In Brazil, farmers in 16 states can renegotiate their loans if bad weather or falling prices hurt their crops. This help, announced by the National Monetary Council, is open until May 31.
Bad weather last season hit soy and corn hard. Falling prices for these and other farm products, plus the high cost of supplies, added to the troubles.
Now, banks can redo loan terms for payments due this year. This is for loans made by the end of last year and aims to help those who are up to date on payments.
This helps cover various farming activities in many states, like soy, corn, and cattle farming. The goal is to make loan terms fairer, even waiving some late fees.
Loans ending from 2024 to 2026 can delay this year’s principal payments. This could move billions in funds, showing significant support for farmers.
This plan helps not just individual farmers but also aims to keep the agriculture sector stable.
It includes specific help for some loans, even if payments are late, considering the unpredictable weather.
By doing this, Brazil aims to keep its agriculture strong despite challenges. It shows the government’s dedication to helping farmers now and ensuring the sector’s future stability.
Background
In a dramatic rise, Brazilian farmers filing for judicial recovery increased by 535% in 2023, reaching 127 requests from just 20 in 2022.
This surge, particularly sharp in the last quarter with a 62% increase to 47 requests, underscores the agricultural sector’s growing financial challenges.
Mato Grosso led with 43 cases, followed by Goiás, Minas Gerais, and Mato Grosso do Sul.
Reuters reports that Serasa Experian’s analysis points to severe drought and falling corn prices as key factors squeezing farmers’ earnings.
The majority seeking help were soybean growers, pasture owners, and coffee producers.
The year saw 35 applications from large landowners, up from five, and 44 from land lessees, a significant rise from eight.
Marcelo Pimenta of Serasa Experian flagged the alarming speed of these increases, driven by weather woes and economic pressures.