European retailers threaten to stop buying Brazilian commodities – 05/04/2021 – Market

A group of European companies, including Tesco and Marks & Spencer, threatened to stop using Brazilian agricultural commodities if Congress passed a bill that alters land regularization rules on Union lands and the National Institute of Colonization and Agrarian Reform (Incra).

Environmental advocates warn that the proposal would encourage deforestation by rewarding land grabbers who illegally occupy properties in the Amazon rainforest, often cutting down areas for agricultural use.

Proponents of the project say that only by bringing properties into the legal system can they be forced to comply with laws that limit deforestation in the Amazon to 20% of private properties.

Retailers such as Metro and John Lewis, as well as investors like Norway’s largest pension company, KLP, said Brazil’s environmental protections are increasingly inadequate, while the land tenure law could pose even greater risks to the Amazon.

“If this or other measures that undermine these existing protections become laws, we will have no choice but to reconsider our support and use of the Brazilian agricultural commodities supply chain,” wrote European companies in an open letter to Brazilian parliamentarians, released in this Tuesday.

Brazil is the world’s largest exporter of soybeans and beef.

The bill was scheduled to vote in the Senate last week, but has been postponed amid criticism from environmentalists. Congressional leaders said the measure needs further discussion and indicated that it could be put to a vote again this week.

This was the second attempt by the government and allies in Congress to get approval for such a plan. A similar proposal was abandoned in May 2020, after a boycott threat from many of the same companies.

The current bill in the Senate would allow much larger and more recently established properties to receive deeds. The measure comes at a time of testing for the government of President Jair Bolsonaro, after deforestation in the Brazilian Amazon reached a 12-year high in 2020.

Under international pressure led by the United States, Bolsonaro promised at a leadership summit in April to strengthen environmental enforcement and reaffirmed his commitment to ending illegal deforestation by 2030.

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