Brazil's Senate passed a controversial forestry bill sought by the powerful growers and ranchers of the country's vast interior—and opposed by activists who say it would quicken illegal deforestation in the Amazon forest and other wilds.

The new forest code would reduce the amount of forest preserves farmers are required to keep when deforesting land, and pardon some past illegal deforestation among other measures. The bill must be reconciled with another version if it passed in the lower house of Congress in May, and then signed by the president to become law.

The bill is the single biggest piece of legislation to hit the Brazilian Congress during the first year of President Dilma Rousseff's four-year term, and brings into relief concerns about the environmental costs of Brazil's strategy to employ its vast natural resources to drive economic growth.

Once the bill passes the senate, it must be ratified in the chamber of deputies, where it was approved earlier in the year. Analysts expect it to reach Ms. Rousseff's desk early next year.

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