Brazil Senate Passes Profert to Cut Fertilizer Import Dependency

The Brazilian Senate this week approved a critical bill creating the Program for the Development of the Fertilizer Industry, known as Profert, which is designed to reduce the country’s high reliance on imported agricultural inputs. The approval of the bill, which establishes a framework for tax incentives and financing for domestic producers, sends the measure to President Luiz Inácio Lula da Silva for sanction. Profert’s central goal is to address a strategic national vulnerability: Brazil, a global food powerhouse, imports more than 80% of the fertilizers it uses to power its massive soybean, corn, and sugar cane harvests, a dependency that makes its vital agribusiness sector highly sensitive to global supply chain shocks and geopolitical conflict.

That vulnerability became acutely clear following international crises that sent fertilizer prices soaring and exposed the agricultural sector to supply interruptions. With fertilizers accounting for more than 20% of the production costs for major crops, a reliable domestic supply is considered essential for both food security and economic stability in Brazil. The new program, which the legislature has been advancing for over a year, aims to spur investment in new and modernized domestic production of nitrogen, phosphorus, and potassium—the three main components of agricultural fertilizers—as well as bio-inputs and raw materials.

Profert’s mechanism is two-fold: it grants federal tax credits for companies that invest in new or expanded fertilizer plants in Brazil, and it authorizes the use of financing lines from the state-owned Brazilian Development Bank (BNDES) for these projects. To ensure the fiscal measure aligns with government spending rules, lawmakers struck an earlier provision that would have capped the fiscal incentives at R$10 billion (approximately US$1.95 billion) over five years. Instead, the final text approved by the Senate removes the specific monetary amount, deferring the total value of the fiscal credit to be set later by the Executive Branch through regulation. This last-minute change was the result of negotiations between the government’s economic team and the Congress.

The law now heads to the presidential office, where its sanction by President Lula is widely anticipated, given the strategic nature of the program and the broad support it received from the powerful agribusiness lobby. The program’s implementation phase is scheduled to run from 2027 to 2031, during which time a newly formed National Council will monitor the progress of reducing import dependence and will also have the authority to establish a mandatory minimum percentage of domestic fertilizer content to be included in products sold within Brazil.

WHAT IT TOUCHES The chemical and agribusiness sectors stand to be the most directly affected by the new policy, which is a major long-term structural incentive designed to attract capital investment in large-scale domestic fertilizer production facilities. Companies involved in chemical inputs, logistics, and large-scale farming in Brazil are expected to see the most direct impact as the country begins to substitute imported products with domestic supply over the next decade.