Brazil’s Farm Crisis Deepens as Bankruptcies Soar Under High Rates and Tariffs

Brazil’s farm economy, which may reach nearly 30 percent of national GDP this year, faces mounting financial strain.

According to Serasa Experian, judicial recovery requests in agribusiness soared to 1,272 cases in 2024, up 138 percent from 2023. Across all sectors, total filings hit 2,273, the highest in a decade.

The rise accelerated in 2025. Farmers filed 700 recovery requests in the first half of the year, compared with 320 in the same period of 2024.

This sharp increase followed a 2020 court decision that allowed individual rural producers to use the judicial recovery mechanism.

The change opened the door for small and medium farmers to seek formal protection when debts became unmanageable.

The root cause lies in borrowing costs. Brazil’s Selic rate stands at 15 percent, the highest in nearly two decades.

Farm operations depend heavily on credit, but with rates this high, few activities can remain profitable.

At the same time, inputs priced in dollars became more expensive as the real weakened. Fertilizers, pesticides, and machinery now consume much larger portions of farm budgets.

Commodity prices moved the other way. Soybeans, Brazil’s flagship crop, sold for around 200 reais per sack in 2022 but trade between 110 and 145 reais in 2025.

With margins squeezed from both sides, many producers cannot meet obligations without restructuring.

The financing picture may worsen further. Congress is debating Provisional Measure 1.303/2025, which would apply a five percent tax on agribusiness credit notes (LCAs).

Brazil’s Farm Crisis Deepens as Bankruptcies Soar Under High Rates and Tariffs

These notes grew into a key funding tool, and taxing them could raise costs for borrowers and reduce investor interest.

Global trade tensions add another blow. In August 2025, the United States imposed 50 percent tariffs on Brazilian goods.

Banco do Brasil’s $1.4 Billion Plunge Signals Deepening Worries in Brazil’s Farming Economy

Farm exports to the U.S. reached 12.1 billion dollars in 2024, and industry groups estimate potential annual losses at 5.8 billion dollars under the new tariff regime.

The surge in bankruptcies does not reflect irresponsibility among producers but the limits of surviving under such conditions.

Without relief in credit costs or financing options, filings are likely to keep rising. The strain on Brazilian agribusiness matters beyond its borders.

As one of the world’s largest suppliers of soybeans, beef, coffee, and sugar, financial distress in Brazil’s countryside carries consequences for global food markets as well.

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