A historic agreement that’s helped curb deforestation in Brazil’s Amazon for nearly two decades suffered a major blow after Mato Grosso the country´s largest soybean-producing state passed a law ending incentives for participating processing and trade companies The law passed last week was designed to void the Soy Moratorium — a 2006 deal in reaction to a Greenpeace investigation that linked soy produced in illegally deforested areas to American commodities giants Cargill the companies agreed at the time not to buy soy produced in areas cleared after 2006 Several studies in recent years have shown the moratorium contributed to the Amazon’s preservation A 2020 study in the journal Nature Food found that the agreement contributed to the steepest reduction of deforestation recorded in Brazil’s Amazon Backed by soybean producers and most of Mato Grosso´s lawmakers and mayors the new legislation cuts tax benefits to companies that participate in any agreement that imposes restrictions on expanding agricultural activities into areas that can be legally deforested Governor Mauro Mendes signed the law October 24 It states that only the illegally deforested area of a farm will be prevented from selling soy if a 4,000-acre (1,618-hectare) property clears 200 acres (81 hectares) unlawfully just the output from that specific area is blocked Specialists warn that such refined monitoring is technically challenging property with any post-2008 deforestation is forbidden altogether to sell its crops regardless of whether the deforestation is legal Supporters of the new state law have long claimed the moratorium´s 2008 limit is stricter than Brazilian legislation that allows the deforestation of up to 20 per cent of a large rural property in the Amazon “We will not rest as long as the moratorium harms even one producer,” the Mato Grosso soy producers president Lucas Costa Beber said in a celebratory statement “And until this agreement is extinct the trading companies will not have a peaceful sleep.” Environmental non-profits and the entity representing leading soybean trade and processing companies have criticised Mato Grosso´s initiative “The law is a setback,” said Bernardo Pires sustainability director of the Brazilian Association of Vegetable Oil Industries “Companies committed to sustainability should receive twice as many benefits instead of losing them.” buy over 90 per cent of Mato Grosso´s soy production The state tax benefits amount to US$308 million a year Pires said the moratorium´s zero deforestation policy is a market demand “Our European customers demand not to consume any products associated with deforestation,” he said coordinator of the forests campaign at Greenpeace Brazil said the law reveals a double standard among politicians connected to agribusiness who oppose the moratorium as unnecessary yet seek to weaken these same environmental protection The new law sparked mixed reactions within President Luiz Inácio Lula da Silva’s government which has promised zero deforestation by 2030 secretary of deforestation control at the Ministry of the Environment and Climate Change said that although state governments have the right to choose which economic activities they want to support it is unconstitutional to withdraw tax incentives from companies that have adopted sustainability and climate criteria aligned with Brazil’s deforestation reduction goals “It also goes against the national tax reform guidelines which have incorporated sustainable development as an important criterion for promoting more and new tax incentives for the green economy,” he told The Associated Press “The project (moratorium) is stricter than the law and this creates legitimate dissatisfaction among producers,” he told reporters View the discussion thread. The ad-free version is ready for purchase on iOS mobile app today we couldn't find that page";var n=e.querySelector("h2");return n&&n.remove(),{staticContent:e,title:t}},d=function(e){var t=document.createElement("button");return t.innerText=e,t.classList.add("error-page-button"),t},f=function(e){var t=document.createElement("div");t.id="recirculation-404",t.classList.add("brand-hint-bg");var n="\n \n \n \n \n \n '.concat(e,' Tick here if you would like us to send you the author’s response January 18, 2024 at 8:30 am CSTExpandAn agricultural machine plants soybeans on a farm in a rural area of Sidrolandia, Mato Grosso do Sul state, Brazil. (AP photo/Eraldo Peres) WASHINGTON — Brazil’s record high soybean production, depreciating currency and an expected boost in exporting capabilities through expanding transportation infrastructure will have important implications for U.S. international agricultural markets. The U.S. Department of Agriculture Economic Research Service issued a report last month on soybean production, marketing costs and export competitiveness in Brazil and the United States. The United States was the world’s largest soybean exporter until the 2012-2013 marketing year when Brazil exported more soybeans than the United States. Since then, Brazil’s share of the global soybean trade has increased. “Projections indicate that the Brazilian share of global soybean trade could increase from 51.6% to 60.6% between marketing years 2021-2022 and 2032-2033. Soybeans are Brazil’s main agricultural commodity export by volume, and the country exports more than 60% of the soybeans it grows,” the report stated. “The international market is of great importance to the U.S. agricultural economy, with soybean exports accounting for 48% of total production. “Brazil and the U.S. are major export competitors; thus, a comparison of their production costs will help infer how changes to factors underlying production, marketing costs and infrastructure affect their export competitiveness.” Many aspects of the