Lawmakers approve equating fertilizers to critical minerals.

The Chamber of Deputies approved, this Wednesday (06), the National Policy for Critical and Strategic Minerals (PNMCE). The proposal brings advances to the agricultural sector by placing fertilizers on the same level as critical and strategic minerals. In practice, companies and projects focused on the production of these inputs will be able to access tax benefits, credit and incentive investment mechanisms. The text includes the National Fertilizer Plan (PNF) among the policies that should guide the PNMCE. With this, fertilizers become part of the State's strategic planning, which may stimulate new actions aimed at reducing external dependence and strengthening the national industry. "This national policy is combined with some legislative instruments already defined by us, and with mechanisms that are public policies that also need to be harmonized," highlighted the rapporteur of the text and vice-president of the Parliamentary Agricultural Front (FPA), deputy Arnaldo Jardim (Cidadania-SP). The proposal paves the way for projects related to the production of these inputs to receive tax, credit, and regulatory incentives. To qualify, they must be accredited and authorized by the Special Council for Critical and Strategic Minerals, an entity that will be created to manage actions related to the new policy. According to the FPA (Brazilian Parliamentary Front for Agriculture), the measure is important because it contributes to reducing Brazil's dependence on fertilizer imports. According to a recent survey by the National Confederation of Industry (CNI), more than 80% of the fertilizers consumed by Brazilian agriculture come from abroad. Looking at the product type, the greatest dependence is on potassium fertilizers, with 97.8% imported. This is followed by nitrogen fertilizers, with 89%, and phosphate fertilizers, with 66.4%. In recent months, nitrogen fertilizers have become an even greater concern for the sector, as they are produced from natural gas. With the conflict in the Middle East, urea prices rose by more than 30% just weeks after the start of the attacks.

Proposal includes fertilizers in tax benefit program.

The bill, backed by the Chamber of Deputies, also creates the Federal Program for the Beneficiation and Transformation of Critical and Strategic Minerals (PFMCE). This mechanism allows the Federal Government to grant tax credits for the Social Contribution on Net Profit (CSLL) to companies that operate in the production, beneficiation, or industrialization of phosphates, potassium, and nitrogen. In addition to stimulating the domestic production of these inputs, the measure can contribute to reducing production costs in the field. To access the program, these companies must meet certain requirements, which will be regulated after the proposal becomes law. Among these criteria are: using a minimum percentage of goods and services of national origin; making part of the production available to the domestic market; and demonstrating a certain level of investment in the purchase of machinery, equipment, and operational expenses. “One highlight is fertilizers, phosphates, potassium, and nitrogen, since Brazil needs to reduce its dependence on imports, especially of potassium fertilizers. In the processing program, we are guaranteeing incentives of R$ 1 billion per year for five years. These benefits are always preceded by a competitive procedure, where fertilizers are a priority,” commented one of the authors of the project and member of the FPA, Deputy Zé Silva (União-MG). The text also authorizes the issuance of incentivized debentures as a way to boost national production of these agricultural inputs. Debentures are debt securities issued by companies to raise funds in the capital market. In the case of incentivized debentures, individual investors are exempt from income tax on earnings, which makes this type of investment more attractive and facilitates the financing of strategic projects. These securities may be issued by companies that process, transform, or mine raw materials for fertilizers. Projects that carry out prospecting and research may also access this instrument.

This text was translated by machine from Brazilian Portuguese.