Understanding the debate around the Soy Moratorium

Context of the Debate 

The Soy Moratorium, established in 2006, has long faced criticism from producers because it imposes stricter requirements than Brazilian law. Under the agreement, any detection of soy planted on area deforested after 2008 results in the farm being blocked, regardless of whether the deforestation was legal. Producers have consistently expressed dissatisfaction, viewing the Moratorium as a top-down measure that exceeds legal requirements. 

Why is this happening now? 

Opposition to the Moratorium has intensified due to a combination of factors: 

1. Increased Political Organisation: Producers are now better organised politically, leveraging formal political platforms to push their agenda. 

2. Perceived External Pressure: International demands, such as those from the EUDR, are seen as undervaluing Brazil's strong environmental legislation. Producers argue that Brazil already has some of the world’s strictest environmental laws but is not recognised for these efforts, and they face pressure to go beyond compliance without receiving fair compensation. 

3. Polarisation and Local Politics: Political polarisation has heightened tensions. This divide, coupled with municipal election campaigns, has amplified debates around the Moratorium in rural areas. 

Key Challenges to the Moratorium 

1. CADE Investigation 
   Brazil’s Administrative Council for Economic Defence (CADE) is investigating claims by producers that the Moratorium infringes antitrust regulations. Producers argue that companies that buy soy are colluding to block access to the market, undermining free trade. In response, the Moratorium's governance representatives, including ABIOVE and NGOs, are compiling evidence to show that the Moratorium responds to international demands and does not impede market access, as producers can justify compliance within the framework. If CADE concludes that the Moratorium constitutes anti-competitive behaviour, it could be dissolved as a sectoral agreement. 

2. Legislation at Multiple Levels 

   Challenges to the Moratorium are emerging across various states and even at the national level. In Mato Grosso, for example, the approved legislation seeks to revoke tax incentives for companies engaged in agreements like the Soy Moratorium. Similar proposals are being put forward in other states and discussed in Congress as part of federal legislative efforts. 

The argument driving these initiatives is that tax incentives provided to companies aim to boost job creation and economic growth. However, lawmakers claim that agreements such as the Moratorium limit market access for producers, preventing these economic benefits from materialising. Some proposals go beyond the Soy Moratorium, potentially affecting other voluntary agreements in different sectors and even individual corporate commitments that go beyond legal compliance. 

Implications 
If the Moratorium ends, companies would need to rely on individual commitments, which would introduce greater complexity and uncertainty into the supply chain. The loss of a collective agreement would require buyers to hold traders accountable individually, potentially weakening enforcement mechanisms. 

This movement is not just about the Soy Moratorium—it reflects broader resistance to external pressures perceived as infringing on national sovereignty and disrespecting Brazil’s environmental laws. While some fear an increase in deforestation, others see this as an opportunity to strengthen the implementation of the Forest Code, a robust legal framework that is among the most stringent in the world but often underappreciated internationally, mostly due to patchy implementation and enforcement.  

The key question remains: how to address legally permissible deforestation while aligning with national goals, such as eliminating deforestation in the Amazon by 2030. Incentives and stronger implementation of existing laws could provide a path forward, balancing sustainability with producers’ concerns. 

 

Read The Guardian article, with statements by Proforest's Jane Lino, here:

Protection deal for Amazon rainforest in peril as big business turns up heat | Amazon rainforest | The Guardian