Top Soy Traders Exit Pact That Protects Amazon Forests

(Bloomberg) — A group representing some of the world’s largest soybean traders is exiting a landmark agreement created in Brazil to protect the Amazon from deforestation, according to a statement released Monday.

Its affiliates include Archer-Daniels-Midland Co., Bunge Global SA, Cargill Inc. and Louis Dreyfus Co. Industry group Abiove, which includes trade giants such as, said it had initiated talks on withdrawing from the Soy Moratorium, adding that the agreement created in 2006 had “fulfilled its historic role”.

The move marks a major setback to the 19-year-old initiative, which has been praised by environmentalists and faces growing criticism from the country’s farmers.

The moratorium is an agreement under which traders are not allowed to source soybeans from Amazon lands that were deforested before 2008. The agreement has been challenged by farmer groups such as Aprosoja Mato Grosso, who argue that the agreement imposes a stricter rule on forest protection than Brazil’s own national legislation.

Abiove’s announcement came after Mato Grosso, the largest soybean-growing state, enacted a law eliminating tax benefits for traders who comply with the moratorium. In November, the Supreme Court ruling partially ruled in the state’s favor, and as of January 1, traders who support the deal will no longer benefit from tax relief. The Chief Public Prosecutor requested that the implementation of the law be postponed for four months.

WWF Brazil, an environmental nonprofit, said in a note: “The Soy Moratorium was not lifted by legal imposition: it still exists, but has been consciously undermined by companies’ decision to withdraw voluntarily.” “By doing so, these companies have signaled their willingness to prioritize access to publicly funded tax incentives to the detriment of combating deforestation and taking responsibility for the climate crisis.”

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