AGUA CLARA, Brazil (AP) 鈥� A historic agreement that's helped curb deforestation in Brazil鈥檚 Amazon for nearly two decades suffered a major blow after Mato Grosso, the country麓s largest soybean-producing state, passed a law ending incentives for participating processing and trade companies.
The law passed last week was designed to void the Soy Moratorium 鈥� a 2006 deal in reaction to a Greenpeace investigation that linked soy produced in illegally deforested areas to U.S. commodities giants Cargill, Bunge and ADM. Under pressure, the companies agreed at the time not to buy soy produced in areas cleared after 2006. The date was later revised to July 2008.
Several studies in recent years have shown the moratorium contributed to the Amazon鈥檚 preservation. A 2020 study in the journal found that the agreement, in combination with public policies, contributed to the steepest reduction of deforestation recorded in Brazil鈥檚 Amazon, between 2003 and 2016.
Backed by soybean producers and most of Mato Grosso麓s lawmakers and mayors, the new legislation cuts tax benefits to companies that participate in any agreement that imposes restrictions on expanding agricultural activities into areas that can be legally deforested. Governor Mauro Mendes signed the law Oct. 24. It goes into effect on Jan. 1, 2025, but regulations are pending.
It states that only the illegally deforested area of a farm will be prevented from selling soy. In other words, if a 4,000-acre (1,618-hectare) property clears 200 acres (81 hectares) unlawfully, just the output from that specific area is blocked. Specialists warn that such refined monitoring is technically challenging, if not unfeasible.
Under the moratorium, property with any post-2008 deforestation is forbidden altogether to sell its crops, regardless of whether the deforestation is legal.
Supporters of the new state law have long claimed the moratorium麓s 2008 limit is stricter than Brazilian legislation that allows the deforestation of up to 20% of a large rural property in the Amazon.
鈥淲e will not rest as long as the moratorium harms even one producer," the Mato Grosso soy producers president Lucas Costa Beber said in a celebratory statement. "And until this agreement is extinct, the trading companies will not have a peaceful sleep."
Environmental nonprofits and the entity representing leading soybean trade and processing companies have criticized Mato Grosso麓s initiative.
鈥淭he law is a setback,鈥� said Bernardo Pires, sustainability director of the Brazilian Association of Vegetable Oil Industries (Abiove), which supports the moratorium. 鈥淐ompanies committed to sustainability should receive twice as many benefits instead of losing them.鈥�
Abiove members, which include Cargill, Bunge and ADM, buy over 90% of Mato Grosso麓s soy production. The state tax benefits amount to $308 million a year.
Pires said the moratorium麓s zero deforestation policy is a market demand. "Our European customers demand not to consume any products associated with deforestation,鈥� he said.
Cristiane Mazzetti, coordinator of the forests campaign at Greenpeace Brazil, said the law reveals a double standard among politicians connected to agribusiness, who in the Brazilian Congress seek to pass measures reducing environmental protection.
The new law sparked mixed reactions within President Luiz In谩cio Lula da Silva鈥檚 government, which has promised zero deforestation by 2030.
Andr茅 Lima, secretary of deforestation control at the Ministry of the Environment and Climate Change, said that although state governments have the right to choose which economic activities they want to support, it is unconstitutional to withdraw tax incentives from companies that have adopted sustainability and climate criteria aligned with Brazil鈥檚 deforestation reduction goals.
鈥淚t also goes against the national tax reform guidelines, which have incorporated sustainable development as an important criterion for promoting more and new tax incentives for the green economy,鈥� he told The Associated Press.
Agriculture Minister Carlos F谩varo, however, praised the law. 鈥淭he project (moratorium) is stricter than the law, and this creates legitimate dissatisfaction among producers,鈥� he told reporters in an event last week.
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Fabiano Maisonnave, The Associated Press
