Brazilian Soybean Producers Push to End Soybean Moratorium

Brazilian soybean producers are pushing to end the long-standing Soybean Moratorium in Brazil, which has been in effect for nearly two decades. This agreement, established between grain traders and processors, restricts the purchase of grain from land that was deforested after 2008 in an effort to combat deforestation in the Brazilian Amazon.

Represented by Aprosoja/MT, soybean producers have raised concerns about the moratorium from the beginning. They argue that the Brazilian Forestry Code permits farmers to clear land based on the type of vegetation present, allowing for different clearance levels for cerrado vegetation compared to rainforest. Producers claim that the moratorium has created significant financial losses, estimated at 20 billion reals in the state of Mato Grosso, impacting over 2.7 million hectares (6.6 million acres).

One of the key issues raised by producers is that the moratorium restricts the sale of soybeans from any farm where land has been cleared after 2008, not just the specific cleared area. Aprosoja/MT recently filed a complaint with the Administrative Council for Economic Defense (Cade) alleging anti-competitive practices among companies adhering to the moratorium. Cade has already initiated an investigation into potential market manipulation related to the agreement.

Despite these complaints, scientists and environmentalists argue that the Soybean Moratorium has played a crucial role in reducing deforestation, a major source of greenhouse gas emissions in Brazil. In response to the producers’ concerns, the State of Mato Grosso passed a new law that supports Aprosoja/MT’s position. This legislation removes tax benefits for companies participating in agreements like the Soybean Moratorium, paving the way for a potential end to the moratorium.

In an attempt to find a compromise, grain companies and processors have proposed lifting the embargo on soybean purchases only for areas cultivated on land deforested after 2008, rather than imposing a blanket restriction on all property as it currently stands. However, Aprosoja/MT has rejected this proposal and insists on completely eliminating the moratorium.

With tensions rising between producers and industry stakeholders, the future of the Soybean Moratorium in Brazil remains uncertain. The outcome of this debate will not only impact the soybean market but also have broader environmental implications for the region.