because of potential side effects and negative properties that it may contain, and pass on to those who consume it.

Originally discovered and farmed in China more than 5,000 years ago, the soybean traveled across Asia, Europe, and eventually reached the Americas, where it became a staple product and food source in every stop along the way. During World War II, it became a popular source of oil and protein, when both were scarce to find amongst allied countries. It quickly became a profitable export crop; growers organized and formed associations to facilitate the international trade of soy products.1

Global Trade and International Investment

Top soybean consumers and exporters include the United States, Brazil, Argentina, and China.2 These countries process soy into a myriad of products, but also export it and import it as needed to fulfill other needs (such as animal feed). The European Union (EU) is the world’s largest importer of soybean meal and second-largest importer of soybeans, although the EU is self-sufficient in vegetable oil production.3

China’s appetite for soybeans has heavily influenced soybean production worldwide. Multinationals, often in partnership with local companies, have been focusing their production in new plants found near the coasts. Domestic production is often found in Northeastern provinces; although many are investing and relocating to the coasts as well. China seeks to become the principle base for soy meal exports to Asia.4

Currently, imported soy is cheaper than domestic Chinese soy, which is why the multinationals in China choose to import soybeans. A Chinese national and regional soybean association has been formed and has called for restrictions of foreign investment in storing and processing facilities. Despite China’s desire to become self-sufficient in its soy production needs, it recently signed a US$118.5 million commercial agreement with Argentina on food products trade, including soybean oil.5

On another front, Soybean farmers around the world are being impacted by international financial crisis. Many are cutting back on fertilizers. Others are turning to multinational agricultural processors for loans and operating capital.6 These trends might lead to even further consolidation of the industry into the hands of a few major players.

The Food Industry

The agrifood business is concentrated in the hands of a few major multinational corporations, whose reach penetrated the developing world in the 1980s and 1990s. In the 1980s, biotechnology revolutionized the agribusiness industry. These firms lobbied for patents for their products. Subsequently the WTO required countries in accession to accept the patents.7 Raj Patel, author of Stuffed and Starved, notes that there are ten companies worldwide that control half of the world’s seed supply; there are also ten firms that control the eighty-four percent of the $30 billion dollar pesticide market.8

For example, in Brazil, traditionally, national companies and cooperatives farmed products for domestic staple production, while multinationals mainly farmed for middle class consumption and for international trade. Three main domestic firms (Ceval, Sadia, and Perdigão) produced soybeans for animal feed. However, deregulation in 1990s brought in foreign multinationals (Bunge, Cargill, ADM, and Dreyfus) who replaced the domestic producers. These multinationals control the pesticides market in Brazil and worldwide, a crucial component of the oil seed production. Their dominance in Brazil coincided with the biotech revolution, as the companies were allowed to introduce genetically modified (GMO) seeds, thus furthering their competitive advantage.9

GMO Debates

Soybeans were one of the first commercially successful GMO crops. Industry experts have been working on making hydrogenated soybean oil healthier so that it can compete with oils that have no trans-fats, such as canola oil. A 2006 USDA ruling to label the amount of trans-fats in a product has further prompted the industry to research healthier options.10

Industry experts are also looking into lengthening soy bean oil’s shelf life and to making its oil better withstand high heats. New versions of soybean oil with low linolenic acid or with high oleic acid will help achieve many of above goals. U.S. producers are expected to triple production of low linolenic soybean oil by 2010 and will soon start field testing the high oleic acids beans.11 Soybean oil used to be the largest form of vegetable oil worldwide until 2005, when it was overtaken by palm oil.12

There is much debate and disagreement over the planting and use of genetically modified (GMO) soybean plants to be used in food products. About 95 percent of U.S. soybeans are Roundup Ready soybeans, which have been modified to be more effective with Monsanto’s Roundup fertilizers in protecting the plant from diseases and weeds. Some countries that plant the Roundup Ready soybeans are requesting non-biotech varieties and are willing to pay a premium for these varieties,13 especially since there is strong EU preference for non-GMO products.

The European Union has admitted that Roundup Ready soybeans are scientifically sound.14 However, regulators recently found a miniscule amount of unapproved biotech corn events in soy meal from U.S. soybeans. Under Europe’s zero tolerance policy, Europe stopped the import of 200,000 mt of soy meal from the U.S.15

One of the unapproved biotech corn events has actually been found safe by the European Food Authority, but is not yet approved by the EU Council or Commission. The EU’s food and feed industry associations have been urging a higher threshold for unapproved biotech events, especially because the policy is harming EU animal feeding industry, which will face dire problem if the U.S. soybeans are not imported. Most players believe that a compromise will be reached.16

The Energy Industry

Soybean oil is the primary raw material for US biodiesel.17 During the early 2000’s, the biofuel market was really “hot” as oil prices rose, making biofuel, a viable option. However, as the global economy has slumped and the cost of petroleum oil has decreased, the biofuel market is in jeopardy.

