* Eases rules on amount of forest farmers must preserve
* Millions of hectares to be reforested under new rules
* Farm lobby defeats Rousseff gov't, which opposed final
* Rousseff may veto the bill, could spark fight with
By Maria Carolina Marcello and Peter Murphy
BRASILIA, April 26 Brazil's Congress voted late
on Wednesday to ease rules mandating the amount of forest
farmers must keep on their land, delivering a long-sought
victory to the country's powerful agriculture lobby and a
political defeat for President Dilma Rousseff.
Though the bill will require millions of hectares of already
cleared land to be replanted, environmentalists say it makes it
too easy for farmers, responsible for much of the deforestation
of the Amazon and other swaths of environmentally sensitive land
in recent decades, to comply with regulations that stipulate how
much forest they must preserve.
Rousseff still has the option to veto the bill, one of the
most controversial to pass Brazil's Congress in recent years.
The bill was supported by some of her party's lawmakers and
members of its multi-party coalition, even though the president
had previously vowed to veto earlier versions of the law that
contained provisions perceived as too lenient on farmers who
have cleared woodlands to make way for crops.
The final law, which was changed dramatically from a
hard-bargained version her government was backing, will leave it
up to federal states to decide how much forest needs to be
replaced along riversides, making it possible for big farming
states to make only minimal demands of growers.
"The approved bill gives a total and unrestricted amnesty to
those who deforested ... and goes against what the government
itself had wanted," environmental group Greenpeace said in a
statement. "If (Rousseff) doesn't react and veto this text, this
future will be her legacy," it said.
Pushing through the more lenient language the farming lobby
sought was only possible through a rebellion by lawmakers from
within the government coalition.
A big enough majority in Congress could also knock down a
veto by Rousseff should she choose to use it.
"We lost. The government lost," said the leader of
Rousseff's Workers Party in the lower house of Congress. The
powerful farming lobby in Congress had fought hard to minimize
obligations the new law would impose on them.
FARMING VS FOREST
The bill and its likely future impact have been watched
closely in and outside Brazil, home to the world's biggest
rainforest and a country considered a reference for how other
developing nations manage their woodlands.
In June, Brazil will host the Rio+20 summit, a meeting at
which government leaders and policymakers from around the world
will discuss global environmental policy.
Head of the national agriculture confederation, Katia Abreu,
defended the new law, saying it did "not necessarily" mean
states would impose softer rules than the central government
would have on mandatory riverside forest coverage. She said it
would also enable better made-to-measure rules to be set
according to each region's characteristics.
But Abreu hinted the new rules would be less rigid, pointing
out farmers would have been obliged under the previous bill to
replant 30 million hectares (74 million acres) of forest and
sacrifice land on which they grew billions of dollars worth of
crops. She said it would only be possible to know how much would
now have to be replaced after states had set rules on this.
A technician involved in designing the law told Reuters one
drawback of allowing individual states to regulate it was that
the process would probably take a year or two. That means
replanting would likely be delayed until clear rules were made.
Deforestation in Brazil has slowed in recent years because
of greater law enforcement and the use of satellite imagery to
track areas with the most troubling rates of clearcutting.
A key provision of the forest code, as it is known, would
allow landowners to count woodland on river margins, hilltops
and steep inclines towards a total proportion of forest that
must be preserved on their land. At present, such land isn't
allowed in their calculation.
Farmers argue that uncertainty over existing legislation,
which has effectively been suspended in recent years, impeded
investments. And Brazil's growing output of food crops - and
enviable position as an agricultural powerhouse - could face
setbacks if growers continue to be held back by doubts about how
they can use their land.
Brazil is the world's top producer of coffee, sugar, beef
and orange juice and a major producer of soy and corn.
Agriculture accounts for more than 5 percent of Brazil's GDP.
Environmentalists say farmers would have to reforest land
equivalent to the combined area of Germany, Austria and Italy to
fully comply with existing regulations. Advocates of the new
bill, however, say it would still result in a net gain of
millions of hectares of forest coverage.
Under the terms of the new bill, growers must sign up for a
reforestation program that will use satellites to track
compliance. Producers falling foul of the new law could be cut
off from rural finance.
One government official estimated last year that 24 million
hectares (59 million acres), roughly an area the size of the
United Kingdom, would be reforested as a result of the new code.
But experts say the area to be replanted will be difficult to
gauge until more data is collected about rural properties.
(Writing by Peter Murphy; Editing by Paulo Prada and Eric