Lula and the company pilgrimage – 02/01/2024 – Vinicius Torres Freire

The year of political politics will start hot for Luiz Inácio Lula da Silva and Fernando Haddad. There will be turumbamba right away because Congress demands backlogged positions; because he wants to recover amendments that Lula vetoed, because he is angry with the provisional measure that overturned repeated parliamentary decisions, because the religious bench does not want their prebends to be messed with, etc.

The year of business policy had started sweetly, at least for industries hoping to receive easier credit. But it soon turned sour for the government, criticized for reissuing the industrial policy of Lula 2 and Dilma 1 — it wasn’t exactly that, but “image is everything.”

The year will get more difficult because companies and sectors line up at Planalto and Fazenda in order to ask for various types of help. Who asks?

Grain farmers, the milk people. The agricultural sector that wants more subsidies for rural insurance. “Farmers of the air”, the airlines, some almost bankrupt, that ask for large subsidies in the veins of the wings.

The list is not over. There is the case of steel companies, which complain about the avalanche of steel imports, from China in particular. There are companies that will lose tax benefits with the deactivation of Perse, in two years. This “Emergency Events Sector Resumption Program” was created in 2021, during the epidemic, when such businesses were devastated (although this is no longer the case). It was supposed to last two years. Congress extended it.

At least 35 sector entities criticize Haddad and the end of the program, decided via provisional measure at the end of the year. They are travel agencies, hotels and resorts, graduation companies, events, fairs and conferences, tourism, scenography and stands, festivals, musical productions, cruises, cinemas, parks. The subsidy cost just more than R$16 billion in 2023, says the government. The Chamber command wants to restore the program.

Have more. There are 17 sectors that could lose the discount on payroll tax payments (“exemption”), which was removed again by provisional measure at the end of last year. More quietly, there is the shipping industry, which can get extra official credit.

Farmers complain about losses from “climatic events” (droughts, heat and excessive rain), the drop in commodity prices, high production costs, and debts. They want subsidized credit for working capital, postponement of debts with financing for the 2023/24 harvest, etc. The Minister of Agriculture, Carlos Fávaro, has said that help will come from the government. The Confederation of Agriculture and Livestock sent a list of requests to Planalto this week.

Since last year, agriculture has also been asking for more subsidies for rural insurance. With recurring climate accidents, it is clear that planning for planting and insurance risks is precarious, to say the least. Just giving subsidies, if necessary, doesn’t solve it, however.

There was indeed a tide of steel imports from Asia in 2023. Steelmakers say they may stop part of production. Since last year, they have wanted a higher tax on imported steel.

People from steel-consuming industries retort that the extra tariff will make their product more expensive. That the steel mills complain about having full bellies. Dairy people also complain about imports; says that a tax benefit for companies purchasing national milk, approved in 2023, will arrive late.

Some of these lobbies have benches in Congress, such as agriculture. Others do not have as much strength, but can recruit enough parliamentarians to create more political problems for Lula and Haddad. The government, however, has some blame in the lobby registry. It is not uncommon for a minister or similar person to go around saying that it is necessary to help or support the national company. So.

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