Government articulates offensive to stop agricultural "bomb agendas" in Congress

The government of President Luiz Inácio Lula da Silva is articulating an offensive to contain the possible fiscal impacts of proposals defended by agribusiness that advanced in the National Congress last week: the renegotiation of rural debts, rural insurance, Profert (Fertilizer Industry Development Program) and amendments to PLP (Complementary Bill) 114, which creates rules for revenue waivers on the fuel sector.

The idea is to act in the next steps to contain what the economic team sees as a risk to public accounts, including possible repercussions on the 2026/2027 Harvest Plan, whose negotiations begin in the coming weeks.

According to CNN, the government works on three fronts: pressing for adjustments in the review House, where rural insurance and Profert reach the Senate and PLP 114 is still being processed in the Chamber; present a new MP for the renegotiation of rural debts; and, the most drastic measure: vetoing parts of the approved texts or in full.

All proposals passed the negotiation table in recent weeks, but, according to sources from the economic team and Palácio do Planalto, the final texts voted on in both Houses did not come out as agreed and only incorporated part of the suggestions presented by the Executive, being very different from the versions defended by the government.

The case considered most delicate is that of the renegotiation of rural debts.

PL (Bill) 5122/23, approved on Wednesday (27) by the CAE (Economic Affairs Committee) of the Senate, provides for the renegotiation of R$ 130 billion in sector debts - senators estimate that total liabilities exceed R$ 1.4 trillion.

The text includes interest between 3.5% and 7.5%, covers any type of rural debt, including CPRs (Rural Product Notes), and provides for the use of the pre-salt FS (Social Fund) to finance the operation - but without a pre-defined amount, as per the government's request.

This last point is the main obstacle with the government. On Tuesday (26), the Treasury presented to the senators an MP (Provisional Measure) with an alternative proposal - more restricted, with interest between 6% and 12% depending on the size of the producer and without use of the Social Fund.

The senators rejected the proposal and maintained the report by senator Renan Calheiros (MDB-AL).

Even in the face of requests from senators to speed up the vote, the analysis of the text in the Senate plenary has been scheduled for Tuesday (10), because of the week shortened by the Corpus Christi holiday on Thursday (4) and so that there can be consensus with the government.

Even so, the government is still considering resubmitting the MP with adjustments.

Rural insurance and Profert were also approved in the Chamber plenary on Wednesday (27) and went to the Senate.

In both cases, the government resisted central points of the texts, but was unable to prevent the proposals from moving forward.

According to a source from the economic team interviewed by CNN, the approved texts do not correspond to what had been negotiated: part of the sector's demands were met, but other points of government resistance were not incorporated. The government is now trying to use the Senate to make adjustments.

In rural insurance, negotiations focused mainly on policy financing rules and mechanisms to guarantee resources for the program.

The main impasse was the attempt by the FPA (Agricultural Parliamentary Front) to transform the resources from the PSR (Rural Insurance Premium Subsidy Program) into mandatory expenditure, protected from contingencies.

The government proposed linking financing to Proagro (Agricultural Activity Guarantee Program), which the bench refused.

The parliamentarians' argument is based on concrete precedent: savings of between R$4 billion and R$6 billion generated by the reformulation of Proagro in 2023 were never reverted to rural insurance, as the sector expected.

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The bench also wanted the fund to be linked to the Ministry of Finance, and not to Mapa (Ministry of Agriculture, Livestock and Supply), to avoid political constraints.

There was a partial victory for the ruralists: the budget for the PSR remained mandatory, but ended up being restricted to the budget of the department responsible for the sector.

At Profert, the proposal gained strength this year in the face of external dependence on fertilizers and price volatility caused by geopolitical conflicts.

The text, which was blocked for years in Congress, advanced with the support of Palácio do Planalto and the president of the Chamber, Hugo Motta (Republicanos-PB).

The text provides for up to R$7.5 billion in tax credits and incentives, over five years, in addition to financing lines and the creation of a fund to support investments in the sector

PLP 114 has not yet gone to the plenary and still has more open points.

Negotiations include the possibility of using Cide on gasoline, or offsetting tax credits to enable concessions to the sugar-energy sector - especially the maintenance of the competitive advantage of sugarcane ethanol compared to gasoline, a mechanism guaranteed by the Federal Constitution.

The four initiatives are seen by members of the economic area as potential sources of pressure on public accounts by creating expenses, expanding subsidies, granting incentives or demanding new sources of financing, in the midst of the election year and pressures that have already led the government to freeze more than R$23 billion in the first two two months of 2026.

Source: CNN