Brazil Farmers Split From Traders Over Amazon Protection Efforts

(Bloomberg) -- Rising scrutiny over agriculture's role in Amazon deforestation is dividing soybean farmers and trading houses.

Aprosoja, the top farmer group in Brazil, is splitting from Abag, which represents agribusiness stakeholders including trading houses like China's Cofco and Cargill Inc., suppliers such as Deere & Co. and lenders like Rabobank.

Soybean growers are ending a more than decade-old partnership with the country's main agribusiness association after Abag joined environmentalists in a group that's been pressuring the government to take action against deforestation.

That group, formed by 250 companies and organizations and known as Coalizao Brasil, sent a letter to the federal government in July stating that negative environmental perceptions are potentially damaging to both reputation and business prospects. Last month, Coalizao Brasil sent proposals to fight deforestation and improve controls.

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“Abag doesn't know the field's position on this. It knows about business as it represents trading companies, big industries and banks. Farmers are not represented by this group,” Bartolomeu Braz Pereira, head of Aprosoja, said in a telephone interview. “They are giving more voice to environmentalists than to us.”

A push for zero-deforestation in the Amazon is an example of “unnecessary” actions supported by Abag, he said. Current rules allow farmers to deforest as much as 20% of their properties in the biome. Abag members “don't like the government and are helping to jeopardize its reputation,” the Aprosoja head said.

The rupture between two of the most influential agriculture groups in Brazil reflects growing divisions surrounding far-right Brazilian President Jair Bolsonaro's defense of opening up the world's largest rainforest to further development.

In contrast to farmers' statements, Abag says it doesn't support zero-deforestation in the Amazon. Rather, it's in favor of punishing illegal deforestation. Agribusiness is under mounting pressure from customers and investors to play a more active role in protecting the Amazon.

“We have always supported and will always support farmers, including soybean producers,” said Marcello Brito, Abag's president. In a note, the group said it regrets farmers' departure from the debate.

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