Crop Plan, which ended last Friday, reached R$340.6bn this season, but disbursements aimed at investments declined to R$89.5bn
07/05/2023
The total disbursement of farm loans in the Crop Plan 2022/23, which ended last Friday, reached R$340.6 billion, close to the original amount planned for the period, of R$340.8 billion. The figure is 8% higher than the amount approved in the previous season (2021/22), of R$314.5 billion.
With high interest rates and falling commodity prices in the second half of the plan, the performance of the investment programs, at R$89.5 billion, was lower than the R$92.4 billion contracted between July 2021 and June 2022. Nevertheless, it exceeded the original amount set aside for the plan, of R$71.9 billion.
The increase in overall performance was driven by contracts for crop financing, which reached R$202.6 billion, an increase of 21% over the R$166.5 billion extended to farmers in the 2021/22 cycle. The pace of financing was lower in the other lines.
Loans for the commercialization of the harvest and industrialization also decreased. There were R$33.3 billion and R$15.1 billion, respectively, compared with R$35.3 billion and R$20.1 billion in the previous cycle. The data were consulted on Monday in the system of the Central Bank and compiled by Valor.
The number of contracts decreased in the 2022/23 crop. There were 1.8 million, about 65,000 fewer than in the previous season. The decrease occurred mainly in investments. The search for loans to cover current expenses increased to 945,000 contracts from 875,700.
The 2022/23 harvest still marked the consolidation of credit cooperatives in second place in the ranking of disbursements by segment, with R$65.7 billion extended, ahead of private-sector banks, whose performance fell to R$58.1 billion. Cooperatives were second only to state-owned lenders, which disbursed R$212.1 billion in financing to the sector. Banco do Brasil alone, the sector leader, lent more than R$152 billion. Caixa Econômica Federal disbursed nearly R$30 billion.
“It is a question of the legitimacy of the cooperatives, which are much more in tune with cooperative farmers. It is a different business model. If the rules of meritocracy are maintained, that is, whoever offers the best conditions for the distribution of farm loan policies to the farmer, we will undoubtedly continue to expand [the share],” said Márcio Lopes de Freitas, president of the Organization of Brazilian Cooperatives (OCB).
For the first time ever, small farmers received more than R$50 billion. The National Program for the Strengthening of Family Agriculture (Pronaf) extended R$51.8 billion in more than 1.3 million contracts. For the 2021/22 harvest, disbursements amounted to R$41.4 billion for 1.4 million contracts. Nevertheless, the performance was lower than that expected for the crop for this public, which reached almost R$60 billion with reallocations made during the season.
Medium-sized producers, on the other hand, tapped the unprecedented amount of R$48.2 billion. The number of contracts increased to more than 202,000 from 165,000 for the 2022/23 crop. Payments to other producers remained stable at R$240.6 billion.
Ademiro Vian, a former director of the Brazilian Banking Federation (Febraban) and a rural credit advisor, said that the 2022/23 Crop Plan was chaotic for investments, given the sudden exhaustion of the Brazilian Development Bank’s subsided funds and the events that increased the turbulence of the season, such as the war in Ukraine, the lack of funds, the elections, and the fall in commodities. For 2023/24, he points to the need for clarity on rural insurance. “The government has directed its subsided funds to small and medium-sized farmers. More than 70% of the bank’s demand is committed to Pronaf and Pronamp. The government clearly said that large farmers must seek financing in the market, but for this they need to have security,” he said. “The government must have a budget for insurance and regulate the disaster fund,” he added.
In the 2022/23 season, agribusiness letters of credit (LCAs) were the main source of financing for loans to the sector. The funds raised through this instrument fed the financing of R$86.3 billion, about a quarter of the total amount granted in the harvest. This amount was 57% higher than in the previous cycle (R$55 billion). Next came mandatory funds obtained through demand deposits in financial firms, with R$70.3 billion, and the subsided rural savings, with R$62.9 billion.
*Por Rafael Walendorff — Brasília
Source: Valor International