New Commodity Fees Instituted in Goias and Parana Brazil

The legislature in the state of Goias approved a new fee on the sale of agricultural products to fund infrastructure projects in the state. The export withholding tax would be directed to maintaining, improving, and expanding infrastructure projects in the state through the State Infrastructure Fund (Fundeinfra), within the Infrastructure and Transportation Agency of Goias (Goinfra).

In Goias, the fees were approved last week with 22 votes in favor and 14 votes against. The governor has indicated that he will sign the measure when it reaches his desk.

The measure in Goias would levy a fee of 1.65% on the sale of grain products such as soybeans and corn, livestock, and mineral products. For grain, the fee is the equivalent to approximately $0.20 per bushel for soybeans and $0.10 per bushel for corn.

This new fee is a type of “check off” program, but instead of promoting increased uses and exports of a commodity, the aim of this program is to reduce transportation costs by improving and expanding the infrastructure that is critical for the agricultural sector.

Similar legislation was introduced into the Parana legislature last week with tax revenues directed for infrastructure improvements through its Infrastructure and Logistics Development Fund. In Parana, the law would establish different fee rates for each product. Soybeans would be taxed at a rate of R$ 41.50 per metric ton (approximately $0.21 per bushel) and corn would be taxes at a rate of R$ 19.00 per metric ton (approximately $0.10 per bushel).

Farmers and industry associations contend that it will increase food costs and jeopardize Parana farmer’s competitiveness as well as the state’s economic growth and development. Aprosoja/PR warns it will curtail investments and dampen economic activity. If the funds are used as promised, they could benefit the agricultural sector by lowering the cost of transportation in the state.

Several other states in Brazil such as Mato Grosso do Sul, Mato Grosso, Tocantins, and Maranhao have similar programs where the funds are directed toward improved infrastructure.

Tags: corn, export, grain, program, soybeans, agricultural products, tax, Parana, Goiás, fees