{"id":94623,"date":"2025-06-17T10:27:42","date_gmt":"2025-06-17T13:27:42","guid":{"rendered":"https:\/\/murray.adv.br\/?p=94623"},"modified":"2025-06-17T10:27:42","modified_gmt":"2025-06-17T13:27:42","slug":"family-farming-loan-rates-expected-to-keep-stable-amid-budget-strain","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/family-farming-loan-rates-expected-to-keep-stable-amid-budget-strain\/","title":{"rendered":"Family farming loan rates expected to keep stable amid budget strain"},"content":{"rendered":"
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Agrarian Development Ministry aims to maintain subsidized credit for small-scale food production and agroecology<\/strong><\/em><\/h6>\n<\/div>\n<\/div>\n
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06\/17\/2025\u00a0<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n

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Facing a tightening federal budget and challenging macroeconomic outlook, Brazil\u2019s Ministry of Agrarian Development (MDA) is working to preserve low interest rates in the upcoming 2025\/26 Family Farming Plan. The ministry aims to keep annual rates at 3% for staple food production and 2% for agroecological farming within credit lines to be made available to smallholder farmers in July.<\/p>\n<\/div>\n

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The ministry\u2019s main challenge in negotiations with the Ministry of Finance is to secure the budget required to equalize interest rates over the long term. The Treasury\u2019s spending on credit subsidies has risen significantly with the surge in the Selic benchmark rate, which jumped from 10.5% in July 2024 to 14.75%. That rate could change again following the Central Bank\u2019s Monetary Policy Committee (COPOM) meeting scheduled for tomorrow, potentially increasing rural credit subsidy costs further.<\/p>\n<\/div>\n

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\u201cOur main goal is to maintain all the interest rates we\u2019ve managed to achieve, especially for food production,\u201d MDA Executive Secretary Fernanda Machiaveli told Valor. Current interest rates under the Family Farming Plan range from 0.5% to 6% per year, with lower rates for small machinery purchases (2.5%), agroecological activities (2%), and staple food production, including rice, beans, cassava, and milk (3%).<\/p>\n<\/div>\n

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Increased mandatory allocation of funds raised from cash deposits by banks\u2014from 30% to 31.5%\u2014and a higher share of those funds directed to family farming\u2014from 30% to 35%\u2014will help secure more low-interest resources without increasing government spending on subsidies, said Jos\u00e9 Henrique da Silva, director of Financing, Protection and Support for Family Productive Inclusion at the ministry.<\/p>\n<\/div>\n

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\u201cWe save public funds when requirements are higher. This was our initiative to ensure more money for family farming at a lower cost,\u201d Mr. Silva said.<\/p>\n<\/div>\n

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\u201cThe challenge is to ensure that food production continues to grow with support from federal financing. We already have enough resources to provide interest rate equalization, and the government has chosen to ensure that food is financed at special rates,\u201d Ms. Machiaveli added.<\/p>\n<\/div>\n

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While the ministry has not disclosed funding figures for the new plan, it expects to surpass the R$76 billion made available under the current 2024\/25 cycle, which ends June 30. As of May, R$60.2 billion had been disbursed to family farmers\u2014an increase of 5.5% over the same period in the 2023\/24 cycle and nearly 21% more than the equivalent 11-month stretch in 2022\/23. The executive secretary called the outcome a \u201csuccess.\u201d<\/p>\n<\/div>\n

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In some financial institutions, subsidized Pronaf credit for production costs has already run out, indicating strong demand, Mr. Silva said. Despite this, the full amount initially offered is unlikely to be disbursed due to reallocation and adjustments during the cycle. \u201cWe expect the final total to reach R$65 billion by the end of June,\u201d he added.<\/p>\n<\/div>\n

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For the new Family Farming Plan, expected to be launched in the final week of June, the ministry plans to spotlight the sector\u2019s role in addressing climate emergencies, especially as Brazil prepares to host COP30 this year. The initiative will include new credit lines, improved access to climate-related programs through revised rules on limits, interest rates, and eligibility, and incentives for transitioning to agroecological models.<\/p>\n<\/div>\n

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The ministry wants to demonstrate that, although family farming is among the sectors most vulnerable to extreme weather events, it can be part of the solution due to its diversified production, natural resource preservation, and move away from chemical inputs. While farmers in Brazil\u2019s semi-arid northeast have long adapted to drought conditions, other regions are also in need of climate-related support, Ms. Machiaveli noted.<\/p>\n<\/div>\n

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The goal is to create \u201ca Safra Plan that views family farming not only as a solution to hunger and a producer of healthy food, but also as a key to tackling the climate emergency through a more sustainable production model that can now be financed,\u201d Ms. Machiaveli said.<\/p>\n<\/div>\n

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On launch day, the ministry expects to sign several decrees signaling its climate commitments. One will establish the long-discussed National Program for the Reduction of Pesticides (Pronara), which still faces internal resistance within the federal government.<\/p>\n<\/div>\n

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Another decree will introduce updates to the Minimum Price Guarantee Program for Sociobiodiversity Products (PGPMBio), managed jointly with the National Supply Company (Conab). The goal, Ms. Machiaveli said, is to improve program rules to better reach traditional and Indigenous communities. The revamped version, to be called SocioBio+, will be tested on products such as pirarucu fish, nuts, and rubber, which already have minimum prices but will now also guarantee fixed incomes for extractive workers.<\/p>\n

*By\u00a0Rafael Walendorff\u00a0\u2014 Bras\u00edlia<\/p>\n

Source: Valor International<\/p>\n

https:\/\/valorinternational.globo.com\/<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Agrarian Development Ministry aims to maintain subsidized credit for small-scale food production and agroecology     06\/17\/2025\u00a0 Facing a tightening federal budget and challenging macroeconomic outlook, Brazil\u2019s Ministry of Agrarian Development (MDA) is working to preserve low interest rates in the upcoming 2025\/26 Family Farming Plan. 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