Brazil’s National Fertilizer Plan – the wider strategy

Brazil’s National Fertilizer Plan – the wider strategy

With a strategic vision, effective partnerships, and targeted investments, Brazil has the potential to turn its current challenges into competitive advantages. Bruno Dias Ferreira, Pedro Veillard Farias, Tiago Nunes de Freitas Dahdah, Bernardo Silva, Guilherme Almeida Machado and José Carlos Polidoro explain how the country is planning to consolidate its position as a sustainable leader in global agricultural.

Brazil’s fertilizer supply – why is strategy necessary?

Brazil is at a pivotal moment, poised to solidify its position as a global leader in agricultural innovation and the production of food, fibre and bioenergy. As one of the world’s largest agricultural powerhouses, the country has consistently demonstrated its ability to meet the growing demands for food and agricultural commodities.

The launch of the National Program for the Conversion of Degraded Pastures, aimed at doubling productive capacity without increasing deforested areas, is a cornerstone of Brazil’s strategy to maintain sustainable growth in agriculture. This initiative is projected to significantly elevate the demand for fertilizers, soil amendments, and other essential inputs necessary to sustain plant nutrition and maximize crop yields1.

The importance of fertilizers in Brazilian agriculture cannot be overstated. In 2023, approximately 86% of the fertilizers consumed in Brazil – equivalent to 39 million tonnes – were imported. This is currently Brazil’s largest import segment by value, costing the equivalent of 25 billion US dollars in 2022 and 15 billion dollars in 2023.

Total fertilizer consumption reached 45 million tonnes in 2023, an increase of four million tonnes on the previous year. This surge in consumption highlights the growing reliance on fertilizers to boost agricultural productivity, a trend that has been critical for the development of the country’s agribusiness sector.

The $1 billion Serra do Salitre phosphate project entered production in March 2024. It will displace imports and provide Brazil with much needed in-market fertilizer supplies.

PHOTO: EUROCHEM

This upward trend in fertilizer consumption was anticipated in the National Fertilizer Plan (PNF), a policy document specifically developed to address Brazil’s dependency on imported fertilizers. Indeed, the plan projects that national fertilizer consumption will surpass 70 million tonnes by 20502.

This projection is underpinned by the country’s adoption of high-efficiency agricultural technologies and a commitment to enhancing productivity per hectare. Recent findings from the National Supply Company (CONAB) reinforce PNF projections, with the 2024/2025 grain harvest expected to see an 8.3% increase in output, equivalent to an additional 24.62 million tonnes above the 2023/24 harvest3 .

Brazil’s growing prominence in global agricultural trade amplifies the strategic role of fertilizers. According to the United States Department of Agriculture (USDA), Brazil is expected to account for 71% of global soybean exports and 32% of global corn exports by 20334.

These figures underscore the critical need for a reliable and sustainable supply of fertilizers to maintain and enhance Brazil’s agricultural output. As the global population continues to rise, the demand for food is expected to surge, positioning Brazil as an essential food market player and guarantor of global food security.

However, the country’s heavy reliance on imported fertilizers exposes Brazil to significant risks and challenges. In particular, any disruptions to international supply chains, whether due to geopolitical conflicts, trade barriers, or logistical issues, could have severe repercussions on both the domestic availability and cost of fertilizers.

Given Brazil’s importance to world agriculture, such disruptions would not only threaten domestic agricultural production but also impact global food supply chains. This dependency highlights the urgent need for strategic policies and investments aimed at increasing domestic fertilizer production, diversifying sources of fertilizer raw materials, and enhancing logistical infrastructure.

The implications of these challenges go beyond economic considerations as well. The fertilizer sector is closely tied to national security, as the stability of food production is a critical factor in maintaining social and economic cohesion and resilience.

The Brazilian government has recognised this, embedding fertilizer supply strategies within broader frameworks for sustainable agriculture, industrial development, and international trade. The combination of these efforts aims to reduce vulnerability, strengthen Brazil’s position in global markets, and support its leadership in sustainable agricultural practices.

As Brazil embarks on this transformative journey, the fertilizer sector stands at the forefront of the country’s strategy to balance productivity, sustainability, and security. Through a combination of innovative policies, strategic investments, and public-private collaborations, the country has the opportunity to address current challenges and establish a robust and sustainable agricultural supply chain that meets both domestic and global needs.

The National Fertilizer Plan (PNF)

Recognising the strategic role of the fertilizer sector, Brazil has developed a series of public policies and initiatives to reduce dependence on imports and strengthen domestic production. The cornerstone of this effort is The National Fertilizer Plan (PNF)5.

This landmark plan contains five strategic guidelines, 27 goals, and 168 actions distributed across short-,medium-,and long-term time horizons. These measures address critical themes, such as increasing the supply of organic and organomineral nutrients, repurposing solid waste, as well as encouraging the use of ‘remineralizers’ and agrominerals.

