Brazil's Supreme Court has lifted the "soy moratorium" in the Amazon forests, allowing soy production to increase

Brazil's Supreme Court has allowed the country's largest agricultural state, Mato Grosso, to cancel tax breaks for participants in the "Soy Moratorium" - a voluntary agreement that banned the purchase of soybeans grown on the site of Amazon forests cut down after 2008. Such a decision will weaken an environmental initiative to protect tropical forests from destruction, Reuters reports.

Agrarian lobbyists across the country are pushing for the moratorium to be lifted, arguing that it has cost the state 20 billion reais, or $3.3 billion, and is hurting farmers. They have filed lawsuits against major agribusiness companies (including ADM, Bunge, Cargill, and others) seeking compensation for not cultivating the land. Under forestry regulations, landowners in the Amazon can only clear up to 20 percent of their property for crops.

The Supreme Court found the moratorium important for the environment, but ruled that the state has the right to determine its own tax criteria. If the panel of judges approves the decision, it will take effect in 2026.

The Abiove trade association is negotiating with the Mato Grosso authorities and notes that the benefits already granted will remain in effect, but so far farmers and traders have not reached a compromise.

Brazilian farmers could significantly increase their sown area by clearing and plowing pastures, but they are prevented from doing so by a ban on purchasing products grown on such land. But given that China buys most of its soybeans, lifting the moratorium would help the country significantly increase its sown area in the coming years.