Brazil Supreme Court upholds laws that led to downfall of Amazon soy moratorium

Key Points:

• Brazil’s Supreme Court upheld state laws denying tax incentives to farmers complying with the soy moratorium, while affirming the constitutionality of the voluntary pact that bans purchasing soy from deforested Amazon land.
• Major grain traders withdrew from the soy moratorium in January after top soy-producing states passed bills revoking tax benefits for participants, threatening the future of the nearly two-decade-old agreement.
• The soy moratorium, launched in 2006, helped reduce deforestation in risk areas by 35% without harming productivity, but its end could lead to up to 1.4 million hectares of new deforestation in the next decade.
• Environmental groups criticized the court’s ruling for endorsing state laws that penalize farmers adopting stricter environmental standards, potentially undermining collective efforts to protect the Amazon.
• Industry groups welcomed the ruling for providing legal clarity but suggested the moratorium is unlikely to be revived, with some state producers pledging to resist any future agreements imposing similar restrictions.