Crop Plan: BRL 525 billion allocated to commercial agriculture
Although positive, the increase in available funding is considered insufficient to keep pace with inflation and rising agricultural input costs.
The increase in the cost of fertilisers and diesel fuel has been intensified by geopolitical conflicts, including those involving Iran and Ukraine.
The interest rate applicable to the main operating credit facility was reduced from 14% to 12.5%, in line with the downward trend in interest rates in Brazil.
Despite being a fundamental public policy instrument, the Crop Plan accounts for an increasingly smaller share of the agribusiness sector’s annual financing needs.
The sector requires more than BRL 1.2 trillion in financing each year, increasing the role of private and capital markets funding.
Private financing, however, is generally offered at market rates, increasing costs during more challenging economic periods.
The agribusiness sector is also facing lower commodity prices and increasingly frequent and severe climate events.
Even with the use of technologies such as irrigation, extreme weather conditions can cause losses and significant reductions in productivity.
The reduction in funding for agricultural insurance is a cause for concern, as it may limit crop protection and make it more difficult for producers to access credit.
