Alagoas takes the lead in the Northeast and suspends tax benefits for imports of milk and dairy products

By Vanessa Siqueira, from Alagoas

Milk producers across the country have raised their voice in recent weeks and started a national movement that calls for the suspension of various incentives and benefits for importing powdered milk from other countries, which had been causing several losses to the production chain. This Monday (01) the government of Alagoas signed two Normative Instructions (IN) that suspend tax benefits for the import of milk and dairy products, in addition to regulating a development program in the state.

The main complaint from the production sector is that imports of powdered milk from countries such as Argentina and Uruguay have harmed local producers, who are also experiencing losses and financial difficulties. The first state to review some taxes was Minas Gerais, which announced changes to the ICMS for dairy products that import milk.

The measures announced by the Government of Alagoas include the regulation of the Alagoas Dairy Industry Development Program, with IN 16/24, provided for in Decree No. 92,726, of August 2023, which established the Program and enables the granting of special taxation of the Tax on Circulation of Goods and Services (ICMS).

Normative Instruction 18/24 suspends the entry of products from other countries, removing tax benefits from dairy products that choose to be imported.

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The president of the Association of Breeders of Alagoas (ACA), Domício Silva, has been closely following all national movements and assessed the measures announced by the Alagoas State Executive as positive. He explained that producers are currently receiving between R$1.90 and R$2.00 per liter of milk, a value considered outdated and which has fallen year after year.

The Federal Government currently offers subsidies to producers in Argentina and Uruguay and due to the economic crisis experienced by Argentines, powdered milk arrives in Brazil at a very low price, which ends up harming the commercial dispute with national producers.

Data from the Ministry of Agriculture and Livestock (MAPA) indicate that powdered milk was the main dairy product imported by Brazil in 2023, equivalent to 2.8 billion liters of milk. Argentina and Uruguay are currently exempt from Mercosur’s Common External Tariff (TEC), which has led producers across the country to demand measures to reverse losses.

Data from the Leite 2023 Yearbook, from the Brazilian Agricultural Research Corporation (Embrapa), indicate that Pernambuco has become the northeast leader in milk production, producing 3.5 million liters/day in 2021. Alagoas is in fourth place, with a production of 1.8 million liters per day, behind Bahia and Ceará, second and third place, respectively.

“Alagoas is engaged in this fight, despite the fact that at a national level it does not have as significant a production as Minas Gerais and Goiás, which are states that lead this movement. But the measures announced today by the state government greatly help local producers. In February, the federal government announced measures on PIS/COFINS, which will also contribute to strengthening the Brazilian production chain”, explained Domício.

Alagoas and regional front

Asked about the articulations in the Northeast region, the president of the ACA said that during the meeting with governor Paulo Dantas, representatives of the sector asked the head of the Executive to take this concern to other governors in the region, so that more measures can be taken to regional level.

“Pernambuco, for example, which has very significant production in the Northeast, also began discussions at the legislative level and I believe that the measures announced today in Alagoas will serve as an example for the other states in the region to review the granting of tax benefits for the import of milk and dairy products”, he added.

The president of the Agriculture Federation of the State of Alagoas (FAEAL), Álvaro Almeida, also assessed the announcement made by the state government as positive. “Alagoas has been generating jobs and income, a fact proven by studies by Banco do Nordeste, which highlighted that the increase in Alagoas’ GDP had a huge influence on the productive sector. So, our gratitude is to say that we are together and what we know how to do is produce, generate jobs and income so that the State of Alagoas increasingly advances and reaches the place it is due”, he said.

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