One 2008 article notes,” A year ago, alternative fuels promised an economic, environmental and energy revolution – a homegrown solution to dependence on Middle Eastern oil. But today the biodiesel industry is in the dumps.”18 During 2008, the price of soybeans soared, making soybean oil quite expensive; federal subsidies were needed to stabilize prices. Oddly enough, most U.S. soybean oil used in biofuel blends is shipped overseas; hence the subsidies were helping keep the oil inexpensive for other countries.19

Similarly an August 2009 Wall Street Journal article notes that, “The biofuels revolution that promised to reduce America’s dependence on foreign oil is fizzling out.”20 The article notes that two-thirds of U.S. biodiesel production capacity remains unused because of the “global credit crisis, a glut of capacity, lower oil prices and delayed government rules changes on fuel mixes,” as well as a recent tariff by Europe on U.S. biodiesel.21

While the U.S. biodiesel market is cooling, other market for soybean-based biofuels remain strong. Brazil has mandated that cars run on 25 percent biofuels (mostly sugar and soybeans), keeping the demand high. U.S. cars run on only a 10 percent biofuel blend.22

Environmental Concerns

The soybean industry has long been associated with environmental problems, such as the destruction of Amazonian rainforests for new soybean plantations. For example, a 2007 National Geographic article notes that, “Cargill’s operations in the Amazon have been controversial from the start.”23 The article cites Brazilian prosecution over the failure of Cargill to do an environmental study for its ports. Local groups have decried Cargill’s installation of a soybean washers and dryers, which provided an incentive for farmers to convert more of the Amazon forest into soybean farms.24

In 2008, Brazil extended a one year ban on the purchase of soybean products from deforested Amazon areas. The ban was initially passed in 2006 and included commitments by Brazil’s local Vegetable Oils Industry Association and Cargill Inc, Bunge Ltd, ADM Co, and Louis Dreyfus.25

A Slate posting on soybeans noted that Cornell University scientist David Pimentel found that it took “14 calories of fossil-fuel energy to produce one calorie of milk protein on a conventional farm,” ten calories of energy to produce one calorie of milk protein in an organic farm, and “0.26 calories of fossil fuel to make a calorie of organic soybeans” to be used in soy milk.26 Hence, soy protein is 13 times more energy-efficient than organic dairy protein. One must still take into consideration the amount of energy needed to ship soy milk, which is not produced in as many areas as cow’s milk, thus somewhat increasing the fossil fuel calories.27

A 2002 research study commissioned by the United Soybean Board and carried out by the Council for Agricultural Science and Technology found that “overall the currently commercialized biotechnology-derived soybean, corn, and cotton crops yield environmental benefits.”28 One key benefit is the decreased use of herbicides for GMO plants. Other benefits are no-till farming of soybeans that decrease “soil erosion, dust, and pesticide run-off” and increase “soil moisture retention and improved air and water quality.”29 One of the benefits of planting soybeans is its natural ability to fix its own nitrogen, thus needing low levels of nitrogen fertilizer.30 Hence soybeans are considered an excellent rotation crop, which is often rotated with corn.

Downside of the Soybean

There are many hotly contested issues associated with soybeans. One article entitled “The Soy Republic of Argentina” notes that Latin American countries are planting soy instead of local staple products such as grains, vegetables and even beef products. Countries, such as Argentina, are planting monoculture fields of Roundup Ready soybeans (95 percent of the Argentinean soy crop) to be exported to China and the EU. Growing pools and speculators are reaping the benefits by buying and leasing the land from small farmers that are unable to afford the high cost of growing soybeans. Argentinean farmers recently reignited a nation-wide strike over their country’s agricultural policies.31 The article highlights problems associated with Argentina’s soybean policy:

The soy republic model has led to economic dependency on transnational investments, food sovereignty risks, displacement of rural populations, degradation of soil and water systems, severe health threats from the use of pesticides and herbicides and a long list of social problems such as increased inequality and unemployment.32

In 2008, Argentina’s soy policies brought in $16 billion dollars in revenues from export levies. Hence policies are unlikely to change soon.33

