Brazil Soybean Producers Want to End Soybean Moratorium

The Soybean Moratorium in Brazil, which has been in place for nearly two decades, is an agreement between grain traders and processors that prohibits the purchase of grain produced on land that was deforested after 2008. The goal of the moratorium was to reduce deforestation in the Brazilian Amazon.

Brazilian soybean producers, represented by Aprosoja/MT, have complained about the moratorium since its inception citing the fact that the Brazilian Forestry Code allows farmers to clear some of their land depending on the type of vegetation that is present. They are allowed to clear more of their land if it is cerrado vegetation and less if it is rainforest. They contend that the moratorium has become a “superlegal barrier”, generating losses estimated at 20 billion reals for the state of Mato Grosso affecting more than 2.7 million hectares (6.6 million acres).

One major complaint is that the moratorium prohibits the purchase of any soybeans from a farm where land has been cleared after 2008, not just from the area that had been cleared.

Aprosoja/MT filed a formal complaint last week with the Administrative Council for Economic Defense (Cade) against what it calls “anti-competitive practices of the companies that are signatories to the moratorium.” Cade for its part, had already launched an administrative investigation into possible market manipulation related to the Soybean Moratorium.

Scientists and environmentalists, however, contend that the moratorium has reduced the rate of deforestation, which is the primary emitter of greenhouse gases in Brazil.

The State of Mato Grosso recently passed a new law that strengthens the position of Aprosoja/MT. The new legislation revokes the granting of tax benefits to companies that participate in agreements such as the Soybean Moratorium. Producers hope the legislation will be the first step in ending the moratorium once and for all.

Farmeres contend that the moratorium as it currently stands unfairly prohibited the sale of any soybeans from a farm that had participated in deforestation even though some soybeans were produced on land deforested before the Forestry Code took effect in 2008.

Grain companies and processors for their part have offered a compromise. They are proposing that the embargo on the purchase of soybeans is only for the area cultivated on land deforested after 2008, and not for all property, as it currently stands. Aprosoja/MT has rejected that idea and they want the entire moratorium eliminated.

Tags: Soybean Moratorium, Brazil, deforestation, greenhouse gases, vegetation