Jan 05, 2026
Soybean Moratorium in Brazil's Amazon Biome May End
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
After nearly two decades of existence, it now appears the Soybean Moratorium in Brazil may be ending. The moratorium is considered one of the most important arrangements to reduce deforestation rates in the Brazilian Amazon over the last two decades, as it prohibits signatories from buying soybeans from farmers who plant on land deforested after July 2008. The agreement was signed in 2006 with support from the federal government and conservation groups.
Critics of the soybean moratorium claim the pack restricts the market and harms farmers. Groups of soybean producers in Mato Grosso claim that the pack reduces the income and economic development in the state.
In recent years, farmers have been pressuring state legislators from Mato Grosso, Rondonia and Maranhao to withdraw tax benefits of companies that participate in environmental pacts that are more restrictive than Brazilian legislation itself. In 2023, the State of Mato Grosso passed legislation revoking tax incentives for companies that participate in the program.
The Brazilian Forestry Code passed in 2008, mandates that farmers in the Amazon biome are only allowed to clear 20% of their land for agricultural production, but the Soybean Moratorium prohibits the purchase of soybeans from any land cleared after July of 2008 even though the farmer may have not reached his 20% allotment
Starting in January 2026, the State of Mato Grosso will withdraw the tax incentives of companies participating in the conservation program. The American companies ADM, Bunge and Cargill, as well as China's Cofco and Brazil's Amaggi are signatories to the pack, have operations in Mato Grosso and have benefited from state tax incentives. The companies have not declared their intensions, but most market participants feel the companies will opt to preserve their tax incentives and withdraw from the moratorium.
The end of the moratorium is not certain. The Advocacy General of the Union (AGU) has asked the Brazilian Supreme Court to extend for another 120 days the suspension of the law in the state of Mato Grosso that prohibits the granting of tax benefits and public lands to companies that have adhered to commercial agreements for the limitation of agricultural expansion, as in the case of the Soybean Moratorium.
The AGU argues that the withdraw of tax incentives could lead companies in the sector to abandon the environmental agreement. The Minster of Environment and Climate Change indicated that ending the moratorium without a parallel program may result in immediate damage to the environment and sustainable development of soybean and vegetable oil production, especially in the Amazon biome.
Personal note: The actions by the state of Mato Grosso to essentially end the Soybean Mortarium seem short sighted to me. Instead of fighting this program, the farmers should promote it as a value-added aspect of their soybean production. Europeans are already paying a premium for conventional soybeans (non GMO) produced in the state and they might well pay a premium for soybeans that limit deforestation.
I think they are missing an opportunity to curry favor with their customers. None of Brazil's customers like the idea of purchasing soybeans that encourage deforestation. The old adage applies here "Give customers what they want" and they do not want soybeans that could damage the Amazon rainforest. That is just my humble opinion.