Beatrice Trum Hunter, Food Editor of Consumers’ Research Magazine and the author of numerous books on food issues, is another soy critic. She highlights soy’s anti-nutrient properties, which are mostly eliminated during processing, but are not totally destroyed. Anti-nutrient aspects include anti-coagulant properties, phytic acids that bind and prevent mineral absorption, and hemagglutinins that clump red blood cells and suppress growth.34 Fermentation deactivates these nutrients, but is only used for a few soy products, such as tempeh and miso, Tofu and bean curd are processed by precipitation, a method that deactivates only some of these properties.35

Hunter further elaborates on toxic aspects of the soybean that are not deactivated with any processing. These aspects include: anti-thyroid properties associated with habitual consumption, promotion of breast cancer for those later in life; and adverse effects on infant hormonal development when used as an alternative to cow’s milk or breast milk.36

Many though believe soy is quite healthy, noting that it contains all essential amino acids, has high lecithin content, is conducive to healthy skin, can lower cholesterol, prevent cancer, and reduce the risk of coronary artery disease.37


The story of soy is the story of globalization. Many benefits have resulted from its growth, including increased access to protein, increased prosperity for companies that process it and for states that can tax it. Its relative low price makes it a potential viable alternative for energy and popular food and industrial additive, as well as cheap source of animal feed.

Soy is not without controversy. Its growth has not always benefited the local farmer, as big multinationals are increasingly taking charge. Environmental damage has been long documented in the Amazon and around the world. Even if these problems are starting to be addressed, its health benefits are in dispute.

Nonetheless, one can only marvel at how this small seed plant from China is now grown, processed, burned, or eaten in nearly every country of the world.

1 TED Case Studies. “The US and EU Trade Dispute Over GMO Soybeans.”American University.
2 Workman, Daniel. “Top Soybean Countries.” September 17, 2007.
3 “Soybeans and Oil Crops: Trade.” U.S. Department of Agriculture. November 20, 2008.
4 Wilkinson, John. “The Globalization of Agribusiness and Developing World Food Systems.” September 2009.
5 “China, Argentina ink agreements worth US$118.5 mln.” Alibaba News. August 17, 2009.
6 Thompson, James. “Making Do With Less.” Corn and Soybean Digest. February 1, 2009.
7 Wilkinson, John. “The Globalization of Agribusiness and Developing World Food Systems.” September 2009.
8 Trigona, Marie. “The Soy Republic of Argentina.” September 3, 2009.
9 Wilkinson, John. “The Globalization of Agribusiness and Developing World Food Systems.” September 2009.
10 Piller, Dan. “Soybean Makers Rush To Produce Low-Fat Oils.” Des Moines Register. September 6, 2009.
11 Ibid.
12 “Soybeans and Oil Crops: Background.” U.S. Department of Agriculture. November 20, 2008.
13 “Interest In Non-Biotech Soybeans Growing.” Corn and Soybean Digest. April 14, 2009
14 TED Case Studies. “The US and EU Trade Dispute Over GMO Soybeans.”American University.
15 Baize, John. “Europe in a Bind Over Biotech Policy.” August 24, 2009.
16 Ibid.
17 “Soybeans and Oil Crops: Policy.” U.S. Department of Agriculture. November 20, 2008.
18 Watkins, Steve. “Soybean cost a threat to biodiesel future?Practical Environmentalist. March 21, 2008.
19 Ibid.
20 Davis Ann and Russell Gold. “U.S. Biofuel Boom Running on Empty.” Wall Street Journal. August 27, 2009.
21 Ibid.
22 Ehrman, Eric. “Brazil’s Earth Day Present: A Sustainable Energy Policy.”Huffington Post. April 22, 2009.
23 Wallace, Scott. “Farming the Amazon: Last of the Amazon.” National Geographic. January 2007.
24 Ibid.
25 Lam, Jessica. “Soybean plantations-the new “Amazon forest” spurs changes to environmental practices.” June 18, 2009.
26 Leibenluft, Jacob. “Cows or Beans Which is the better source for milk?Slate. July 22, 2008.
27 Ibid.
28 “Comparative Environmental Impacts.” June 2002.
29 Ibid.
30 “Soybeans and Oil Crops: Background.” U.S. Department of Agriculture. November 20, 2008.
31 Trigona, Marie. “The Soy Republic of Argentina.” September 3, 2009.
32 Ibid.
33 Ibid.
34 Hunter, Beatrice Trun. “The Downside of Soybean Consumption.”
35 Ibid.
36 Ibid.
37 “The Health Benefits of Soybeans.”

* Picture Sources:

Leave a Reply

3 + one =