Brazil's Top Court Backs Soy Moratorium, Rejects Farmer Claims

Brazil's Supreme Court has formed a majority ruling that the soy moratorium — a voluntary agreement preventing grain traders from purchasing soybeans grown on land deforested after 2008 — is legal. The decision, reached on Wednesday, exempts trading companies and processors from paying the billions of reais in compensation sought by farmers.

Farmers had challenged the pact, arguing that it functioned as a cartel by imposing commercial restrictions on their activities. The court rejected these claims, clearing the companies of any liability for damages.

In a related ruling, the justices also found that state laws revoking tax incentives for companies participating in the moratorium are constitutional. This follows a move by Mato Grosso, Brazil's largest soy-producing state, which led several trading firms to withdraw from the agreement last year.

The withdrawals drew criticism from environmentalists, who credit the moratorium with helping to slow deforestation in the Amazon rainforest. The court's decision affirms the legality of the pact while allowing states to maintain their own incentive policies.