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 deal created in Brazil to protect the Amazon against deforestation, according to a statement issued Monday.

Industry group Abiove, who has among its associates trading giants including Archer-Daniels-Midland Co., Bunge Global SA, Cargill Inc. and Louis Dreyfus Co., said it has initiated discussions regarding its withdrawal from the Soy Moratorium, adding the agreement created in 2006 “fulfilled its historical role.”

The move is a major setback to the 19-year-old initiative praised by environmentalists that has been facing increasing criticism from farmers in the country.

The moratorium is a pact according to which traders are not allowed to source soybeans from Amazon lands deforested prior to 2008. The agreement was contested by farmer groups such as Aprosoja Mato Grosso, who argue the deal imposes a stricter rule than Brazil’s own national legislation on forest protection.

Abiove’s announcement comes after the top soybean-growing state of Mato Grosso enacted a law removing tax benefits from traders who obey the moratorium. A November Supreme Court decision ruled partly in favor of the state, and as of Jan. 1 traders supporting the pact no longer receive tax benefits. The attorney general has requested a four-month delay to implementing the law.

“The Soy Moratorium was not abolished by legal imposition: it still exists, but it was consciously undermined by the voluntary decision of companies to withdraw,” WWF Brazil, an environmental nonprofit, said in a note. “In doing so, these companies signaled their willingness to prioritize access to tax incentives funded with public resources, to the detriment of tackling deforestation and taking responsibility for the climate crisis.”

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