Feb. 4, 2025
The Agriculture Committee (CAPADR) in Brazil's Chamber of Deputies has approved Representative Coronel Fernanda's report on the bill that establishes the Emergency Program for Ammonia and Urea Manufacturing, named ″Pefau″.
Coronel Fernanda
Representative Otto Alencar Filho authored the proposal (PL 4,338/23), which provides for economic subsidies on natural gas prices used in the production of these essential agricultural inputs.
Otto Alencar Filho
Brazil, the world's largest agricultural fertilizer importer, depends on external sources to meet domestic demand: 95.7% for nitrogen fertilizers, 72% for phosphates, and 96.4% for potassium. The sector's vulnerability became evident during international crises, such as the COVID-19 pandemic and the Ukraine war, which worsened supply shortages and price increases.
"The project is a strategic response to reduce external dependence and increase the competitiveness of our agricultural production," stated Representative Coronel Fernanda, a member of the Parliamentary Agricultural Front (FPA).
She also emphasized that "the disparity in natural gas costs between Brazilian and international markets hurts our productive capacity, and Pefau emerges as a concrete solution to face this challenge."
The proposal authorizes the federal government to allocate up to 1.7 billion reais annually to equalize the cost of natural gas used in ammonia and urea production. The reference value for the input will be US$4.00 per million BTU (MMBTU). The measure applies to both operating manufacturers and new industrial projects and is valid until December 31, 2028.
"Pefau is essential not only to ensure stability in these inputs but also to strengthen Brazilian agribusiness and protect our country's food security," Fernanda reinforced.
Furthermore, the substitute bill presented by the rapporteur adjusts the original text by excluding provisions related to rural credit, which is considered outside the program's scope. "These changes were made to align the project with its main objectives, avoiding confusion and overlaps that could compromise policy implementation," the representative explained.
Otto Alencar Filho emphasized that Pefau, the bill's author, is fundamental to ensuring the country's food security and agricultural sovereignty. "The escalation of fertilizer prices shows the urgency of a policy that promotes national self-sufficiency, mitigating the effects of international crises. "
The approved text still needs to be analyzed by the committees on economic development, mines and Energy, finance and Taxation, and Constitution, Justice, and Citizenship. If approved conclusively, it could go directly to the Senate without requiring a vote in the Chamber's plenary.
"This approval is an essential step for Brazil to become less dependent on external suppliers and to use its natural resources strategically and sustainably," Fernanda said in conclusion.
Upon implementation, the program promises to stimulate national industry, strengthen Brazilian agriculture, and reduce the impacts of global market fluctuations on production costs in the field.
(Editing by Leonardo Gottems, reporter for AgroPages)
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