Brazil Moves to Cut Its Fertilizer Import Dependence
BRAZIL · AGRIBUSINESS
Key Facts
—The bill. The Chamber approved PL 699/2023, creating the Profert program to build up Brazil’s domestic fertilizer industry.
—The dependence. Brazil imports about 85 percent of its fertilizers, among the largest import volumes in the world.
—Emergency credit. A 2026 financial credit capped at R$1 billion (about US$199 million) is tied to passing the benefit to sale prices.
—The trigger. The Middle East conflict has pushed up input prices, adding urgency to the domestic-supply push.
—Latin American impact. Cheaper, steadier inputs would shore up the region’s top food exporter against global supply shocks.
Brazil’s Chamber of Deputies approved a bill to expand domestic fertilizer production, a move aimed at cutting the fertilizer import dependence that leaves the world’s top food exporter exposed to global price shocks.
A Strategic Bet on Domestic Supply
The lower house approved PL 699/2023, which creates the Program for the Development of the Fertilizer Industry, known as Profert. The vote was symbolic, with opposition from the PSOL-Rede bloc, Novo and Missao. The text now returns to the Senate.
The bill is authored by Senator Laercio Oliveira and was reported in the Chamber by deputy Junior Ferrari. Its backers cast it as a strategic step to strengthen the farm-input sector.
Profert offers temporary tax benefits to encourage local production. The stated goals are to bolster food security, lower supply-chain costs and expand national output. The text also calls for periodic monitoring of results.
Why the Fertilizer Import Dependence Matters
Brazil buys about 85 percent of the fertilizers used in its agriculture from abroad. In 2023, that meant roughly 41 million tonnes of imports. Those figures place the country among the largest fertilizer importers in the world.
That reliance is a structural risk for a farm sector that anchors Brazil‘s exports. A jump in global input prices feeds straight through to planting costs. It also exposes growers to shipping and geopolitical disruptions far from home.
The latest squeeze comes from the Middle East conflict, which has lifted energy and input prices. Natural gas is a key feedstock for nitrogen fertilizers. That link ties farm costs directly to the same shock driving oil markets.
The Emergency Credit and Its Cost
To cushion the price shock, the text creates an emergency financial credit for 2026, capped at R$1 billion, about US$199 million. The benefit is conditioned on producers and importers passing the relief through to sale prices.
The broader tax-credit regime for domestic production is set to run from 2027. The relator described the emergency measure as a concession secured from the federal government for immediate relief to farmers.
The fiscal cost is contested. A 2024 federal revenue-service note on an earlier version estimated impacts of nearly R$5 billion a year. There was no published estimate for the version the Chamber approved on Wednesday.
What Comes Next
Because the Chamber changed the text, the bill returns to the Senate for another vote. Only after the Senate agrees on a final version can it go to the president.
For investors, the measure signals policy support for a long-discussed industrial goal. Whether it changes Brazil’s import math will depend on the final tax terms and on private capital following the incentives.
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Frequently Asked Questions
What is Profert?
Profert is the Program for the Development of the Fertilizer Industry, created by PL 699/2023. It offers temporary tax benefits to encourage domestic fertilizer production and reduce reliance on imports.
How dependent is Brazil on fertilizer imports?
Brazil imports about 85 percent of the fertilizers used in its agriculture. In 2023 it bought roughly 41 million tonnes abroad, ranking it among the world’s largest importers.
What is the emergency credit?
It is a 2026 financial credit capped at R$1 billion, about US$199 million. To qualify, producers and importers must pass the benefit through to the sale price of fertilizers.
Why now?
The Middle East conflict has pushed up energy and input prices. Natural gas is a feedstock for nitrogen fertilizers, so the shock raises farm costs and adds urgency to building domestic supply.
Is the bill now law?
No. The Chamber approved it and changed the text, so it returns to the Senate. A final Senate vote would be needed before it could be sent to the president.
Connected Coverage
The same legislative session advanced relief for indebted farmers; see our report on Brazil’s rural-debt renegotiation bill. For the energy backdrop driving input costs, see our coverage of Brazil’s fuel-tax and oil-revenue debate.
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