Amazon Soy Moratorium Faces Collapse After 20 Years

A historic conservation agreement protecting the Amazon rainforest is facing a major crisis nearly 20 years after its creation. The Amazon soy moratorium, a voluntary deal prohibiting members from buying soy grown on lands deforested after July 2008, is in danger of falling apart.

The crisis was triggered by a new tax law in Mato Grosso, Brazil's top soy-producing state, which eliminated tax benefits for companies participating in the moratorium. In response, the Brazilian lobbying group representing major soy traders—including multinational firms like Cargill, Bunge, and ADM—announced its plan to leave the agreement.

Experts warn that without the participation of these major corporations, the deal will become toothless, putting more of the Amazon rainforest at risk of deforestation. The move follows years of pressure from local farmers and ranchers who argued the agreement created an unfair playing field. While the moratorium is credited with protecting forest land for two decades, its collapse could have severe ecological consequences, including increased carbon emissions and threats to biodiversity and water cycles.

A major conservation pact that has protected the Amazon rainforest for two decades is now on the brink of collapse. The Amazon soy moratorium, a voluntary agreement signed nearly 20 years ago by a Brazilian lobbying group for soy trading and processing companies, is facing an uncertain future.

The moratorium established a critical rule: members are prohibited from buying soybeans grown on lands that were deforested after July 2008. This agreement was designed to halt the expansion of soy farming into newly cleared forest areas. Proponents have long argued that the deal was highly effective, protecting vast tracts of forest land without impeding soy production over the last 20 years.

Under the terms of the moratorium, soy production on lands cleared before 2008, as well as on pasture or savannah lands, remained permissible. Reports indicate that production on such lands in the Amazon quadrupled since 2006, suggesting that the industry could grow without cutting down new forest. However, this long-standing agreement is now unraveling due to shifting political and economic pressures.

The turning point for the moratorium arrived on January 1, when a new law took effect in Mato Grosso. This state is the largest soybean producer in Brazil. The new legislation eliminates tax benefits that were available to companies participating in the moratorium. These tax benefits had functioned separately from the conservation agreement itself.

Despite the separation, the impact was immediate. Following the new law, the lobbying group for soy traders—which includes multinational giants like Cargill, Bunge, and ADM—announced its plan to leave the moratorium. This decision appears to be a response to long-standing complaints from local agricultural producers.

For years, soy farmers and cattle ranchers have opposed the moratorium, claiming it hampered their business and created an uneven market. They argued that the agreement privileged multinational corporations over Brazil's own agricultural producers. One farmer lobbying group went as far as to label the soy traders a "purchasing cartel." This pressure culminated last year when Brazil’s anti-competition regulator attempted to squash the moratorium, ordering participating companies to cease complying or face hefty fines. The new tax law in Mato Grosso seems designed to "re-level the playing field," with estimates suggesting tax subsidies for moratorium participants amounted to $840 million between 2019 and 2024.

The potential collapse of the moratorium has drawn sharp criticism from environmental experts and advocates. Glenn Hurowitz, founder of the environmental advocacy group Mighty Earth, described the exodus of agricultural food groups from the moratorium as "entirely self-defeating."

For 20 years, Hurowitz argued, "these companies' commercial success has relied on the soy moratorium." He believes that "gutting it is probably going to create a lot of marketing and market access challenges for them."

João Brites, director of growth and innovation at HowGood, a startup focused on supply chain decarbonization, called the traders' departure from the deal a "huge loss." Weakening the moratorium is expected to have numerous negative repercussions for the Amazon's ecology and its ability to sequester carbon.

The consequences of renewed deforestation are severe:

• Carbon Emissions: Deforestation releases carbon dioxide stored in trees back into the atmosphere, potentially turning parts of the Amazon from carbon sinks into carbon sources.
• Biodiversity Loss: The destruction of habitat threatens the ecosystem's rich biodiversity.
• Water Cycle Disruption: Trees play a critical role in the water cycle by taking in water from the soil and transpiring it into the atmosphere, which then falls as precipitation. Brites noted that losing trees impacts rainfall, which is "directly connected to agricultural yields."

Ane Alencar, director of science at the Amazon Environmental Research Institute (IPAM), called the traders' departure a "very bad sign that the market no longer wants to actually go into this direction of sustainability." Furthermore, the weakening of the agreement threatens Indigenous lands, as agricultural producers seek new areas for expansion, especially if those lands are not properly demarcated.

The collapse of the moratorium raises questions about the future of corporate conservation pledges in the region. While the agreement provided a unified, immediate standard for the industry, individual company goals may offer less protection. For example, Cargill, which buys soy from Brazilian farmers and supplies major food retailers like McDonald's, has stated it will continue to work toward its own goal of making its supply chains "free of deforestation" by 2030.

However, experts point out a critical flaw in this timeline. As João Brites noted, a 2030 deadline means the corporation can still source from newly deforested lands until that date. Under the soy moratorium, the company had vowed not to do so. This gap between the moratorium's immediate protections and future corporate targets leaves the Amazon vulnerable in the coming years.

The news from the Brazilian lobbying group comes shortly after the COP30 summit in Belém, Brazil, where the host country emphasized its commitment to protecting its forests. The private sector's move to abandon the moratorium suggests a disconnect between government promises and market behavior, reflecting a feeling that there is less political and social pressure to prioritize the planet's interests.