A voluntary agreement to curb soy-driven deforestation in the Amazon is collapsing amid political shifts in Brazil. The Brazilian Association of Vegetable Oil Industries announced plans to withdraw following the elimination of tax benefits in Mato Grosso state. Experts warn this could accelerate rainforest loss and undermine sustainability efforts.
Nearly 20 years ago, a Brazilian lobbying group representing soy traders and processors launched the Amazon soy moratorium, a voluntary pact that bars members from purchasing soybeans from lands deforested after July 2008. Proponents credit the deal with safeguarding forest areas while allowing soy output to flourish on pre-2008 cleared lands or pastures, where production has quadrupled since 2006.
The agreement now faces existential threats. On January 1, a new law in Mato Grosso—the top soy-producing state—axed tax incentives previously worth an estimated $840 million from 2019 to 2024 for moratorium participants. In response, the Brazilian Association of Vegetable Oil Industries (ABIOVE), which includes giants like Cargill, Bunge, and ADM, stated it has initiated withdrawal discussions. ABIOVE emphasized that other measures, such as Brazil's Forest Code, would persist, and the monitoring expertise gained over nearly two decades remains valuable.
Critics of the moratorium, including soy farmers and cattle ranchers who rely on soy for animal feed, have long argued it favors multinational traders over local producers, labeling them a "purchasing cartel." Tensions escalated last year when Brazil's anti-competition regulator ordered companies to halt compliance or face fines. Environmental advocates decry the move as shortsighted. "The exodus of agrifood groups from the moratorium is entirely self-defeating," said Glenn Hurowitz of Mighty Earth. "These companies’ commercial success has relied on the soy moratorium."
João Brites of HowGood called the departure a "huge loss," highlighting risks to the Amazon's carbon sequestration, biodiversity, and water cycle. Deforestation could disrupt rainfall patterns essential for regional agriculture, he noted. Ane Alencar of the Amazon Environmental Research Institute described ABIOVE's announcement as a "very bad sign that the market no longer wants to actually go into this direction of sustainability."
The development follows COP30 in Belém, where Brazil reaffirmed forest protection pledges, yet contrasts with global retreats from climate action. While Cargill aims for deforestation-free supply chains by 2030, experts like Brites point out this allows sourcing from new clearings in the interim. Hurowitz warned of consumer backlash, echoing pressures that birthed the moratorium two decades ago, and noted a broader elite indifference to nature.
