Dec 15, 2014

Farmer Protests in Brazil appear to have Achieved their Goal

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

Brazilian farmers "hit the streets" last Thursday morning with hundreds of tractors slowing down traffic in dozens of cities in protest of a new law requiring farmers to obtain license plates and pay road taxes on the agricultural machinery. The protests stretched from Rio Grande do Sul in far southern Brazil to the Amazon state of Para in northern Brazil.

The protesters were demanding a repeal of the new law and it appears that they have achieved their goal, at least for the time being. New legislation has now been introduced into the Brazilian Congress to delay implementing the law for one year until January 2016 and other legislation has been introduced to modifying the law significantly. The delay in implementing the law will give the Brazilian Congress an opportunity to correct what farmers feel are deficiencies in the law.

The legislation which passed in 2013 would require farmers to purchase annual license plates for their machinery and to pay the IPVA Tax (Automobile Owners Tax), which could cost farmers thousands of reals per year (approximately 3% of the values of the equipment) and they would have no way of passing along the costs. The law required those new measures for machinery manufactured after August of 2014 with machinery manufactures before that date being exempt.

Brazilian farmers contend that their equipment remains on their property almost exclusively and rarely travels on the highways of Brazilian and certainly should not be treated equal to automobiles, trucks, or busses.

The proposed legislation to modify the law contains provisions for the registration of agricultural equipment which would improve rural security and aid law enforcement in the recovery of stolen equipment.