FILE PHOTO: A drone view shows a rural cemetery surrounded by a soy field where soybean farming expanded in the Amazon, in Belterra, Para state, Brazil October 8, 2024. REUTERS/Amanda Perobelli/File Photo
FILE PHOTO: Brazil's anti monopoly watchdog Cade headquarters building is pictured in Brasilia, Brazil, August 7, 2017. REUTERS/Adriano Machado/File Photo

By Ana Mano

SAO PAULO (Reuters) -Brazil's competition authority CADE has given grain traders in the world's largest soybean exporter 10 days to suspend a program called "soy moratorium" or face hefty fines, in a ruling seen by Reuters on Monday.

The two-decade-old private pact seeks to protect the Amazon rainforest, by barring soybean traders from buying from farmers who cleared land there after July 2008, but it represents a potential breach of Brazilian competition law.

In his signed decision, the agency's general superintendent Alexandre Barreto de Souza called for a full investigation into the signatories of the voluntary corporate program in which companies share commercially sensitive information.

Firms wishing to apply soy moratorium criteria to buy soybeans grown in the Amazon "must do so independently and in accordance with national legislation," he wrote.

However, environmental group Greenpeace said the ruling was the result of pressure from the farm lobby, compromising nearly two decades of progress.

"By suspending the moratorium, CADE not only encourages deforestation but also silences consumers' right to choose products that do not contribute to the devastation of the Amazon," it said in a statement after the ruling was issued.

The attacks on the pact "are political and favor precisely those who profit most from the destruction of the Amazon," it added.

CADE's decision to suspend the program was "historic", said farmer group Aprosoja Mato Grosso.

"For years, a private agreement without legal support has been imposing unfair trade barriers on farmers ... preventing the sale of crops grown in regular and licensed areas," it said in a statement.

De Souza has given soy buyers and trade groups Anec and Abiove, which represent global grain handlers such as ADM, Bunge, Cargill, Louis Dreyfus and Cofco, 10 days to comply with the ruling.

CADE's stance on the moratorium is "extremely worrisome" and will be appealed, Anec, which represents grain exporters, said in a statement, however.

The program should stand as it is "a multi-sector pact" backed by civil society, the environment ministry and Brazil's environment agency Ibama, it added.

Abiove, which represents oilseeds crushers, said it was "surprised" at the recommendation for a full-blown probe and imposition of preventive measures, adding in a statement that it would take steps to prove the pact was legal.

CADE's preventive measures must be adopted by the soy moratorium's working group, including Anec and Abiove, and 30 grain companies that have signed up to the program, the ruling showed.

It also ordered soy exporters to refrain from collecting, sharing, storing and disseminating commercially sensitive information related to the soy trade and the farmers with whom they do business.

The order calls for the withdrawal of all soy moratorium information and related online publicity.

(Reporting by Ana Mano; Editing by Leslie Adler and Clarence Fernandez)