Brazil delays subsidized farm credit for crop planting
Antônio da Luz
Ricardo Jaeger
Three weeks after the Crop Plan was unveiled, the Finance Ministry has yet to issue the ordinance authorizing the National Treasury to subsidize interest rates this season. In practice, the delay is preventing banks and credit cooperatives from offering R$141.4 billion in federally subsidized credit lines that carry lower rates for farmers.
New crop credit plan to exceed R$600bn
Another R$10 billion from Move Agricultura’s new credit line for agricultural machinery and equipment also remains unavailable because regulations have not been issued.
For now, farmers can access only credit lines with market rates or regulated rates that do not receive subsidies. These account for most of the R$610.3 billion announced to finance the current production cycle. Farmers complain that the funds are not being released promptly and say the delay could increase purchasing costs and create problems with the delivery of inputs for the summer crop.
The Finance Ministry said the Attorney General’s Office for the National Treasury (PGFN) is completing its legal opinion, after which the minister will sign the ordinance. The ministry said the process is following its customary internal procedures and assured that budgetary resources are available to cover the R$1.7 billion in expenses projected through year-end, with no need for a supplemental appropriation.
The 2026/27 Crop Plan will provide R$141.4 billion in credit eligible for interest-rate subsidies: R$97 billion for commercial farming and R$44.4 billion for family farming. The estimated cost to the federal government is R$18.2 billion over ten years.
Unveiled on June 30, the Crop Plan has been in effect since the beginning of this month, but its subsidized credit lines are still unavailable. Without authorization for the subsidies, farmers remain unable to access lower-rate funding amid high costs and uncertainty surrounding planting.
Delays have become common in recent years. The last time the government authorized subsidies to begin on July 1, the start of the crop year, was in 2021. Since then, authorization has taken at least a week. In 2026, however, the delay is the longest in the period, with 21 days having passed without the rules being released.
Sources familiar with the matter said there was no specific reason for the delay, only holdups in the exchange of official documents among the agencies responsible. Banks consulted by Valor said the delay is disrupting their work with customers. However, some applications have already been submitted and are awaiting government authorization.
Antônio da Luz, chief economist at the Rio Grande do Sul State Agriculture Federation (Farsul), emphasized the importance of making credit available at the right time. He said the delay in accessing subsidized funds is forcing farmers to seek more expensive financing to ensure that inputs arrive in time for the next crop’s planting.
“Without the credit being released, farmers end up taking out expensive loans because of the risk of running out of fertilizer and crop protection products amid the war [in Iran] and all the disruption it has caused to the supply of these products,” he said. According to Luz, farmers who continue to wait will create pent-up demand that could complicate the logistics of delivering the products to farms on time.
High debt levels are another obstacle. In Brasília, the government is drafting regulations for debt renegotiations, which also involve interest-rate subsidies. Farmers are waiting for these rules so they can address their liabilities, restore access to credit, and obtain new loans.
“A significant share of farmers need to renegotiate their debts to have their credit limits restored. Banks are still adapting their procedures for these transactions, which should take at least another week,” said Ágide Eduardo Meneguette, president of the Paraná State Agriculture Federation (Faep). Even so, he said he did not expect any problems.
The financial institutions that submitted proposals to operate the subsidized credit lines were informed by the government in June of their allocations and the programs they would handle, but they have not yet been able to begin issuing loans.
The Brazilian Development Bank (BNDES) received the largest allocation, at R$40.5 billion—nearly 30% of the total—primarily for investment programs. BNDES has already issued circulars outlining the rules for accredited financial institutions to access the funds, but its application systems remain closed. The documents did not specify an opening date for financing applications, making it contingent on the publication of the ordinance setting out the allocation and rules for interest-rate subsidies in the new crop year.
Translation: Todd Harkin
