By Jake Spring and Maria Carolina Marcello
BRASILIA (Reuters) - Leaders of Brazil's lower house of Congress reached a deal on Wednesday to vote on a land bill seen by some as contributing to deforestation in the Amazon (NASDAQ:AMZN) rain forest and has dozens of European companies threatening to boycott Brazilian exports.
The bill allows squatters on public land to more easily receive deeds to their properties, a policy that environmental advocacy group Imazon warns will accelerate deforestation of up to 16,000 square kilometers in the world's largest rain forest by 2027.
The fate of the bill, which would also require passage by the Senate, is not certain.
Congressman Zé Silva, the author of the bill, and other congressional leaders told Reuters there was an agreement to take a vote on Wednesday.
On Tuesday, over 40 companies including major supermarket Tesco (OTC:TSCDY) and Burger King UK, issued an open letter threatening to boycott Brazilian products if it passes.
Brazilians have been settling the Amazon rain forest for decades, but many lack official deeds, putting them in a legal gray area. Proponents of the bill say granting deeds to settlers will encourage them to comply with laws to curb deforestation.
Environmentalists oppose putting the bill to a vote, saying it will reward the past crimes of illegal land grabbers, who often deforest land to increase its value for agriculture.
"Today the majority of Amazon deforestation is happening on public land," said congressman Rodrigo Agostinho, leader of the environmentalist caucus. "We will keep fighting (the bill)."
The legislation has been considerably diluted since it was initially proposed by right-wing President Jair Bolsonaro, in a move to please farmers, who overwhelmingly supported his 2018 election.
The latest version would fast-track deeds for land settled until 2008 with areas up to roughly 6.6 square kilometers, although the size varies by municipality, according to Richard Torsiano, a former official at the land rights agency Incra.
That is down from up to 16.5 square kilometers in the initial proposal. Lawmakers also removed an earlier provision making more recently settled properties eligible for deeds.