South America Calling

On May 25, 2012, Brazil's Congress passed a new Forestry Code, hailed as the basis for a new era of more environmentally sustainable farming across the country's vast hinterlands.

But one year on, the code has yet to be implemented, raising fears that this may be a false dawn.

"The farm community are taking this legislation seriously ... But there are many difficulties to be overcome before it is implemented," said Adolfo Dalla Pria, an agriculture conservation specialist at The Nature Conservancy (TNC), an environmental non-governmental organization.

The code attracted protests from some environmentalists, who said it amounted to an amnesty for deforesters of the Amazon.

Indeed the law did lift the obligation for farmers to replant illegally cleared forest and scrub in Mato Grosso and other Cerrado highland regions. But the tradeoff was alluring.

By offering farmers realistic and sustainable ways of complying with environmental rules, the code promised a future where Brazil's environmental rules were properly enforced and respected.

"The new Forestry Code gives us the chance to create sustainable farming," said Samanta Pineda, environmental lawyer at Pineda & Krahn, a law firm.

In order to understand the importance of this legislation to Brazilian grain farming, first we need some context.

The explosion in soybean production across Mato Grosso in the 1990s and early part of the 2000s was an important driver in the growth in Amazon forest clearance.

The resulting global environmental outcry led to a clampdown by authorities and a very successful industry-led moratorium of Amazon soy purchases, which has resulted in a 93% decline in deforestation in Mato Grosso from 2004 to 2012.

However, the specter of past crimes still hung over producers.

Brazilian environmental laws are tight and, uniquely among major agricultural nations, put the responsibility of preserving habitat on landowners. Implementation was lax until the early 2000s and farmers paid little regard.

Things changed around 2004 and environmental authorities started fining farmers heavily. This was a problem as Mato Grosso's producers were no longer frontier men armed only with a tractor and a dream but owners of multimillion-dollar businesses. The farm industry needed to clear these environmental liabilities, if they were to attract the financing necessary to expand and meet surging international demand for their soy and corn.

The new Forestry Code offers farmers a way of settling those past debts. If they comply over the next 20 years, they can convert past environmental fines into environmental services.

It sounds terrific in theory. In practice, a big question mark remains over whether Brazil's government has the capacity to implement it.

"We have enormous challenges ahead of us. It will not be easy," admitted Paulo Cabral, sustainable rural development secretary at the Environment Ministry.

After a year, some 20 pieces of law vital for the code's implementation are still to be regulated.

Regulations for the vital first step, the creation of a land registry, are only due to be published this week.

The creation of the registry is a huge undertaking, involving the mapping of 5.2 million rural properties and all the disputes that entails. But the legislation only gives state and municipal authorities one year to complete this task.

"It is difficult to see how the state and municipal authorities can complete this in time," said TNC's Pria, noting organizations across the country are already overwhelmed with demands.

The next stage is for farmers to submit a plan to comply with rules on preserving environmentally sensitive parts of properties, such as riverbanks and hills, as well as creating a legal nature reserve for the farm.

That plan must be submitted and approved in two years. Again, that is a tall order because of the volume involved and the intricate nature of the plans.

Under the rules, farmers must create a legal nature reserve equivalent to 80% of the property if it is located in the Amazon, 35% in Cerrado highland regions of the Amazon and 20% elsewhere. However, if the farmer can prove he established the farm back when the limit was 20% for the Cerrado, that level remains.

In addition, farmers must preserve habitat between 5 to 100 meters from a riverbank, depending on the size of the river and the property. Similar rules apply to hilltops and other sensitive regions.

In total, between 25 million and 45 million hectares (62 million to 111 million acres) must be recovered over the next decade, the Environmental Ministry estimates.

Originally, the government pledged to help finance this project, but that undertaking vanished in the final text of the code.

Another question mark is the consistency of the implementation of rules. A lack of coordination and very heavy red tape means it is not uncommon for environmental organizations to take years to issue licenses.

"I have a plot that has been pending registration since 2005. There is no guarantee that this kind of thing won't happen under the new code," said Eduardo Godoi, farmer and agronomist at the Mato Grosso Agricultural Federation (FAMATO).

Farmers hope these problems can be overcome because the code offers substantial upsides.

For example, the new code allows farmers to create legal reserves outside their properties. That means planted area can be preserved and opens the possibility that farmers can acquire reserves on exchanges, at last allowing landowners to earn money from preserving nature.

It will also reduce the environmental pressure as Brazilian grain production expands across the Cerrado over the next decade, making the sector more attractive to investors.

The Forestry Code is the most sophisticated piece of environmental legislation on the planet. The question is, will it be enforced as intended or become another Brazilian law that didn't stick.

(AG)

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