Some of the world’s largest soybean trading firms are preparing to leave a long-standing agreement that protects the Amazon rainforest. Two sources with direct knowledge of the matter said the move aims to protect tax benefits in Brazil’s top farm state.
The companies plan to exit the Amazon Soy Moratorium, a pact that has helped slow deforestation for nearly twenty years. They want to avoid penalties under a new law in Mato Grosso that targets firms involved in environmental programs.
Mato Grosso Law Threatens Tax Incentives
Starting in January, Mato Grosso will remove tax incentives from companies that take part in the moratorium. The state is Brazil’s largest soybean producer. In 2025, it harvested about fifty-one million metric tons, more than Argentina.
A preliminary audit found that grain traders received around four point seven billion reais in tax benefits between 2019 and 2024. ADM and Bunge were the largest recipients, each gaining roughly one point five billion reais, according to state audit officials.
ADM, Bunge, Cargill, Cofco, and Amaggi all signed the pact and operate facilities in Mato Grosso. However, it remains unclear which firms will withdraw first.
Firms Stay Silent as Pressure Grows
Cargill referred questions to industry group Abiove, which did not respond. ADM, Bunge, Cofco, Amaggi, and exporter group Anec also declined to comment.
One source said most companies would rather keep tax incentives than stay in the agreement. If they leave, the move would effectively end a pact signed in 2006 with the federal government and environmental groups.
Why the Moratorium Matters
The Amazon Soy Moratorium bans traders from buying soy grown on land deforested after July 2008. Experts consider it one of the strongest tools against deforestation in the region.
Researchers estimate that without the pact, soy farming would have destroyed an area of rainforest the size of Ireland. In comparison, soy expansion moved much faster in nearby countries such as Bolivia.
Political Pushback Against Climate Rules
Lawmakers passed the Mato Grosso law in 2023. Critics see it as part of a broader global retreat from climate commitments, even as temperatures continue to break records.
Farm groups argue the moratorium limits competition and hurts local farmers. They say it reduces income and slows economic growth in the state.
Environmental groups strongly disagree. Greenpeace warned that abandoning the pact would set a dangerous example at a time of climate crisis.
Federal Government Pushes Back
Brazil’s federal government has challenged the Mato Grosso law in court. Officials argue that states should not punish companies for environmental commitments.
An Environment Ministry official said firms have not formally notified the government of plans to exit. Still, he warned that many may leave for economic reasons if tax breaks disappear.
Wider Risks for Environmental Protections
President Luiz Inacio Lula da Silva has pledged to shift Brazil toward a greener economy. However, farm lobby groups hold a strong influence in Congress.
Environmentalists fear the collapse of the soy moratorium could weaken other protections. These include parts of Brazil’s forestry code that limit tree clearing on Amazon farmland.
Several states have already passed similar laws targeting companies that follow stricter environmental rules than national law. These measures could affect other industries, including meatpacking and pulp production.
Legal Battles Continue
Brazil’s antitrust agency CADE opened an investigation into the moratorium, citing possible competition concerns. It ordered traders to stop sharing commercial data related to soy production and sales.
Soy farmers in Mato Grosso have also sued grain traders for about one hundred eighty million dollars over their role in the pact.
The Supreme Court has paused parts of the antitrust probe but allowed the state law to move forward. Environmental groups are still seeking to block the law ahead of a final ruling.
