Environmental law in Brazil: Compromise or deadlock? BRAZIL'S gridlocked Congress often ends up passing contentious laws only after the combatants collapse in exhaustion. So it is with the revision of the Forest Code, a set of rules that, despite the name, apply to all privately owned rural land, not just plots in wooded areas. The code, originally approved in 1965, requires owners to keep native vegetation on parts of their land - 80% in the Amazon, less elsewhere - and in erosion-prone and biodiverse areas such as riverbanks and mangrove swamps. But it was long ignored. Since harsher penalties and enforcement were introduced in the late 1990s the ruralistas, as Brazil's powerful farming lobby is known, have been trying to revise the code. On April 25th, after 13 years of arguments, rewrites and stalling, the final text landed on the desk of the president, Dilma Rousseff. It was far from the version she wanted. Two government defeats in the ruralista-packed lower house meant it contained few of her own previous revisions or those of the more green-friendly Senate. The president faced a difficult choice: to scrap the text and start again - which would probably be taken as a declaration of war by the ruralistas - or to make the best of a bad job. She chose the latter. On May 25th ministers went to Congress to say that the president would veto 12 of the new code's 84 articles and make 32 smaller cuts. The resulting holes would be backfilled in a separate executive decree. Only on May 28th were the details published. The result is legally complex, perhaps inevitably (see table for a summary). The code is trying to do too many different things: to regulate land use, and to halt deforestation in the Amazon while freeing farmers elsewhere to carry out their business. The original Forest Code was pioneering in some ways. Requiring farmers to set aside part of their land for natural vegetation looks odd to foreign eyes, used to governments holding pristine land as national parks and letting private owners do as they wish. But allowing settlers to open up some land in return for protecting more had its merits in a vast country with limited state resources. Sadly, the code was only enforced patchily on the Amazon frontier, while never making much sense for old-established farms in southern and south-eastern Brazil. That flaw remains. The new law still treats long-cultivated and recently cleared land in the same way. In particular, environmentalists worried that Congress's version of the law amounted to carte blanche for the chainsaw. Merely by signing up to a leisurely process of making good, any landowners who had violated the code before July 2008 would be regarded as in compliance. Under Ms Rousseff's veto, the amnesty sought by ruralistas will apply only to smallholders, who will still have to replant 20% of their plots. Everyone else will have five years to right past wrongs and add their properties to a new Rural Environmental Register. Holdouts will be denied bank loans and face prosecution. Rubens Ricupero, one of ten former environment ministers consulted by the president before the veto, praises her attempt to strike a balance. Treating small landowners more leniently was both practical, he thinks - they account for 90% of rural properties by number but just 24% by area - and socially just: few could afford much replanting. It also showed up the ruralistas" bad faith, he says, in claiming to be acting to protect small farmers when the president had long since promised to exempt them. But the president's decision to shrink protected areas around rivers frustrated greens. The previous rules were based on scientific assessments of what was needed to protect riverbanks from erosion and provide wildlife corridors, says Kenzo Jucá of WWF-Brasil. Though the new law should lead to some reforestation, this is merely a one-off requirement for signing up to the Rural Environmental Register. The new code's tortuous evolution means it is poorly drafted and in places ambiguous, says Roberto Smeraldi of Amigos da Terra, a Brazilian NGO. He sees deadlock rather than compromise. Polls suggested voters favoured taking a hard line with the ruralistas. Pro-veto petitions attracted many signatures. But the ruralistas are the largest cross-party block in Congress, and that limited the president's room for manoeuvre. Greens in the Senate had included tax rebates and cheap loans for farmers who reforested degraded areas faster than the law required, or who preserved more land than the bare minimum. They also wanted direct payments for those who conserved water or protected biodiversity. But these provisions to promote sustainable farming were stripped out by the lower house. That was a pity: clever financial incentives can cut deforestation dramatically. A recent analysis by the Climate Policy Initiative (CPI), a green think-tank, concluded that only around half of the 75% drop in annual deforestation in Brazil since 2004 was caused by lower world prices for beef and soya and a stronger currency, both of which cut incentives to clear land. The rest it attributed to government action, including a decision in 2008 to withhold farm loans in the municipalities where deforestation was highest. "Such policies clearly changed the way deforestation responds to price signals," says Juliano Assunção, director of CPI's Rio de Janeiro branch. Senator Katia Abreu, the farmers" leader, insists that her members oppose deforestation in the Amazon. Her members say that the new code will see farm output and profits fall elsewhere. Nevertheless, the ruralistas will probably not attempt to overturn the president's veto in Congress (this would require an absolute majority of legislators in a joint session of both houses). But they may try to alter the text of the accompanying executive decree. Meanwhile, greens are threatening a constitutional challenge to the law. The new Forest Code will probably end up in its current form, or something very close to it. That is a missed opportunity. "If we really want to manage our environmental capital, we need a new generation of laws," says Mr Smeraldi.