The food industry is a very significant sector of the Brazilian economy, representing, in 2016, 10.10% of Brazil’s GDP with revenues of US$ 497.3 billion, according to ABIA – Brazilian Association of Food Industries.


In fact, the importance and strength of the food industry is evident in this current environment of economic crisis, since it presented growth of 1.2% in relation to 2016, a percentage higher than the national GDP growth (0.7%), according to a study carried out by ABIA.


Brazil is currently the 4th largest food producer in the world, behind China, the United States and India, and the second largest exporter, second only to the United States.


Notwithstanding the impressive figures for the sector, the food industry is expected to grow even more in coming years, due to the great territorial extension of the country (5th largest in the world) with enormous potential of expansion of the areas of planting and pasture, the existence of precision agriculture comparable to that of more developed countries and the possibility of increasing the use of agricultural areas throughout the year through crop rotation, intercropping or succession planting.


In parallel to investment for growth in the sector, attention to the environment is also essential, with sustainable agriculture and livestock farming becoming increasingly important.


In this sense, in order to address the problem of greenhouse gas emissions caused by the increase in livestock farming, EMBRAPA (Brazilian Agricultural Research Corporation) has created a carbon neutral brand for beef – Carne Carbono Neutro (CCN). Through this brand, it will be possible to attest that the meat originated from livestock farming in which livestock raising is integrated with forest, which reduces greenhouse gas emissions.


Regarding agriculture, there has been a lot of investment in so-called precision agriculture, a management process that analyzes each type of soil to discover nutrients and drainage, as well as making it possible to detect diseases and insects which could harm production.


The consequence is reduced use of fertilizers and pesticides and increased productivity and product quality. With greater sustainability, it will be possible to increase productivity and quality of the food, improving the economy and the performance of the companies in the industry.


Moreover, another issue faced by the food industry is the high tax burden to which food is subject.


In fact, even though the National Congress is discussing tax relief, industry and consumers are currently subject to a charge of approximately 33% of the value of the product, with families on incomes below two minimum wages having 30% of its income committed to food expenses (Federation of Industries of the State of São Paulo – FIESP data).


In fact, the high tax burden is extremely detrimental to the industry, as it negatively impacts those on low-income and decreases the creation of new jobs in the sector.


For this reason, one of ABIA’s projects is to reduce this burden to a level similar to that of more developed countries (around 7% of the value of the product), in order to improve the access of low-income families to food, increase creation of jobs and, consequently, GDP.


However, in order for the food industry to deal with these problems and to continue to develop sustainably, it is essential that professionals specialized in the sector work and monitor it, to overcome the various difficulties with know-how.


Our team has extensive experience working with the food industry. At Zancaner, Salla and Faustino Law Firm, there are even rural entrepreneurs as well as professionals who have worked for years in companies in the industry, coming to know it in-depth from both sides of the negotiating table.


Zancaner, Salla and Faustino Law Firm has a tax team available to assist clients in possible (but frequent) tax problems, including in the setting up of preventive measures.


We are constantly updating ourselves on what is happening in the food sector in Brazil, to use the most appropriate Legal instruments so as to enable greater security in the sustainable expansion of the industry, helping the entrepreneur to develop the business.