Chamber approves subsidies for the sugarcane sector.

Chamber Agency - The Plenary approved this Monday (9) Provisional Measure 615/13, which grants subsidies to independent sugarcane producers in the Northeast and to mill owners in the production of fuel ethanol. An agreement between party leaders made it possible to vote on the report by Senator Gim Argelo (PTB-DF) with several issues different from the original theme of the MP, such as debt installment, gun ownership and taxi driver licenses.

This Monday was the last day the Chamber could vote on the matter, as the Senate requires seven days before the expiration of a Provisional Measure (MP 615/13 expires on the 16th). The vote was possible after an agreement between the leaders, who decided to exclude some topics added by the rapporteur.

Following the vote, the Speaker of the House, Henrique Eduardo Alves, announced that the House will also only accept Provisional Measures (MPs) that have been approved by the joint committees at least 14 days before their expiration (seven days for the House and seven for the Senate). Alves' decision will be submitted to the party leaders. Topics unrelated to the MP will also result in its return to the joint committee.

Bank debts

One of the new themes that remained in Provisional Measure 615 was the installment payment plan for banks and insurance companies, which will be able to divide PIS and Cofins debts into up to 60 installments, with a 20% down payment. The reductions will be 80% on late payment and official fines, 80% on isolated fines, 40% on late payment interest, and 100% on the value of the legal charge.

If the debtor chooses to pay in full, they will receive a 100% reduction in late payment and official fines, an 80% reduction in isolated fines, a 45% reduction in late payment interest, and a 100% reduction in the legal charge.

If they drop legal action, the disputed debts may also be paid in installments. The request for payment or installment must be made by November 29, 2013, and does not require collateral.

The President presented an amendment to exclude this topic from the Provisional Measure, but the Plenary decided to keep it.

Sugar cane

Regarding the main theme of the original Provisional Measure, the rapporteur made few changes, and the most important one was excluded: the extension of the benefit to producers in other regions of the Superintendency for the Development of the Northeast (Sudene) and to Paraná.

Sugarcane producers benefiting from the Provisional Measure will receive, directly or through their cooperatives, a subsidy of R$ 12 per ton, limited to 10 tons each, for the 2011/2012 harvest.

With an estimated benefit for around 18 producers affected by the drought, the cost should be around R$ 122,2 million.

Ethanol distilleries located in these regions, with production geared towards the domestic market, will receive a subsidy of R$ 0,20 per liter of fuel actually produced and sold in the 2011/2012 harvest. The projected cost is R$ 393,5 million, considering a volume of 1,9 billion liters, with disbursements in 2013 and 2014.

Another R$ 47,7 million will be spent on the exemption of PIS/Pasep and Cofins taxes on these subsidies in 2013.

To receive the subsidies, neither the producer nor the sugar mill owner will need to prove tax compliance with the Federal Government. Receipt may also occur through cooperatives or unions in the sector.

Sugarcane field renewal

The provisional measure also authorizes financing, with interest rate equalization, for the renewal and implementation of sugarcane plantations. The objective is to increase the productivity of Brazilian sugarcane farming and reduce industrial idle capacity in sugar and ethanol production.

The budgetary impact of this stimulus is estimated at R$ 333,9 million, of which R$ 53,2 million is in 2014 and R$ 80,5 million in 2015.