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UPDATE 1-Lula: no need to fell a single tree to boost Brazil farm output

(Adds quotes, context)

By Lisandra Paraguassu

SAO PAULO, Aug 22 (Reuters) - Brazil's presidential frontrunner Luiz Inacio Lula da Silva said on Monday his country did not need to cut a single tree to plant more soybeans, sugarcane or raise cattle as he vowed to restore law enforcement in the Amazon rainforest to curb deforestation.

His remarks came as Reuters reported last week that advisors to the leftist former president were proposing subsidized "green" farm loans to spur planting of soybeans and corn on open pasture and reduce deforestation in the Amazon.

"If the world is willing to help, keeping a tree standing in the Amazon may be worth more than any (other) investment," Lula told foreign correspondents in Sao Paulo.

Lula said he would end illegal gold mining that has surged in the Brazilian Amazon under far-right President Jair Bolsonaro, who is seeking re-election in the October polls.

"Brazil will look after the climate issue like never before. We want to be responsible for maintaining the climate," he said.

If elected, his government would reinforce the federal police and restore institutions weakened by Bolsonaro that are needed to contain deforestation in the Amazon, such as environmental protection agency Ibama, he said.

Lula pledged to create a ministry for indigenous affairs, saying indigenous people would do more to preserve the rainforest if they had more authority.

When asked about a free trade agreement negotiated between the South American trade bloc Mercosur and the European Union, which has been stalled by environmental concerns in Brussels, Lula said Brasil should be in no hurry to ratify the pact.

"We don't have to rush into a final EU deal," he said, arguing that terms can be "adjusted" to benefit all sides.

Lula favors reopening talks on the agreement, which has taken two decades to negotiate, adding provisions on the environment, human rights and technology, his top foreign policy adviser Celso Amorim told Reuters last month.

"We cannot give up government procurement because the state would stop being a driver of economic development," he said on Monday, advocating the need for a strong state role as catalyst for private investment, while respecting fiscal discipline. (Reporting by Lisandra Paraguassu; Writing by Anthony Boadle and Gabriel Araujo; Editing by Brad Haynes and Tomasz Janowski)

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