Brazil's 'soy moratorium' site offline after antitrust ruling setback
The soy moratorium has long been hailed as one of the most successful initiatives to protect the Amazon rainforest because it bars soybean traders from buying from farmers who cleared land there after July 2008. But the General Superintendent of antitrust regulator CADE on Monday ruled that it represents a potential breach of Brazilian competition law.
Superintendent Alexandre Barreto de Souza ordered firms to suspend the pact or pay fines after he concluded a preliminary investigation, prompted by a request in August 2024 from the agriculture committee of Brazil's lower house of Congress. A majority of lawmakers in the committee is backed by farmers opposed to the moratorium.
On Monday, Barreto de Souza also initiated a full investigation involving some 30 grain exporters and two industry groups on whether the moratorium, which has been in place for 19 years, "constitutes an anti-competitive agreement" involving rival companies.
Brazilian soy farmers celebrated the moratorium's suspension as a historic victory. Farmers, however, are not expected to clear big areas of forest to grow soy as that crop has been advancing over pastureland, according to Mauricio Buffon, president of farm lobby Aprosoja.
'We do not believe there will be a drop in soy trade,' he said.
Even so, soy traders are now in a bind. People familiar with the thinking of trade groups Anec and Abiove told Reuters they will appeal the suspension of the pact at CADE's tribunal, which is composed of six commissioners, including its president.
While CADE may take years to conclude the investigation and issue a final opinion on the moratorium's legality, companies may settle with the agency during the course of the probe.
If traders are found guilty of breaching competition law, their trade groups face fines of up to 2 billion reais ($365.60 million). For traders themselves, fines can reach up to 20% of the company's gross revenue in the last fiscal year before the investigation started.
($1 = 5.4704 reais)
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