By Ana Mano and Ricardo Brito

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.

(Reporting by Ana Mano and Ricardo Brito, additional reporting Roberto Samora; Editing by Alistair Bell)

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