Rural debt decree provides for renegotiation of more than R$100bn
A provisional decree providing for the renegotiation of more than R$100 billion in rural producers’ debts was published on Wednesday (15), with an estimated annual fiscal impact of R$3.6 billion on the National Treasury.
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Following a meeting with Chamber of Deputies Speaker Hugo Motta (Republicans of Paraíba) and other lawmakers, Finance Minister Dario Durigan said the government and Congress’s agribusiness caucus had reached agreement on the rules.
“The fiscal impact will be mitigated. That is our commitment to producers,” he told reporters after the meeting. “We will offer favorable repayment terms and interest rates, but with strict eligibility criteria—for those who truly need it, not everyone—so that the fiscal impact stays below R$4 billion.” Last week, officials had put the expected additional annual cost to the federal government at R$2 billion to R$3 billion.
Senator Tereza Cristina (Progressives Party, PP, Mato Grosso do Sul), vice president of the Parliamentary Agricultural Front (FPA), who attended the meeting, said negotiators had reached the “best possible agreement” with the government on debt restructuring. She acknowledged the decree would not cover all indebted farmers but welcomed the progress made.
Durigan said the program would “give farmers the breathing room they need to move forward.” While reiterating that the decree would not benefit every farmer, he described the text as the “optimal solution” within the constraints the Finance Ministry faces in committing future budget resources.
“The goal of this decree is to put this debate to rest and reduce delinquency in Brazilian agribusiness. We need to offer good credit on favorable terms to our farmers,” he said. Durigan added that the decree should also improve access to the 2026/27 Crop Plan, launched two weeks ago.
The minister said the government had made every effort to accommodate the Parliamentary Agricultural Front’s proposals. Two requests were rejected, however: including producers’ private-sector debts in the restructuring and setting single-digit interest rates. Both had drawn criticism for risking a further deterioration of the country’s fiscal accounts.
In a statement, the FPA said negotiations had moved toward a “workable understanding,” calling the decree “a response to the urgent situation facing thousands of producers who need to restructure their debts, regain access to credit and resume production.”
“We worked to preserve the core elements of the proposal under discussion: restoring access to low-interest credit, resuming the production cycle, and creating the conditions for producers to get back to paying, investing and producing,” the statement said.
As Valor previously reported, the decree creates two credit lines with different terms and interest rates.
Producers who suffered two crop losses resulting in at least a 30% drop in gross income between 2019 and 2025, whether from weather or market conditions, will be eligible to renegotiate their debts over eight years, including a two-year grace period. No down payment will be required, though interest must still be paid during the grace period. Interest rates will run at 6% for small producers, 9% for medium-sized producers and 12% for large producers.
Financing caps under this track will be R$400,000 for producers enrolled in the National Program for Strengthening Family Farming (Pronaf), rising to as much as R$1 million; R$2 million for those under the National Support Program for Medium-Sized Rural Producers (Pronamp), with a R$4 million ceiling; and up to R$4 million for all other producers.
Producers who suffered more severe losses will qualify for lower rates and longer terms. Those who can document losses across three harvests between 2019 and 2025, with at least a 40% drop in gross income, will have ten years to repay, including a two-year grace period, at interest rates of 5%, 8% and 11% for small, medium-sized and large producers respectively. Financing caps will be R$500,000 for Pronaf farmers, rising to R$1 million; R$2.5 million for Pronamp participants, with a R$4 million ceiling; and up to R$8 million for other producers.
The government also opened the door to replacing defaulted Rural Product Notes (CPRs) with new notes carrying repayment terms of up to eight years. That provision applies only to notes issued by rural producers to financial institutions—that is, bank debt—and market-based interest rates will apply to the new instruments.
Agrarian Development Minister Fernanda Machiaveli said the decree would benefit a significant share of family farmers who had not yet resolved their debts through the Desenrola Rural relief program, calling it “well-deserved relief for those who produce the food that reaches Brazilian families’ tables.”
Delinquency among family farmers “remains very low, but there is a meaningful segment that has had to renegotiate its debts, sometimes more than once, and will now be supported by this decree,” the minister said. Agriculture Minister André de Paula, who did not take part in drafting the decree, was contacted but did not respond.
The debt restructuring will draw on traditional rural credit funds, both subsidized and market-rate, across regulated and free-market lines. The government kept open the possibility of tapping “other sources,” including the Pre-Salt Social Fund and other public funds overseen by the Finance Ministry, though it does not currently intend to use them.
The decree also creates a guarantee fund for agribusiness credit operations, which the federal government is authorized to capitalize with up to R$2 billion; financial institutions and state governments may also contribute. Durigan said he expects the fund to offer “greater protection” and to help lower spreads and interest rates over the long run, keeping credit flowing to Brazilian farmers.
Senator Cristina thanked Durigan and credited the government with flexibility in agreeing to include CPR-linked debts in the restructuring, noting that such instruments account for more than half of all rural debt. “It will help the entire production chain,” she said. “Today is a very important day for Brazilian agriculture. This isn’t an election issue—it’s a Brazil issue.”
(Giordanna Neves contributed reporting from Brasília.)
