Illegal Deforestation in Mato Grosso: How Loopholes in Implementing Brazil’s Forest Code Endanger the Soy Sector

Brazil’s Forest Code (FC) is a landmark law that, despite dating back to the 1930s, has low compliance. Illegal deforestation continues, and millions of hectares that were set to be reforested remain degraded. Although sector agreements such as the Amazon Soy Moratorium (ASM) have been important in the fight against deforestation, the implementation of the FC represents the key long-term strategy to halt deforestation in the soy supply chain. Here, we used datasets of the boundaries of rural properties, deforestation permits, environmental licensing, and land cover in Mato Grosso to quantify illegal deforestation and analyzed compliance with the Forest Code (FC) on soy farms to explore how loopholes in the implementation of the FC allow deforestation to continue unabated. Our analyses show that between August 2009 and July 2019, soy farms in Mato Grosso State, the largest Brazilian soy producer, were responsible for 15% (or 468.1 thousand hectares) of all land cleared in registered properties. Half of this deforestation was illegal. The FC implementation within these properties has been slow: only 11% of registered soy farms have made it to the final stage of the registration process, thus being considered fully compliant. This novel analysis reinforces that accelerating the implementation of the FC could significantly reduce deforestation and advance the restoration of illegally cleared land particularly in the Cerrado, where 50% of the original cover has already been lost, as well as in the Amazon. By achieving full compliance in the soy sector, Brazil’s position in the international market would be strengthened as a supplier of sustainably produced, deforestation-free commodities.