The Project Portfolio – a key part National Fertilizer Plan – lists more than 50 wide-ranging strategic ventures. These cover diverse areas such as research and development and mineral resources exploration. Projects are targeting the following key needs:

• Development of organomineral fertilizers: These integrate organic matter with minerals to enhance nutrient release efficiency.
• Utilisation of urban and industrial waste: Projects that transform waste into raw materials for fertilizer production – with these contributing to the sector’s sustainability by adopting circular economy practices.
• Agromineral exploration: Geological studies and mining projects in regions such as the Triângulo Mineiro and Mato Grosso to expand the supply and availability of domestic crop inputs.

These projects, as well as boosting innovation, are designed to encourage investment and capture technological expertise from the private sector via public-private partnerships.

Center of Excellence in Fertilizers and Plant Nutrition (CEFENP)

Overall, the PNF aims to improve and expand the business environment for domestic fertilizer production through foreign direct investment, lines of finance for fertilizer plant construction, the creation of a level playing field on taxation, and other structural measures. Probably its most ambitious initiative, however, is the creation of the Center of Excellence in Fertilizers and Plant Nutrition (CEFENP).

The CEFENP has been set up to coordinate efforts on fertilizer research, development, and innovation (R&D&I), as well as promote cutting-edge technologies, by connecting universities, research institutions, and industry. It strategic priorities include developing bio-based fertilizers, controlled-release fertilizers, and remineralizers, as well as the commercial deployment of low-carbon technologies, including industrial ammonia synthesis from green hydrogen.

The CEFENP – although physically headquartered in the Rio de Janeiro State Technology Park – is decentralised and will operate as a ‘virtual centre’ with regional hubs strategically distributed across major agricultural production areas. The hubs will promote technology transfer and play a crucial role in bringing together the private sector, universities and research institutes – as well as coming up with tailor-made solutions that match the specific needs of each agricultural region.

Regional hubs will support the development of innovative fertilizers, while also initiating studies on nutrient use efficiency and the mitigation of the environmental impacts of fertilizer use. Each hub will specialise in sustainable management practices that address local circumstances, such as the specific tropical soil and crop types found locally.

Importantly, the CEFENP will function as an integrated digital platform, providing fertilizer producers, researchers, and investors with access to a comprehensive repository of data, analytical results, and research findings, as well as sharing best practices and the latest advances in technology. The overall aim is to boost the development of the fertilizer sector by strengthening communication and taking maximum advantage of the synergies that exist between different players.

As wells as the CEFENP, other complementary initiatives are also being implemented to enhance the competitiveness and sustainability of Brazil’s fertilizer sector. These include the Fertilizer Industry Development Program (PROFERT) and the Rota Rondon.

Fig. 2: Historical revenue trends of emerging fertilizer categories, BRL billion

Fertilizer Industry Development Program (PROFERT)

PROFERT, established by government Bill 3507/2021, is a strategic initiative to reduce Brazil’s reliance on imported fertilizers by encouraging domestic production7. Key actions include:

• Tax exemptions and reductions that incentivise fertilizer plant construction and modernisation, particularly in regions with strategic potential.
• Dedicated financial support for low-carbon technology projects and bio-based fertilizer production.
• Support for research and innovation partnerships between industry, universities and research centres, if these meet the aims and objectives of the CEFENP, especially the development of technologies that improve agronomic efficiency and reduce environmental impacts.

The Rota Rondon – a logistics strategy for Brazil

The Rota Rondon is designed to connect Brazil to the Pacific Ocean through an integrated network of transport corridors, including roadways, railways, and waterways. These routes are expected to transform Brazil’s trade dynamics by improving access to Asian, African, and other Pacific-facing markets – while simultaneously providing capacity to import the essential raw material inputs needed for domestic fertilizer production. Key elements of the Rota Rondon include:

• Development of multimodal corridors that integrate road, rail, and water transport for the swift and efficient movement of fertilizers from production centres to key agricultural hubs.
• Improving logistics infrastructure to lower transportation costs, making fertilizers more affordable for agricultural producers and consequently boosting the competitiveness of national crop production.
• Sustainable logistics practices with low environmental impacts that meet the transport sector’s decarbonisation goals, including the use of cleaner fuels and energy-efficient rail transport.

Fig. 3: Projected percentage growth of emerging fertilizer chains in 2024

In summary, the integration of PROFERT, the Project Portfolio, and the Rota Rondon – alongside initiatives such as the CEFENP and the NIB – provides a comprehensive strategy to transform Brazil’s fertilizer sector. Together, these policy measures have the potential to enhance agricultural productivity, reduce dependence on fertilizer imports, and position Brazil as a leading global supplier of sustainable agricultural inputs.

