Brazil Supreme Court Upholds Laws That Led to Soy Moratorium's Downfall

Brazil's Supreme Court has dealt a significant blow to the soy moratorium, upholding state laws that deny tax incentives to farmers who comply with the agreement barring the purchase of soy grown on deforested Amazon land.

The court also affirmed the constitutionality of the voluntary pact, which was launched in 2006 as a response to pressure from environmental groups and international buyers. Major soy traders agreed to ban purchases of soy grown on Amazon land cleared after July 2008, but farmers long argued that the moratorium hurt business because it was stricter than Brazilian environmental law.

The soy moratorium helped reduce deforestation in risk areas by 35% in the first decade since it became effective without hurting productivity. However, the end of the pact could drive up to 1.4 million hectares (3.5 million acres) of deforestation in the next decade and leave an area the size of Portugal vulnerable to legal deforestation.

Greenpeace Brazil's Angela Barbarulo called the court's recognition of the moratorium's constitutionality 'enormously important,' but said the ruling was undercut by its endorsement of state laws that penalize farmers and companies that adopt environmental standards beyond those required by law.