international trade dynamics of the soybean sector are rapidly changing. Some of these include changes in global demand, local currency fluctuations, transportation costs and input availability. Brazil’s recent expansion of soybean shipments during September to December and recent disruptions to fertilizer imports that were exacerbated by Russia’s war against Ukraine also play a role. A truck loads soybeans at a storage company in the city of Sidrolandia, Mato Grosso do Sul state, Brazil. (AP photo/Eraldo Peres) Findings of the study describe many of the factors that affect production, marketing costs and export competitiveness of the world’s leading soybean exporters — the United States and Brazil. The study compares the differences between farm-level production costs and returns for soybeans in the United States and Brazil from 2017-2018 through 2021-2022 for the most productive growing regions in each country. With respect to production costs, returns and competitiveness, the study finds: • Costs of production differed between the United States and Brazil, partially reflecting Brazil’s greater reliance on custom services to provide equipment and labor for crop field operations as opposed to farm ownership of machinery in the United States. Land costs were also higher in the United States. • Overall, allocated overhead costs — hired labor, opportunity cost of unpaid labor, capital recovery of machinery and equipment, opportunity cost of land, taxes and insurance, general farm overhead — were lower in Brazil at $155.12 per acre than in the United States at $337.72. • Total costs per bushel of soybeans in the United States exceeded total costs per bushel of soybeans in Brazil in 2021-2022 by a $9.85 to $8.67 margin. The U.S. heartland average was $9.18 per bushel. • Average national farm-level production costs per acre for soybeans in Brazil at $425.97 were 19.9% below the United States at $531.67 in 2021-2022, largely because of lower land and capital costs. The United States had higher yields per acre than Brazil in the regions included in the study, particularly in the U.S. heartland region, which helped offset the higher per acre costs. • Brazilian producers had higher national average returns per bushel over total costs than the United States in 2021-2022, $4.05 compared with $2.13. An agricultural machine works at a soybean plantation at the Passatempo farm in Sidrolandia, Mato Grosso do Sul state, Brazil. (AP photo/Eraldo Peres) • Improvements in Brazil’s overland transportation infrastructure over the past decade resulted in cost savings per metric ton for exporting soybeans from the main producing state, Mato Grosso, through southern ports. Average inland transport costs in 2017-2018 through 2021-2022 decreased to $77 per metric ton, compared with $98 per metric ton in 2008-2009 to 2012-2013. • Overland transportation improvements in central Brazil to provide access to the northern ports lowered truck rates, resulting in cost savings of $28 per metric ton, further improving Brazil’s Mato Grosso’s competitive position. To assess the relative competitiveness of Brazil and the United States in the global export market, this study compares farm-level production costs, as well as the cost of internal transportation and shipping costs, to a common export destination, Shanghai in China. Soybean production costs are estimated on the costs per planted acre and the costs per bushel. The soybean cost accounts are divided into operating costs and allocated overhead costs. Costs are compared at the national and regional levels for the most productive soybean growing region in each country: the U.S. heartland and Brazil’s Mato Grosso state, the largest soybean producer in Brazil since 2000. For Brazil, the State of Paraná is also included to evaluate inland transportation costs for soybeans exported through southern ports. To make the comparison less sensitive to annual price and yield variations, per-bushel costs and returns are compared using five-year average prices and yields. Brazil’s cost structures were converted to U.S. dollars using yearly changes of real, adjusted for inflation, exchange rates. USDA ERS commodity costs and returns data was used for this study. Costs reflect those incurred through harvest and the prices are the harvest month price received for that marketing year. The heartland region comprises parts or all of Illinois, Indiana, Iowa, Kentucky, Minnesota, Missouri, Nebraska, Ohio and South Dakota. The five-year average cost per bushel is based on production costs for 2021-2022 and average yields and prices for 2017-2018 through 2021-2022. Copyright © 2023 agrinews-pubs.com Please Register or Sign in to view this content Quantum Commodity Intelligence is a premium paid subscription service for professionals in the oil Quantum Biofuels service subscribers have access to: Get in touch with us for subscription information on all Quantum platforms five years was meant to be enough to decide which areas should be declared Amerindian tribal lands the country has 557 indigenous territories covering 13% of its area But more than 100 others are still being considered The delay is causing conflict in long-farmed regions farther south This article appeared in the The Americas section of the print edition under the headline “Farmers v Amerindians” Discover stories from this section and more in the list of contents Just as in the United States, working-class and immigrant voters swung right The Conservatives suffered one of the most astonishing falls from popularity in political history An interview with Evo Morales in his tropical highland stronghold MAGA bombast has upended Canada’s political universe and given Mark Carney’s Liberals an edge Donald Trump and Justin Trudeau’s toxic legacy have pushed Canadians to the centre