Supreme Federal Court resumes trial on tax benefits for pesticides

The Supreme Federal Court (STF) resumed on Thursday (16) the trial on the constitutionality of granting tax benefits for pesticides. The ministers are judging two lawsuits filed by the Green Party (PV) and the Socialist Party (PSOL). The parties questioned the validity of Agreement No. 100 of 1997, of the National Council for Tax Policy (Confaz), and Constitutional Amendment (EC) 132 of 2023.

The rules allowed the application of a differentiated taxation regime for agricultural pesticides and a 60% reduction in the rates of the Tax on Circulation of Goods and Services (ICMS) on the products.

During the session, lawyer Lauro Rodrigues, representing the Green Party, said that 30% of pesticides permitted in Brazil are banned in the European Union due to their toxicity and dangerousness.

Furthermore, Rodrigues added that the tax benefits are targeted at large agricultural producers, not family farmers, who, according to him, represent about 70% of Brazil's food production. "The subsidy is targeted at a numerically small group, but they produce on a large scale. To dispel the thesis that if we stop subsidizing pesticides, Brazil will go bankrupt," he stated.

Attorney Rodrigo Kaufmann spoke on behalf of the Brazilian Confederation of Agriculture and Livestock (CNA). He said that eliminating pesticide benefits could increase food costs by R$16 billion and reduce the country's agricultural production by 50%.

 “Agricultural pesticides are not luxury items, they are essential and priority inputs for agricultural production,” he added.   

The session was dedicated to the parties' statements. The vote will begin by the ministers next Wednesday (22).