By Peter Murphy
BRASILIA (Reuters) - Brazil's President Dilma Rousseff on Friday vetoed divisive elements of a new law that relaxes the forest cover farmers must preserve on their land, taking a stand against the agricultural lobby that pushed a more lenient version through Congress.
The so-called forest code pits the powerful farming lobby, which wants to ensure that farmers can plant as they see fit on their land, against environmentalists and much of Brazilian society who want landowners who cleared vast swathes of forest illegally to be held accountable.
In all, Rousseff vetoed 12 articles in the law, one of the most controversial pieces of legislation to pass Brazil's Congress in recent years.
Rousseff must now send the bill back to Congress, which could override her vetoes with an absolute majority, meaning over 50 percent of the membership.
Agriculture is a major source of both employment and economic growth, with the country a major producer and exporter of soybeans, sugar, coffee, cotton, oranges and ethanol made from sugarcane.
Green campaigners oppose making changes to the existing land use laws, arguing a new law will let landowners off the hook after clearing vast swathes of land illegally over decades, including in the ecologically rich Amazon rainforest.
With the Rio+20 summit by the United Nations on sustainable development in Rio de Janeiro just weeks away, presidency sources say Rousseff has been burning the midnight oil to weed out the most objectionable parts of the bill and avoid a perception that the government was offering an amnesty those responsible for illegal forest felling.
On Friday, Rousseff effectively overruled the law that legislators close to the farming sector pushed through the lower house of Congress, restoring specific requirements for how much forest must be maintained on the banks of larger rivers to prevent soil erosion and chemical runoff into waterways.
The government plans to provide full details of the vetoes on Monday, Environment Minister Izabella Teixeira and Agriculture Minister Mendes Ribeiro said at a news conference in Brasilia.
Teixeira said the changes restored the original spirit of the law, which emerged from painstaking negotiations between the environment and agriculture ministries.
New elements introduced by the lower house's farming lobby last month could have significantly softened mandatory forest coverage requirements, a prospect that angered environmentalists and sparked demonstrations as well as a "Veto it, Dilma" campaign on social networks.
"All of the principles in the government's proposal have been restored," Teixeira said. "There will be no amnesty."
Rousseff's changes put the onus on larger-scale farmers to replace a larger portion of their missing forest cover, while there would be a sliding scale for small properties, which Teixeira said were less able to spare land for forest cover.
MORE FOOD FROM LESS LAND
Brazil's forest code will continue to require that growers maintain forest coverage equating to 20 percent of the farm's area in much of the southeast, 35 percent in Savannah areas and 80 percent in the hot and humid Amazon.
The new code will soften the requirements of the original law by allowing separate mandatory coverage of hilltops and riversides to count toward this coverage and enable those who cleared land to lease forested land nearby as a substitute.
Environmental campaigners including Greenpeace and the World Wildlife Fund (WWF) said they were disappointed Rousseff did not veto the bill entirely instead of partially, and said details of numerous changes she has made have yet to be made public.
They say the new bill could provide incentives for further illegal deforesting by letting off those who have cleared land until now without authorization and by requiring a lesser amount be restored. They also question whether the government can efficiently enforce the law in a developing country of continental dimensions.
The new bill could be a major set back in their view to the progress Brazil has made in reducing deforestation in the Amazon, where 6,200 square km (2,393 square miles) of forest were illegally felled last year, according to official data, down from a 1995 peak of 29,000 square km.
"President Rousseff's statement today creates an uncertain future for Brazilian forests, considering the Congress could still cut forest protections even further," said Jim Leape, WWF's international director general.
Ribeiro, the agriculture minister, said the bill as it now stood would now likely result in a net loss of the total privately owned area farmers can produce on. However, he said Brazil's steadily rising yields would eventually compensate.
The country's admired public agricultural research institute, Embrapa, has been a key force in raising crop yields and turning the country into the No. 2 producer of soybeans.
"It's obvious that some productive area could be lost. If you look at ... the question of productivity we see that this is increasing along with the area planted because of research which is fundamental in agriculture," Ribeiro said.
(Additional reporting by Maria Carolina Marcello and Ana Flor in Brasilia, and Brian Winter in Sao Paulo; Editing by Lisa Shumaker)