ICMS Agreement 100/1997

This long-standing agreement offers significant support to Brazil’s farming sector by providing a partial exemption and reduction in ICMS (Tax on Circulation of Goods and Services) taxation on fertilizers, pesticides and other inputs. The agreement, by reducing the tax burden on critical products, helps strengthen the domestic agricultural sector and promotes fertilizer use across the country by making these more affordable to farmers8.

By improving access to high-quality inputs and lowering their costs, particularly for small- and medium-sized farmers, the ICMS Agreement helps to sustain agricultural productivity and food security while maintaining competitiveness in global markets. This tax instrument – as an alternative approach to strengthening the fertilizer supply chain – complements strategies designed to boost Brazil’s domestic fertilizer production, improve logistics, and encourage the use of innovative and sustainable fertilizers, as already outlined in this article.

Concluding remarks

The fertilizer sector has a central role to play in consolidating Brazil’s position as a leading player in global agriculture and food security. The country – faced with the continuous growth in food demand and the challenge of reducing its dependency on imported inputs – has adopted a strategic and integrated approach to transform its fertilizer supply chain.

Initiatives such as the National Fertilizer Plan (PNF), Nova Indústria Brasil (NIB), and the Center of Excellence in Fertilizers and Plant Nutrition (CEFENP) demonstrate the government’s commitment to fostering innovation, enhancing domestic production capacity, and promoting sustainable practices. These strategies are further supported by PROFERT, the PNF Project Portfolio, and the Rota Rondon – programmes which are addressing the sector’s challenges with a closely aligned set of public policies, economic incentives, and logistical solutions.

While Brazil has made significant progress toward creating a more autonomous and sustainable fertilizer sector, the success of these initiatives will depend on their effective implementation, the ability to overcome structural challenges, and strong collaboration between government, the private sector, academia, and civil society. Critical issues, including financing, technological capacity building, and environmental impact mitigation, must also remain priorities to ensure progress is balanced and inclusive.

Additionally, by integrating global Additionally, by integrating global trends – such as decarbonisation, the use of bio-based inputs, and agricultural digitalisation – Brazil can position itself as a model leader in sustainable farming practices. Maintaining the success of the country’s agricultural sector also depends on continuing efforts to diversify sources of ag inputs, reduce logistical costs, and enhance international competitiveness.

Transforming the fertilizer sector is not merely a matter of economic competitiveness either. It is also a question of national sovereignty and global leadership. Indeed, strengthening the fertilizer supply chain is essential for the resilience of Brazilian agribusiness, helping to meet the increasing demands of global markets, while also contributing to the food security of a growing global population.

In our view, with a strategic vision, effective partnerships, and targeted investments, Brazil has the potential to turn its current challenges into competitive advantages – and solidify its position as a sustainable leader in the global agricultural landscape.

About the authors

Bruno Dias Ferreira – Technical consultant, Ministry of Agriculture and Livestock of Brazil

Pedro Veillard Farias – Superintendent of New Economies, Secretariat of Economic Development and International Relations, Government of the State of Rio de Janeiro

Tiago Nunes de Freitas Dahdah – General Coordinator of Economic Analysis (CGAEC), Department of Economic Analysis and Public Policies (DAEP), Secretariat of Agricultural Policy (SPA)

Bernardo Silva – Executive Director, National Union of Raw Material Industries for Fertilizers

Guilherme Almeida Machado – Analyst/Investment Officer, Investment Division, ApexBrasil

José Carlos Polidoro – Advisor, Ministry of Agriculture and Livestock of Brazil and Embrapa, Brazilian Agricultural Research Corporation

References

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2. Gov, 2024. Estatísticas do Setor. Ministério da Agricultura e Pecuária. Available at: https://www.gov.br/mapa/estatisticas. [Accessed 9 Dec 2024].

3. CONAB, 2024. Primeira estimativa para safra de grãos 2024/25 indica produção de 322,47 milhões de toneladas. Available at: https://www.conab.gov.br/safra-degraos-2024-2025. [Accessed 9 Dec 2024].

4. USDA, 2024. Agricultural Projections to 2033. Available at: https://www.usda.gov/agricultural-projections-2033. [Accessed 9 Dec 2024].

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7. Camara, 2024. Comissão aprova projeto de incentivo à indústria de fertilizantes. Available at: https://www.camara.leg.br/noticias/projeto-incentivo-industria-fertilizantes. [Accessed 9 Dec 2024].

8. LEGISWEB, 1997. Convênio ICMS Nº 100 DE 04/11/1997. [S. l.]. Available at: https://www.legisweb.com.br/legislacao/?id=14713. [Accessed 9 Dec 2024].