A historic agreement that has helped curb deforestation in Brazil’s Amazon for nearly two decades has taken a major hit after Mato Grosso, the country’s largest soybean-producing state, passed a law ending incentives for processing and trade companies that comply with the Soy Moratorium.
The 2006 moratorium was a commitment that U.S. commodities giants like Cargill, Bunge, and ADM made in response to a Greenpeace investigation linking their soy supplies to deforested areas. Pressured by the global outcry, these companies agreed not to buy soy from land cleared after 2006, a cutoff later extended to July 2008.
The new legislation, backed by soybean producers and most Mato Grosso lawmakers and mayors, cuts tax benefits for companies participating in any agreements restricting the expansion of agriculture into legally deforestable land. Governor Mauro Mendes signed the law on October 24, set to take effect on January 1, 2025, though specific regulations are still pending.
Under the new law, only the area illegally cleared on a property is barred from soy sales. For example, if 200 acres (81 hectares) of a 4,000-acre (1,618-hectare) farm are illegally deforested, only the crop from those acres is restricted. Experts warn this selective monitoring could be technically challenging, if not unfeasible.
In contrast, the Soy Moratorium prevents any property with post-2008 deforestation from selling soy, whether the deforestation was legally sanctioned or not.
Supporters of Mato Grosso’s law argue that the moratorium's 2008 cutoff is stricter than Brazilian law, which allows deforestation on up to 20% of large rural properties in the Amazon. However, environmental organizations and the trade association representing leading soybean processors have criticized the new legislation.
“The law is a setback,” said Bernardo Pires, sustainability director for the Brazilian Association of Vegetable Oil Industries (Abiove), which supports the moratorium, to AP news. “Companies committed to sustainability should receive double the incentives, not have them taken away.”
Abiove members, including Cargill, Bunge, and ADM, purchase over 90% of Mato Grosso’s soy production, with state tax benefits estimated at $308 million annually. Pires noted that the moratorium’s zero-deforestation policy aligns with market demands. “Our European customers insist on products unlinked to deforestation,” he said.
Cristiane Mazzetti, forest campaign coordinator at Greenpeace Brazil, said the new law shows a double standard among politicians connected to agribusiness, who dismiss the moratorium as redundant while simultaneously seeking to undermine environmental protections.
