SAO PAULO, Jan 10 (Reuters) - The Brazilian Supreme

Court is ready to rule on a request challenging a state law that

ends tax breaks for grain traders banning soy purchases from

deforested areas of the Amazon rainforest after a cut-off date.

The legislation was passed by the country's top

soy-producing state Mato Grosso but was prevented by Justice

Flavio Dino from going into effect on Jan. 1 until a final

decision is made.

The top court will rule on the matter between Feb 14-21,

according to a notice released on Friday.

The voluntary pact among major grain traders, known as soy

moratorium, bans the purchase of soy from deforested areas of

the Amazon rainforest after 2008. Though it is praised by

conservationists, it has been under growing pressure.

On Friday, Mato Grosso farmer lobby Aprosoja-MT, which is

not a party to the Supreme Court proceedings, said it would

request admission as "amicus curiae" to offer information

relevant for the case.

In December, the farmer group asked Brazil's antitrust

agency CADE to investigate soy moratorium signatories, claiming

they behave as a "purchasing cartel to practice a collective

boycott... against soy farmers."

Soy lobby group Abiove dismissed such a claim, saying the

moratorium strengthens Brazilian agriculture.

Abiove said it defends the soy moratorium while "striving to

balance the demands of both farmers and consumers, including

updates to the current model to ensure its effectiveness."

However, it conceded state lawmakers have pushed legislation

"that significantly harm the signatories of the Soy Moratorium."

Under Brazil's forestry rules, Amazon landowners can clear

up to 20% of their property. But while some farmers are still

eligible to suppress vegetation, they feel constrained by the

moratorium.

Last month, it emerged grain traders could loosen the

moratorium by distinguishing between individual soy fields,

letting growers sell to exporters from one part of a farm while

planting soy on newly deforested areas nearby.