Lula plans special credit to encourage green agriculture and reduce pressure on the Amazon

Green credit lines, with lower interest rates, to encourage agriculture that converts degraded pastures into crops and capture carbon are a bet of the plan under discussion in Luiz Inácio Lula da Silva’s campaign to reduce deforestation while increasing the area. planted and tries to improve Brazil’s image abroad.

The proposal, which is being designed by several hands for the government program of former President Lula, who leads opinion polls, involves not only the environment, but also part of the agribusiness that supports his candidacy.

“The ecological transition is a structuring axis of all our policies”, said the coordinator of the PT government plan, Aloizio Mercadante. “We can open differentiated lines of credit to encourage migration to agriculture that sequesters carbon.”

The final design is being worked on, but the key idea is that the farmer who adheres to some of the agricultural transition proposals is entitled to a credit under better conditions, that is, value and interest that make the migration worthwhile.

The PT program under debate recalls the objectives of the ABC Plan, launched at the end of Lula’s second term. But the initiative, which still exists and managed to mitigate 170 million tons of CO2 by 2018, only holds a tiny percentage of the funding from the government’s Plano Safra, showing that there is room for improvement in this type of incentive.

In the 2022/23 harvest, the budget for the reformulated ABC+ is R$6 billion, or about 2% of the total volume budgeted for Plano Safra financing (R$341 billion), almost the same percentage as 12 years ago. The program’s interest rates, although lower, rose to up to 8.5% per year, in the wake of the Selic.

In the plan now developed, the PT aims at two main points: the conversion of degraded pastures into crops – already one of the objectives of ABC+ – and the increase in the use of bio-defensives. The party’s account, funded by agribusiness entrepreneurs, is that the country currently has 30 million hectares of underused pasture areas that could be used for crops.

The conversion would allow lands where there is only extensive livestock farming, or sometimes not even that, to become crops, in no-tillage systems that, according to analyzes already carried out by Embrapa (Brazilian Agricultural Research Corporation), help in the sequestration system. of carbon.

A study published by Embrapa in 2020 showed that crop rotation systems between soybean, corn and cotton, in the no-tillage system, sequester 31% more carbon than monoculture, in addition to increasing the productivity of all of them.

The debate on this migration uses Mato Grosso as an example, one of the champions in deforestation in the Amazon region and where three of the main names in support of the PT in the agribusiness area work today, a sector where support for Bolsonaro is still strong: the businessman Carlos Ernesto Agustin, senator Carlos Fávaro (PSD) and federal deputy Neri Geller (PP), former minister of agriculture in the government of Dilma Rousseff and seen with special reservation by environmentalists for defending relaxation of environmental legislation.

THE CASE OF MATO GROSSO

In 2021, Mato Grosso lost 2,300 square kilometers of forest, only behind Pará and Amazonas, according to the Prodes system of the National Institute for Space Research (Inpe). The state currently has, according to PT plan estimates, just over 11 million hectares of crops, and almost the same amount of underused grazing land.

“Why doesn’t this migration happen? Because there’s a lack of incentive. Because there’s a lack of public financing policy”, says Carlos Ernesto Agustin.

Called to talk to Lula in January of this year, when the former president was trying to get closer to agribusiness, Agustin was one of the businessmen in the area who started to work with the PT to design a plan that, while allowing for greater productivity , help to reduce the risks of deforestation and even improve the country’s image abroad.

“What are the advantages of you making this change? It takes pressure off the Amazon, transforms pasture into soy and still gets carbon credits. It produces more and helps with the carbon issue”, says Agustin. “The government or even the farmer can go abroad to get resources with lower interest rates.”

As Brazil is one of the largest producers and exporters of beef in the world, the idea of ​​exchanging pasture for cropland may seem strange, which could lead to resistance among producers. Agustin, however, says that a good part of the areas is either not being used or is poorly used, with livestock that can be driven to produce more with less land.

The idea of ​​intensive livestock farming is also defended by former Environment Minister Izabella Teixeira, one of the PT’s environmental consultants. According to Teixeira, only 35% of livestock production in Brazil is in the Amazon region, so this change would not affect Brazilian production so much. In addition, she explains, the average production today is one head of cattle per hectare in the region, and it is possible to reach three.

