The Soy Moratorium, established in 2006 in response to a Greenpeace investigation, connected major U.S. commodity giants like Cargill, Bunge, and ADM to soy produced in areas where illegal deforestation had occurred. Under pressure, these companies agreed not to purchase soy produced in any newly cleared lands since the moratorium took effect. Over the years, studies have shown that this agreement has significantly contributed to reducing deforestation rates in the Amazon, with a 2020 study published in Nature Food highlighting its effectiveness alongside public policies in reducing forest loss between 2003 and 2016.
The recent law, supported by soybean producers and most lawmakers and mayors in Mato Grosso, revokes tax benefits for companies that engage in agreements limiting agricultural expansion in deforested areas. This new measure will take effect on January 1, 2025, pending further regulations. It stipulates that only the sale of soy from illegally deforested areas will be restricted; thus, if a property has part of its land illegally cleared, only that specific section will be barred from selling its soy. Experts caution that enforcing such nuanced monitoring may be technically challenging, if not unfeasible.
Previously, the moratorium had imposed a complete ban on selling crops from any property that experienced deforestation after 2008, regardless of legality. Supporters of the new state law argue that the 2008 moratorium was more stringent than Brazilian law, which permits up to 20% deforestation on large rural properties in the Amazon.
Lucas Costa Beber, president of the Mato Grosso Soy Producers Association, celebrated the new law, stating, “We won’t rest until the moratorium is lifted, and business companies can operate freely.” In contrast, environmental NGOs and organizations representing major soy trading and processing companies have criticized the initiative. Bernardo Pires, the sustainability director of the Brazilian Association of Vegetable Oil Industries (ABIOVE), called the law a setback, emphasizing that companies committed to sustainability should not be penalized.
ABIOVE members, including Cargill, Bunge, and ADM, account for over 90% of soy purchases from Mato Grosso, with state tax benefits valued at $308 million annually. Pires pointed out that the moratorium’s zero deforestation policy reflects market demand, as European clients increasingly avoid products linked to deforestation.
Greenpeace Brazil’s Forest Campaign Coordinator, Cristian Mazetti, noted that the law highlights the double standards among politicians linked to agribusiness, who dismiss the moratorium while attempting to undermine environmental protections.
The new legislation has sparked mixed reactions within President Luiz Inácio Lula da Silva’s government, which has pledged to achieve zero deforestation by 2030. André Lima, Secretary for Deforestation Control in the Ministry of Environment and Climate Change, argued that while state governments have the right to choose which economic activities to support, withdrawing tax incentives from companies adopting sustainability practices is unconstitutional and undermines Brazil’s deforestation reduction goals.
Conversely, Agriculture Minister Carlos Favaro praised the law, stating that it addresses legitimate discontent among producers while suggesting that the moratorium had become overly restrictive.
