Brazil Senate Approves R$10 Billion Plan to Decouple Agriculture from Fertilizer Imports

Brazil’s Senate finalized approval of a major industrial policy this week, signing off on a bill that establishes a R$10 billion (approximately $1.85 billion) tax incentive program aimed at reducing the country’s crippling reliance on foreign fertilizer supply. The legislation, known as the Program for the Development of the Fertilizer Industry (Profert, or PL 699/2023), addresses a structural vulnerability in Brazilian agriculture: its need to import over 80% of the fertilizers it consumes annually. As a result, the bill now moves to the Presidency for sanction, marking a pivotal moment in the country’s strategy to achieve greater self-sufficiency in one of the world’s largest and most crucial farming economies.

The dependency on imported farm inputs has been a growing concern, particularly since recent geopolitical events underscored the risk of disruption to global supply chains. Brazil is a top-three global exporter of commodities like soybeans, corn, and sugar, and its massive agribusiness sector consumes an estimated 8% of the world’s total fertilizer supply. For certain nutrients, like potassium, dependency is near total, reaching as high as 97%. This structural deficit leaves Brazil’s food production highly exposed to price spikes and shortages caused by global tensions or trade disputes.

The Profert program seeks to change this reality by offering federal tax credits as a subsidy to domestic producers who invest in new fertilizer plants or expand and modernize existing ones. The total incentive is capped at R$10 billion over a five-year period, running from 2027 to 2031, with an annual limit of R$2 billion. The bill was introduced by Senator Laércio Oliveira and championed in the Senate by rapporteur and former Agriculture Minister Tereza Cristina, signaling broad political support for the measure as a strategic necessity. The incentives cover a range of products, including conventional fertilizers like urea and potash, as well as bio-inputs.

Beyond the fiscal credits, the legislation introduces concrete steps to spur the domestic chemical sector, including the creation of a National Fertilizer Production Incentive Fund and the authorization for the Brazilian Development Bank (BNDES) to finance sector projects. It also sets a long-term goal of increasing domestic content in farm inputs by establishing minimum mixing requirements: starting in 2027, fertilizers sold in Brazil must contain at least 2% of domestically produced inputs, a share intended to rise to 10% by 2037. The policy represents a decade-long strategic effort to transform Brazil's dependency into a competitive domestic industry, ensuring greater stability for the country’s agricultural output and, by extension, global food supply.