Government considers setting up subsidiary for Conab
Fernanda Machiaveli
Fabio Rodrigues-Pozzebom/Agência Brasil
The federal government is considering setting up an independent subsidiary for the National Supply Company (Conab) in 2027. The goal is to allow revenue generated by the state-owned company—from sales of agricultural products held in public stocks and the leasing of storage facilities and services, for example—to flow directly into the company’s own coffers and be reinvested in other initiatives with less bureaucracy.
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The idea is to reduce Conab’s dependence on the federal budget and strengthen its financial sustainability, Agrarian Development Minister Fernanda Machiaveli told Valor. “We are studying an institutional arrangement that would allow Conab to have an independent subsidiary, enabling it to collect revenue from product sales and reinvest those funds.”
As part of its strategy to achieve greater financial sustainability, the state-owned company is also seeking to ease pressure on its finances and is therefore considering introducing a voluntary severance program.
Currently, when Conab sells corn from public stocks to small livestock farmers through its Counter Sales Program (ProVB), the proceeds are transferred to the federal government’s single treasury account. The company can only use those funds if they are subsequently allocated to it through the budget process.
Conab’s main source of revenue is the sale of agricultural products, which has increased as the government has resumed its public stockpiling policy. The company recorded sales of R$78 million in 2023, R$130 million in 2024 and R$194.6 million in 2025. Sales have already reached R$158.4 million this year, according to Arnoldo Campos, the company’s director of supply.
Sales are expected to increase in 2027, with the planned marketing of at least 100,000 tonnes of rice from public stocks and continued sales of stored corn, Campos said. Conab also generates revenue by providing storage services and leasing facilities to third parties. Some of its units have already generated R$30 million a year from these activities.
“Conab is classified as a budget-dependent state-owned company and cannot implement any kind of innovative arrangement. To truly modernize, we will have to take steps toward a more ambitious management model,” Machiaveli said. According to the minister, the ability to reinvest its own revenue would encourage these initiatives and expand the company’s revenue-generating opportunities.
The strategy to “modernize Conab’s structure” depends on changes to the company’s legal framework that are still under consideration.
Regarding the voluntary severance program under review, the minister said it would help ease the company’s financial burden. Conab has nearly 3,000 employees, and its annual payroll approaches R$1 billion. In 2026, the company’s initial budget was R$1.8 billion. Slightly more than R$200 million was allocated to building agricultural stocks, with an additional R$900.1 million in funding provided over the course of the year.
The severance program is being developed with employee participation, according to Machiaveli. It is expected to target around 1,000 former employees of the Brazilian Food Company (Cobal) and the Brazilian Storage Company (Cibrazem), who joined Conab’s workforce after being granted amnesty following mass layoffs carried out under President Fernando Collor (1990-1992), when the two companies were dissolved. These employees have a “significant impact” on the current payroll, she said.
The new operating model for Conab is still being studied, with input from the Brazilian Development Bank (BNDES) and the Secretariat for Coordination and Governance of State-Owned Enterprises (Sest), part of the Ministry of Management and Innovation in Public Services (MGI), with funding from the Dom Cabral Foundation. Other ideas are also being considered, including providing services under management contracts while retaining the revenue generated.
The proposed restructuring comes as Conab expands its role in building and maintaining public agricultural stocks and pursues plans to broaden its food supply initiatives. One proposal would have the state-owned company purchase products from family farmers and sell them to small retailers, often in the outskirts of major urban centers, where unprocessed foods are either unavailable or more expensive.
