Aug 04, 2016

Enforcement of Brazil's Forestry Code is very Contentious

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

A recent decision by the Brazilian Supreme Court reaffirmed the requirement that Brazilian landowners must register their property with the federal government and indicate which areas they will reforest in order to comply with the new Forestry Code. This has been an extremely contentious issue in Brazil since the new Forestry Code Law was passed by the Brazilian Congress on May 25, 2012. The Forestry Code requires that landowners reforest any areas that may have been cleared illegally, even if the clearing was done decades ago.

The Forestry Code requires farmers and ranchers to reforest those areas that were cleared illegally. Restriction on the amount of virgin land that could be cleared were put in place several decades ago, but they were widely ignored as farmers and ranchers pushed into central Brazil in search of more land for grain and livestock production. Even though the restrictions were on the books, there was virtually no effort at enforcement.

The original restrictions on how much land that could be cleared depended on the type of native vegetation that was originally present. If the original vegetation was what is called low-cerrado, which is basically a grassland, 20% of that original vegetation was required to be left in its native state. The percentage of land that must be set-aside and not cleared increased as the native vegetation became larger. It topped out with rain forest vegetation which required that 80% of that type of vegetation be left in its original state.

Land that was cleared and settled before the new restriction took affect is exempt for the new regulations. In order to qualify for the exemptions, landowners must produce documentation as to when the land was cleared. The documentation could include such things as land titles, sales records, contracts, rental agreements, etc.

Brazilian farmers and ranchers are now required to indicate what part of their property will be reforested and become what is classified as the Legal Reserve. This Legal Reserve must correspond to the percentage of the land that should have been left in its original native vegetation.

Now that the Brazilian Supreme Court has reaffirmed the requirements of the Forestry Code, enforcement action is starting to take place. In early July, the Public Minister (MP) for the state of Sao Paulo started civil litigation against a farmer who had cleared essentially all of his property to plant sugarcane, but had not indicated the 20% of his property that will be reforested and become the Legal Reserve. The landowner is contesting the order because he indicated that the land was cleared before the Forestry Code too affect in 2012 and that retroactively enforcing regulations that are decades is illegal.

These type of legal battles are certain to expand as more enforcement action is undertaken.