Brazil soy industry's exit from moratorium may spur deforestation

ABIOVE and major soy traders have begun withdrawing from the nearly 20-year soy moratorium, and Mato Grosso's change to tax incentives is cited as a key reason; environmental groups say the move could increase Amazon deforestation.

Brazil's main soy industry group ABIOVE has begun the process of withdrawing from the 2006 soy moratorium. The moratorium barred purchases of soy grown on Amazon land cleared after July 2008 and relied on satellite monitoring and audits to enforce the pledge. Government officials and environmental groups said the withdrawal effectively ends the agreement, though no participant has formally declared it over. Mato Grosso's recent change to tax incentives for companies in the pact is cited as a central reason for the exit. Key points: - ABIOVE announced it began withdrawing from the nearly 20-year soy moratorium; members include major global soy traders. - André Lima, the Environment Ministry official in charge of deforestation control, said he understands the moratorium has come to an end, even though no formal declaration from all participants was reported. - Mato Grosso ended tax benefits tied to participation in the pact as of Jan. 1, and ABIOVE said companies will rely on authorities for a new regulatory framework while meeting market demands individually. Summary: Environmental groups and a preliminary study reported that ending the moratorium could raise Amazon deforestation and increase greenhouse gas emissions; the withdrawal followed a change in Mato Grosso's tax incentives and ABIOVE's decision to begin exiting the pact. Undetermined at this time.