“If productivity increases, there is space left over, there is no need to expand the frontier for livestock and agriculture and can occupy these areas because they are already deforested”, he says, explaining that Brazil is also in a position to have greener and more productive livestock, with technology to reduce of methane production by cattle and with earlier slaughter.

Amid repeated records of deforestation in the Amazon, Brazilian producers are under pressure to show that Brazilian production does not come from deforested areas, in the face of a government that even mentioned lifting the so-called “soy moratorium” – the agreement , made in 2008, which assures exporters that Brazilian soy does not come from deforested areas.

“The biggest stupidity is to fight with the consumer like this government does. If Europe, China, wants a greener product, I have to offer it, but this government has a policy of ‘the bush is mine and if I want it, I’ll set it on fire. ‘. You can’t,” said Agustin.

Country needs to adopt efficient credit policy

Teixeira, currently co-chair of the United Nations’ International Resource Panel – an entity that analyzes policies to improve the use of natural resources – also defends the financing policy as a good bet.

“Brazil currently only finances 2% of low-carbon activities, but the country has technological alternatives that would allow for much greater action in this area. It needs a well-designed credit policy that makes companies migrate to a low-carbon economy” , he said.

Teixeira explains that the country can produce more tons of soy with less pesticides and more carbon sequestration, and an efficient credit policy can insert Brazil into a market where there is now a greener production. financial and market point of view.”

The former minister only recalls, however, that the problems of deforestation in the Amazon go beyond the need for more land for production – the scarcity of area, in fact, does not exist, as several ministers of Agriculture have already defended, including Tereza Cristina. , in the Bolsonaro government itself.

Deforestation in the region, before reaching agriculture, involves the illegal extraction of hardwoods, illegal mining and the simple grabbing of land for illegal sale.

“It’s one thing to face deforestation. You have to have command and control policies. Another thing is to transform economic sectors into low carbon,” he said.

Lula studies exempting income of up to R$5 thousand in IR table readjustment

The former president said this Wednesday (17th) that he is studying, if elected, raising the personal income tax exemption range to up to R$5,000 and also promised that, if he wins, he will readjust the IR table. every year.

In an interview with Rádio Super de Minas Gerais, PT made the reservation that the exemption band is still under discussion within the team of his government program, as it implies a loss of revenue.

The day before, in a speech to an audience of metalworkers in São Bernardo do Campo, Lula said that the readjustment of the Income Tax table will be one of the first measures of an eventual third term.

“I have the idea that we are going to have to choose a higher range so that we can be exempt from income tax. Today it is R$1,900 that people are exempt, we need to discuss another range. around 5,000 reais, that is, until then people would not have to pay income tax,” Lula told the Minas Gerais broadcaster.

“But we’re going to have to argue, because by the time you do that, you’re going to have to stop raising a huge amount of money and you’re going to have to say which other source you’re going to draw from. I don’t have to do that, because I still haven’t won the elections. Now, the readjustment, regardless of anything, we’re going to do it every year”, he added.

In the interview, Lula again defended changes in the tax system to increase taxation of the richest, including the end of the exemption on profits and dividends. The PT has reiterated that, if elected, he will carry out a progressive tax reform, in which the richest will have to pay more taxes.

The correction of the Income Tax table next year was also promised by President Jair Bolsonaro, who appears in second behind Lula in the polls.

In the 2018 election campaign, Bolsonaro had also promised to correct the IR table, but he did not fulfill the promise. In 2021, the government even proposed the correction within a project to reform the IR, which ended up locked in Congress and did not get off the ground.

When it presented the proposal, which would correct the tax bands and increase the tax exemption limit from R$1,900 per month to R$2,500 per month, the Ministry of Economy estimated that the measure would have an annual cost of at least R$22. billion a year.

The last time the Individual Income Tax table was readjusted was in 2015. According to Sindifisco (Union of Tax Auditors of the Federal Revenue of Brazil), the IR table accumulates, until last year, a lag of 134 .52% in relation to inflation.