Banco do Brasil Bets on State Lifeline to Survive Farm Crisis

Banco do Brasil, the country’s top lender to farmers, faces its biggest challenge in years. In mid-2025, the bank saw a huge rise in unpaid farm loans.

Almost 4.2% of its agricultural borrowers fell behind, a default rate over three times higher than last year. These are not small numbers: Banco do Brasil controls 44% of all rural credit in Brazil.

The sharp increase in defaults pushed its quarterly profit down by 60%, to R$3.8 billion ($691 million). Extreme drought and floods in major food-producing regions hurt many farmers, while high interest and production costs made debt harder to pay.

Many who never missed payments before could not keep up. President Tarciana Medeiros now relies heavily on a R$12 billion ($2.18 billion) government program announced in September to turn things around.

This fund aims to help about 100,000 farmers renegotiate old debts and gain as much as nine extra years to pay. Bank managers expect to handle nearly half of these renegotiations.

Medeiros is also making the bank stricter. Loan officers now study borrowers more carefully before lending and push harder to collect overdue debts.

The bank knows if defaults keep climbing, the risk spreads beyond farmers: it threatens rural jobs, food prices, and even Brazil’s exports.

There is another quiet risk. As the US expands sanctions and compliance rules globally, Banco do Brasil must pay extra attention to follow international laws in all twenty countries where it operates.

Missing a detail could mean fines or penalties abroad, so the bank must watch both local farm problems and global rules. The story behind the numbers is clear: Brazil’s farming boom depends on steady credit, and one bad year can shake even its biggest banks.

Banco do Brasil’s recovery hangs on the government’s relief delivering swiftly, its own care in picking clients, and global calm on trade and regulation. If that works, the bank can keep rural Brazil running. If not, consequences could ripple far beyond its balance sheet.

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