Lawmakers passed an overhaul of Brazil's forest code on Tuesday that relieves farmers of part of $304-billion (U.S.) in potential costs in one of the world's breadbaskets but that environmentalists say will cause deforestation to surge.
The new law governing land use would reduce the amount of forest that farmers must preserve, relax the conservation of hilltops, and give partial amnesties for massive fines for past deforestation in Latin America's largest country.
The bill, which passed by the lower house of Congress but still must be approved by the Senate and President Dilma Rousseff, should reduce legal uncertainty over the farmers' obligations, which have long been loosely enforced by the government. Brazil's farmers say more flexibility on environmental regulations will help them compete against other big farming nations such as the United States and Argentina.
Environmentalists say the bill gives too much weight to the economic interests of the influential farm lobby and will set back Brazil's recent progress in reducing destruction of the Amazon, the world's largest forest.
Under the bill small-scale land owners, who make up 86 per cent of Brazil's farmers, will be exempt from recovering deforested land. Fines and lawsuits against many farmers will be mostly dropped.
"It's a disaster. It heightens the risk of deforestation, water depletion and erosion," said Paulo Gustavo Prado, head of environmental policy at Conservation International-Brazil.
Mr. Prado estimates the new code will lead to a destruction of 10 per cent of Brazil's remaining vegetation, particularly in the Amazon and northern savanna states Maranhao and Tocantins.
The relaxed rules on clearing hilltops and slopes will put at risk riverheads and other water sources and is likely to fuel soil erosion, Mr. Prado and other environmentalists say.
The current code, which dates to 1965, was advanced for its time, requiring farmers to maintain 35 per cent of their land covered by forest in the cerrado, or savanna, 80 per cent in the Amazon, and 20 per cent elsewhere.
Only about 10 per cent of farmers are estimated to be in compliance with the law. For decades military and civilian governments encouraged people to settle the country's interior and chop down trees to raise cattle and grow food.
Under the current code, farmers would be obliged to reforest around 62.5 million hectares of land at a cost of $304-billion, congressional studies show.
Much like a partial tax amnesty, the proposed law forgives farmers in hopes of achieving better compliance.
Farmers will be allowed to count forest along rivers or lakes toward their legal reserves, reducing the total amount of land to be reforested or protected.
An estimate by one source involved in drafting the bill put the new total liabilities at about $123-billion, still a huge amount for a sector that is just recapitalizing on the back of strong commodity prices.
Farmers argue they need more flexibility in their land use to ensure the international competitiveness of agriculture in Brazil, among the world's largest exporters of soy, beef, coffee, sugar and other key farm commodities.
"None of the world's large farm producers that compete with Brazil - the United States, Europe, China, Argentina and Australia - obliges its producers to preserve any forest. It's not fair ... to reduce our food production to recover forest reserves," farm lobby group CNA said.
Under the new bill farmers and ranchers can opt to buy or lease standing forest within the same biosphere instead of replanting their own land.
They will have 20 years to comply with the new rules and many will have to take out loans to do so.