President Lula signs Profert to boost domestic fertilizer production, aiming to reduce foreign dependency, while issuing a veto that increases flexibility regarding the origin of inputs.
President Luiz Inácio Lula da Silva signed legislation on Friday, September 4, establishing the Fertilizer Industry Development Program, known as Profert. The measure, which includes a presidential veto, is a strategic move to strengthen domestic fertilizer production and reduce Brazil’s significant reliance on agricultural input imports.
The most significant aspect of the sanction is the decision to veto a key provision. The original proposal aimed to limit the program’s benefits exclusively to fertilizers extracted and produced entirely within Brazil, a requirement that was modified by the head of the Executive branch. This veto seeks to balance the need to promote local industry with the flexibility required to ensure market supply.
Profert and its Pillars for Agricultural Independence
The core of Profert is to boost the country’s fertilizer industry, which is essential for food security and the growth of the agricultural sector. By mitigating dependence on foreign markets, Brazil seeks greater stability and resilience in its production chain.
The removal of the restriction regarding the origin of fertilizers, justified as being “contrary to the public interest” and potentially conflicting with other legal provisions, allows products mixed with national fertilizers to also be considered eligible for the program.
The measure seeks a balance between valuing domestic production and the need for flexibility to ensure the supply and competitiveness of inputs in the domestic market.
A Gradual Path and Program Requirements
The law establishes a transition period for mandatory fertilizer blending. Starting in July 2027, a minimum of 2% of national inputs must be incorporated, increasing progressively until reaching 10% by January 2037.
The National Council for Fertilizers and Plant Nutrition (Confert) will be the body responsible for defining the annual increase in this percentage, ensuring the industry adapts gradually. To join Profert, companies must meet requirements such as adopting energy efficiency measures and supporting local development and social inclusion initiatives.
Financing and Synergy with Natural Gas Policy
Financial support for Profert will be vital. The National Bank for Economic and Social Development (BNDES) and other institutions accredited by the development bank will offer the necessary credit lines for investments in the fertilizer industry.
The legislative process for the bill was concluded in August in the Federal Senate, maintaining the version approved by the Chamber of Deputies. This version included tax relief for natural gas when used as a raw material in fertilizer production, a crucial incentive for the sector.
Additionally, the fertilizer segment was classified as one of the three priority targets for the marketing policy of natural gas from the federal government’s share of pre-salt fields. This directive was established by the National Energy Policy Council (CNPE) in late July, reinforcing the interconnection between the country’s energy and agricultural policies.
The sanctioning of Profert marks a strategic moment for Brazil, aiming for greater autonomy in fertilizer production, a pillar for the sustainability and competitiveness of national agribusiness. The gradual implementation, financial support from BNDES, and integration with natural gas energy policy are key elements shaping the future of the agricultural input industry in the country, promising a scenario of reduced dependency and greater production robustness.
