Yet, government is looking for options to fund infrastructure investments

11/29/2022

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Norberto Ortigara — Foto: Ari Dias/AEN

The reaction of the productive sector in Paraná has buried the state government’s project that intended to tax agribusiness to create a fund for investment in infrastructure, an area that was left unattended after the federal government lowered the sales tax ICMS on fuel on the eve of the elections, plus the fact that the state administration did not renew highway concessions.

Norberto Ortigara, the secretary of agriculture of Paraná, told Valor that the government understood the producers’ revolt about the way the project was presented. The sector, which was responsible for the re-election of Governor Ratinho Júnior, had a strong reaction against the taxation “shoved down its throat” which prevented the drama from having a different outcome than in Goiás, where the state’s deputies approved a similar proposal. “It didn’t sit well with the sector, we acknowledge that they got upset.”

According to Mr. Ortigara, the state administration wants to negotiate a different and viable text with the productive sectors to create a “palatable” contribution for investments in infrastructure.

The fiscal instability is delicate and will require some tax collection measures, said Mr. Ortigara, who is unsure about the possibility of approving the new measure this year. “If nothing is done, even maintaining the current highways will be difficult. There is a brutal drop in tax collection in the state and the municipalities,” he pondered.

The intention is to promote a “dialogue” with the agribusiness and other sectors of the Paraná economy that use the state infrastructure for the collective construction of an alternative. “I no longer believe in that bill due to the way it was presented. We need to build a greater understanding starting from scratch,” he said. “We have to see if there is room to create something similar and if we can make some kind of contribution so that there can be investments.”

But the sector is not willing to give in. Ágide Meneguette, president of the Federation of Agriculture of the State (Faep), reinforced that the sector will not pay the bill alone. “We know that the cash flow has decreased, but we will not accept any kind of new contribution or taxation. If it comes, we will work against it,” he told Valor.

José Roberto Ricken, president of the Paraná Organization of Cooperatives (Ocepar), pointed out that the bill was “absolutely unfeasible” given the scenario of increased costs in the field and climate risks. “Why producers are the only ones to pay for the infrastructure? Are they the only ones who use the roads? There is no room for this type of charge. It will be chaos if this prevails. We are mobilized to prevent this from happening”, he affirmed.

Mr. Meneguette recalled that the entity supported the increase in the ICMS tax rate in the state for some products, from 18% to 19%, approved by the Legislative Assembly this week. “We have to split this bill. It is fair that the society, in general, pays for Bolsonaro’s act of reducing taxes and affecting the budgets of states and municipalities”, he said.

The victory of the sector this week, with the government retreat and withdrawal of the taxation project, is the result of the “democratic pressure” that showed the importance of producers actively participating in the country’s decisions, he said. “The pressure has shaken some deputies, there is no willingness or vote for this anymore.”

In Goiás, there was a riot and invasion of the floor vote, but even so, the deputies approved the taxation. “We are against invading and wreaking havoc on the deputy’s house because we have always fought the invasion of our properties, but we want respect. Violence will not help us to achieve our goals,” said Mr. Meneguette.

According to the Faep leader, they have been warning the government about infrastructure problems since 2017, but neither the current nor the previous administration decided to renew the highway concessions, which expired this year. “I advocate the least possible participation of the state in the economy and in the lives of Brazilians. The state does not have the agility of private initiative,” he said.

The government says that it does not have funds to maintain the highways or to start new projects, such as the paving of rural roads. “The majority of Paraná’s producers have less than 50 hectares, whose income barely guarantees their survival. If they were not organized in cooperatives, they would no longer be in rural activity,” added Mr. Ricken, of Ocepar. “The profitability of the companies that operate in the commercialization of grains doesn’t exceed 2%, on average. So where will these funds come from?”

*By Rafael Walendorff — Brasília

Source: Valor International

https://valorinternational.globo.com/