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Agribusiness Entities Warn That Cutting Tax Benefits May Increase Costs and Result in Higher Food Prices.
The approval of the complementary bill that provides for a 10% cut in tax benefits has raised an alert in the Brazilian agribusiness.
More than 40 representative entities of rural producers and the agribusiness sector claim that the measure may raise production costs, reduce profit margins, and, as a direct consequence, put pressure on the price of food for consumers.
The alert was formalized in a letter sent to the Parliamentary Front for Agriculture after the approval of PLP 128/2025 by the National Congress in Brasília this week.
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Tax Benefits Under Pressure in Agribusiness
The project establishes a linear reduction of 10% in federal tax benefits of a tax, financial, and credit nature.
Thus, in the assessment of the productive sector, the text treats all mechanisms as privileges, without distinguishing those that correct structural distortions, ensure predictability, and facilitate strategic investments.
These instruments, according to the document, are essential to maintain the competitiveness of Brazilian agribusiness, especially in the international market.
Production Cost May Rise Rapidly
Among the main points of concern is the direct impact on production costs.
The entities cite as an example the policies of exemption from PIS/Cofins on essential inputs used in the field, such as fertilizers, pesticides, and other items related to agricultural production.
With the cut, there is a risk of immediate price increases for these inputs, squeezing margins and making financial planning for producers difficult.
“When these instruments suffer a linear cut, without distinguishing what is an inefficient incentive from what is a structure of competitiveness, the effect tends to appear where it hurts: costs increase, margins tighten, investments stall, and the capacity to add value decreases,” says the letter sent to the FPA.
Food Prices May Be Affected
Another central point raised by the entities is the direct reflection on food prices.
The increase in production costs, combined with the reduction of presumed credits and the possible adjustment of PIS/Cofins.
Although the document does not present an exact financial estimate, the sector warns that various production chains may feel the impact.
For the associations, the risk is that the measure, adopted with a fiscal focus, ends up penalizing the population with higher food prices.
Lack of Transition Concerns Producers
Thus, the entities also criticize the immediate effectiveness of the cut in tax benefits, without a period for adaptation or prior analysis of the economic and social impacts.
For agribusiness, the absence of a transition model increases the risk of productive disorganization, reduced investments, and contraction of activity.
The sector expresses concern about the possibility of a continuous cycle of tax burden increases as a way to compensate for the growth of public spending.
Sector Calls for Criteria and Technical Debate
In the document, the entities emphasize that they recognize the prerogative of Parliament to legislate and the importance of fiscal balance.
However, they argue that the review of tax benefits should consider technical criteria and measurement of economic and social returns.
Finally, the sector asks that the Executive Branch and the National Congress promote in-depth technical debates before the presidential sanction.
Thus, the project, already approved by the Chamber of Deputies and the Federal Senate, now awaits sanction to come into effect.
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