Background on Key Players and Relevance
Some of the world’s largest soy traders are preparing to abandon an agreement aimed at curbing Amazon deforestation, in order to safeguard tax benefits within Brazil’s leading agricultural state, Mato Grosso. This state is the country’s top soybean producer.
The companies contemplating withdrawal from the “Soy Moratorium Amazon” include prominent international players such as ADM, Bunge, Cargill (USA), Cofco (China), and Amaggi (Brazil). These firms have established operations in Mato Grosso and have benefited from state tax incentives.
Details of the Situation
Starting in January, Mato Grosso will withdraw tax incentives from companies participating in the conservation program. In 2025, Mato Grosso produced approximately 51 million tons of soybeans, surpassing Argentina’s output.
An audit report by state auditors in April revealed that grain traders had received tax benefits worth around $840 million between 2019 and 2024. ADM and Bunge were the primary beneficiaries, each receiving roughly $269 million (1.5 billion reals).
Impact on Deforestation and Conservation Efforts
The Soy Moratorium, signed in 2006 with the federal government and conservation groups, has been instrumental in reducing deforestation rates in the Brazilian Amazon over the past two decades. It prohibits signatories from purchasing soybeans from farmers who cultivate on deforested lands after July 2008.
Researchers estimate that without the moratorium and related conservation efforts, Brazil would have lost a forest area equivalent to Ireland’s size to soybean plantations, accelerating deforestation compared to neighboring countries like Bolivia.
New State Legislation in Mato Grosso
The recent trend of companies leaving conservation pacts aligns with a global withdrawal from climate change mitigation efforts, despite record-breaking temperatures driven by increased fossil fuel usage and deforestation.
In 2023, Mato Grosso’s legislators approved a law that further encourages these companies to prioritize tax benefits over environmental conservation.
Key Questions and Answers
- Who are the key players involved? Major international soy traders such as ADM, Bunge, Cargill (USA), Cofco (China), and Amaggi (Brazil) are considering leaving the Soy Moratorium Amazon.
- What tax benefits are at stake? Mato Grosso will withdraw tax incentives from companies participating in the conservation program starting January.
- How effective has the Soy Moratorium been? The moratorium has significantly reduced deforestation rates in the Brazilian Amazon over two decades by preventing soy purchases from farmers cultivating on deforested lands after July 2008.
- What is the impact of this decision on conservation efforts? Without the moratorium and related conservation initiatives, Brazil could have lost a forest area equivalent to Ireland’s size to soybean plantations, accelerating deforestation compared to neighboring countries.
- What is the significance of Mato Grosso’s new legislation? The 2023 law in Mato Grosso prioritizes tax benefits over environmental conservation, aligning with a global trend of withdrawing from climate change mitigation efforts.
