The Senate moves forward with an incentive program for fertilizers, focusing on domestic production.
The Federal Senate took an important step last Tuesday (August 11) by symbolically approving the Fertilizer Industry Development Program, known as Profert. The initiative, which had already passed the Chamber of Deputies, now heads to President Luiz Inácio Lula da Silva (PT) for sanction, marking a significant advance in policies aimed at fostering agribusiness and domestic industry.
The bill, sponsored by Senator Tereza Cristina (PP-MS), is centered on reducing Brazil’s dependence on imported inputs, strengthening food security, and optimizing the agricultural production chain. The intention is to guarantee a more stable and accessible supply of fertilizers and their essential raw materials for the country’s agricultural production.
Incentives Focused on Domestic Production
Profert aims to directly benefit companies that invest in the local production of a wide range of agricultural inputs. This includes synthetic, mineral, and organic fertilizers, as well as remineralizers, bio-inputs, and biofertilizers. The program establishes clear criteria for participation, with the goal of boosting Brazil’s productive capacity and generating added value domestically.
However, it is important to note that companies opting for the Simples Nacional tax regime will not be eligible to participate in Profert. This exclusion aims to direct incentives toward companies with structures and production volumes compatible with the program’s industrial development objectives.
Regulations and Mandatory Blending Targets
The regulation of Profert will define the procedures for qualification and co-qualification, establishing minimum requirements for participating companies. These requirements will cover not only productive capacity but also a commitment to local development, social inclusion, and the adoption of environmentally responsible practices, including the mitigation of greenhouse gas emissions.
One of the program’s crucial points is the definition, by the National Council for Fertilizers and Plant Nutrition (Confert), of a mandatory blending percentage for fertilizers produced in Brazil. The initial target is set at 2% starting in July 2027, with a progressive increase to 10% by January 2037, and the potential to reach 30%. This measure seeks to create a captive market for domestic production.
Amendments and Exclusions to the Original Bill
Senator Tereza Cristina implemented some changes to the original text, aligning with the perspective that certain aspects of the program could be better addressed in complementary bills currently being processed in the Chamber of Deputies. For this reason, specific lists of fertilizers eligible for tax credits were excluded, as were provisions that foresaw emergency financial credits for 2026 due to the impacts of the conflict in the Middle East. The rapporteur justified these exclusions by stating that they dealt with issues of temporality and were merely authorizing in nature.
Additionally, an article authorizing the creation of a specific public fund to stimulate domestic fertilizer production (FPNF), with budgetary allocations, was removed. The decision to remove this section was made due to concerns about the constitutionality of the measure, indicating the legislature’s caution in ensuring the legality of its actions.
The approval of Profert represents a strategic move by Brazil to strengthen its autonomy in the fertilizer sector, a vital input for its thriving agriculture. The changes introduced in the bill seek to optimize its applicability and ensure that the incentives promote sustainable and constitutionally sound development for domestic industry.
