Dec 09, 2014

Brazilian Farmers to Protest New Licensing Law for Ag Machinery

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Brazilian farmers and farm organizations are very upset about a new law in Brazil requiring Brazilian farmers to pay a tax and obtain license plates for their agricultural equipment. The new law will impose a tax and require license plants for tractors, combines and other equipment that was manufactured starting in August of 2014. Equipment manufactured before that date will not require the license plates or be liable for the tax. The law, which passed the Brazilian Congress in July of 2013, is scheduled to take effect on January 1, 2015.

Farm organization opposed to the new legislation contend that the machinery covered by the new legislation rarely travels on the highways of Brazil and certainly should not be treated equal to passenger vehicles, trucks, or buses. They contend that the new legislation will greatly increase costs for farmers and that they have no way to pass along the costs and that the agricultural sector is being unfairly targeted by the new legislation.

The license and the 3% IPVA tax on the value of the equipment is expected to cost farmers R$ 1,000 to R$ 5,000 per machine (US$ 400 to US$ 2,000). There are 10,000 to 12,000 units of agricultural machinery manufactured per year in Brazil that would be required to pay the tax and obtain a license plate.

The Federation of Agricultural Workers in the State of Rio Grande do Sul (Fetag/RS) has petitioned the Brazilian National Transit Counsel (Contran) for a 180 day postponement in implementing the new law. The president of Fetag/RS Elton Weber, explained that the six month postponement is needed for the Brazilian Congress to resend the law or at a minimum make modifications to the law. They have also sent the same request to the Minister of Agriculture, the Brazilian Transit Authority, and the state Legislature in Rio Grande do Sul.

Officials from Fetag/RS have indicated that they and their counterparts in the state of Parana are in the process of organizing protests scheduled for Thursday, December 11th at 10:00 AM Brazil time. The plan is to have tractors and combines “hit the streets” to protest the new legislation.