Brazil expands agribusiness financing plan

On June 29, the Brazilian federal government launched the 2022/2023 agribusiness financing plan (Plano Safra), which will provide a total of BRL 340.8 billion (about USD 65 billion at the current rate) in credit to support national agribusiness production until June next year. According to the Ministry of Agriculture, the amount represents a 36% increase from the previous year, in which BRL 251 billion (about USD 47.9 billion) were made available to rural producers.

The new plan was announced during a ceremony at Palácio do Planalto, the seat of the national executive power, with the presence of president Jair Bolsonaro, minister of Agriculture Marcos Montes, and other authorities. Of the total resources made available, BRL 246.28 billion (about USD 47 billion) will be allocated to funding and marketing, a 39% boost over the previous year. Another BRL 94.6 billion (about USD 18 billion) will be directed to investments, a 29% growth.

Resources with controlled interest rates will total BRL 195.7 billion (about USD 37.3 billion), and with open interest, BRL 145.18 billion (about USD 27.7 billion). The amount of equalized resources, part of the interest not charged to the borrower, extended by 31%, reaching BRL 115.8 billion (about USD 22.1 billion) in the next harvest, according to the government.

The Plano Safra also expanded, from 50% to 70%, the possibility of using resources from Agribusiness Letters of Credit (LCA). The LCA is a fixed income security issued by banks to finance agribusiness activities. According to the government, expectations are for the measure to generate a more significant share of private agri-finance with the expansion of securities such as CPR, CDCA, CRA, and LCA.

Pronaf & Pronamp

Resources for small rural producers, through the National Program for Strengthening Family Agriculture (Pronaf), rose 36%, totaling BRL 53.61 billion (about USD 10.23 billion), with an interest rate of 5% per year (for food production and socio-biodiversity products) and 6% per year (for other products).

For medium-sized producers, under the National Support Program for Medium Rural Producers (Pronamp), BRL 43.75 billion (about USD 8.35 billion) will be made available, a 28% increase from the previous harvest, with an interest of 8% a year.

Source: ANBA

To read the full original article, please go to: https://anba.com.br/en/brazil-expands-agribusiness-financing-plan/

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