Photo Credit: Claudio Nascimento

NNA News – Brazil is preparing to reach a historic milestone in global food trade this year by overtaking the United States and becoming the world’s largest food exporter, Vice President Geraldo Alckmin (PSB) said at the opening of the 25th Brazilian Agribusiness Congress, organized by the Brazilian Agribusiness Association (Abag) in São Paulo, according to Brasil 247.

In his speech, Alckmin recalled the historical development of Brazil’s agricultural sector to put the achievement into perspective. “Fifty years ago, we had to import food. And this year we will overtake the United States and become the largest food exporter in the world. It is an extraordinary leap,” the vice president said.

To sustain Brazil’s growth amid global geopolitical conflicts and wars, Alckmin said the consolidation of tax reform will be a turning point. He highlighted the transition to the Dual Value-Added Tax system, which will consolidate federal taxes — PIS, Cofins and IPI — into the CBS, and state and municipal taxes — ICMS and ISS — into the IBS. According to him, the reform will eliminate historical distortions that penalize productive sectors.

“Brazil is the country of taxes and litigation. Last year, 40 million new lawsuits were filed in the courts. Tax reform will simplify the system, fully exempt the basic food basket from taxes, and exempt investments and exports,” Alckmin said.

He noted that the cumulative taxation of exported goods, including tractors and machinery, will be eliminated with the end of the accumulation of tax credits. Citing data from the Institute of Applied Economic Research (Ipea), he said the measure is expected, over 15 years, to increase Brazil’s gross domestic product by 12%, investments by 14% and exports by 17%.

Energy transition, biofuels and strategic inputs

Another focus of Alckmin’s speech was national sovereignty in strategic inputs and renewable energy. He highlighted the resumption of nitrogen fertilizer production at Fafen plants in Sergipe, Bahia and Araucária, in Paraná state, as well as the reactivation of the unit in Três Lagoas, in Mato Grosso do Sul. He also mentioned the resolution of legal disputes involving potassium chloride exploration in the Amazon, which could reduce Brazil’s dependence on imported agricultural inputs.

On the energy transition, the vice president highlighted regulatory and market advances involving biofuels. He pointed to the benefits of ethanol and biodiesel, including the 15% biodiesel blend in diesel, for the economy, the environment and public health.

“Ethanol and biodiesel help the environment, improve air quality, contribute to health, generate jobs and income. The third leading cause of death in the world is lung disease among the elderly. And now we will have a major avenue with SAF [Sustainable Aviation Fuel] and fuels for maritime navigation,” he said.

Alckmin also highlighted the role of science in agriculture, citing the recent hiring of 315 new researchers by the Brazilian Agricultural Research Corporation (Embrapa). He also recalled his father’s career as a veterinarian who graduated from the first class of the University of São Paulo’s veterinary school in 1934, emphasizing the importance of research and rural extension services.

Health protection and new trade agreements

On sanitary protection, Alckmin said the hiring of nearly 1,000 new employees strengthened Brazil’s sanitary surveillance system after 18 years. He recalled the risks posed by global viral outbreaks over recent decades, including SARS, H1N1, MERS-CoV, Ebola and Covid-19, and stressed the rigor of Brazil’s system.

According to Alckmin, the system helped Brazil obtain recognition as a country free of foot-and-mouth disease without vaccination and control outbreaks of avian influenza within 28 days.

On the international front, the vice president highlighted the federal government’s efforts to open markets and overcome protectionist barriers. He cited Mercosur agreements with Singapore, the countries of the European Free Trade Association (EFTA), and the historic agreement with the European Union.

“When you do not make an agreement, you do not remain still, you move backward, because someone else makes one and gains tariff preferences,” Alckmin said. In the first two months after the new partnerships took effect, sales to the European Union increased by 4%.

Despite recent trade tensions and tariffs imposed by the United States, which affect between $5 billion and $7 billion of Brazilian exports, with a direct impact on machinery industries in municipalities such as Piracicaba, São Paulo state, Alckmin reiterated Brazil’s determination to maintain dialogue.

“We will not leave the negotiating table. We will insist on showing the injustice. When an American product enters Brazil, the average tariff is 3.1%, and seven of the 10 products that the United States exports most to us have a zero tariff. The US has a deficit with the whole world, but with Brazil it has a surplus,” Alckmin said.

To cushion the impact on manufacturing while new markets are opened through ApexBrasil and global renegotiations, the federal government launched the Brasil Soberano 3 program, allocating 18.5 billion reais in support for affected companies.

The vice president also welcomed initiatives to support rural producers undergoing debt renegotiations, highlighting the authorization to create a guarantee fund intended to provide financial security to the agribusiness sector.