(Adds ABPA comment in paragraph 11)
By Jake Spring and Anthony Boadle
BRASÍLIA, Jan 18 (Reuters) - Brazil is moving toward a self-monitoring system for food processors, Agriculture Minister Tereza Cristina Dias said on Friday, including meatpackers still recovering from an inspection scandal that hurt trade with key markets.
Dias said in an interview that the South American nation's new business-friendly government plans to send draft legislation on self-monitoring to Congress in the first half of this year.
Self-monitoring, widely used in the United States and other developed countries in Europe, would be introduced gradually across various agricultural products and eventually be used for oversight of meatpackers.
"Why can't Brazil do self-monitoring when Europe and the United States use it?" Dias told Reuters.
Commercial partners banned certain Brazilian meat producers after a federal probe revealed alleged bribery and falsified inspection results in the country's meat exporting industry, the world's largest.
The scandal briefly threatened about $15 billion in exports from Brazil's powerhouse protein industry as markets from China to Europe curtailed shipments of meat pending a review of the South American nation's inspection protocols.
But Dias, a farm lobby congresswoman who was picked to head the agriculture ministry by new far-right President Jair Bolsonaro, adamantly defended the food industry's ability to monitor itself.
"Our agriculture sector can provide guarantees. Just because of one episode we shouldn't demonize Brazil's food industry," she said.
Dias argued that Brazilian multinational companies already use self-monitoring at subsidiaries abroad. Brazil is home to meatpacking giants JBS SA and BRF SA, both of which were implicated in the ongoing food probes.
The federal investigation, which started in 2017 and was expanded last year, is examining relations between food processors, Agriculture Ministry officials and laboratories with a mandate to certify the safety of meat sold domestically and in foreign markets such as China, Japan, the Middle East and Europe.
JBS and BRF declined to comment on the introduction of a self-monitoring system. Meat industry lobby group ABPA said it supports initiatives to strengthen quality controls, without elaborating.
Dias said she could not give specifics on what oversight would remain in the hands of the government since the matter was still under discussion with companies.
Dias said she has not begun talks with the European Union over lifting its ban on Brazilian chicken imports as the Bolsonaro government, which took office on Jan. 1, was still formulating its policies.
The agriculture minister said she may travel to China in February or March, but no date for the trip has been set. Beijing has imposed anti-dumping measures on Brazilian chicken products, which Brasília is trying to get lifted.
Brazil's farm sector is also concerned that Bolsonaro's plan to move the country's Israeli embassy to Jerusalem could hurt halal meat sales to Muslim countries, Dias said. Exports of Halal food, including beef, chicken, honey and cheese, rose to an estimated $5 billion last year.
"Of course, the agricultural sector that I represent is worried," she said, when asked about possible repercussions for trade with Arab countries angered by the foreign policy shift by Brazil, which has traditionally backed a two-state solution to the Israeli-Palestinian conflict.
She said the policy is still being ironed out within Brazil's government and talks are being held with trading partners.
"We have to find a middle ground going forward because Brazil cannot lose markets. What we need is to open new markets," Dias said. (Reporting by Jake Spring and Anthony Boadle; Additional reporting by Ana Mano; Editing by Jeffrey Benkoe and Paul Simao)
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