About 400 kilometers from Porto Alegre (RS), in the city of Pedras Altas (RS), soybean producer Carla Krame says she doesn't know what she will do to meet her financial obligations this year. Since the 2022/2023 harvest, the property she and her husband run has been facing a series of difficulties. “There are several factors aggravating our situation. High interest rates, the [low] price per sack, failed harvests, both due to flooding and drought. So, several factors have come together. If it were just one, maybe we would be shaken, but we would be able to turn things around. We value having a clean record and paying our bills. But it's not easy. This year is a year we won't be able to manage,” she said. The producer's reality is not isolated. Rio Grande do Sul is one of the states most pressured by rural debt, which in Brazil exceeded R$ 170 billion in January of this year, according to data from the Rio Grande do Sul Agriculture Federation (Farsul). Carla comments that, in the 2022/2023 season, the harvest was 10 to 12 sacks per hectare, due to a prolonged drought in the region. Since then, the best harvest was in 2024/2025, with 40 sacks per hectare. However, the positive margin of that harvest was consumed by debts from previous years, and the prospects for this year are also not good. “We still have a few days of harvesting here, but it will be another disappointing harvest. We are closing at around 25 sacks per hectare, which for us also doesn't cover the costs,” she revealed. Without considering the debts, the costs are around 30 sacks per hectare on Carla's property. "It's a very desperate situation. My husband and I are in our 50s and we've never been through anything like this in our lives," she added.
Crops affected by drought
In the same city as Carla, soybean producer Vanessa Kuntzer states that one of the main problems faced by farmers is the lack of resources to pay off maturing debts. In her case, there is a concentration of maturities between this year and 2028. “We managed to renegotiate, but today, the big problem is our cash flow. In the years 2026, 2027, and 2028, our cash flow is completely compromised,” she stated, advocating for extending repayment terms by eight to ten years. The property run by Vanessa and her husband also experienced harvests that did not cover production costs, leading to the contracting of new loans to pay off previous financing debts. She also recalls the case of her brother, who is also facing debt. “A bank offered him a type of personal loan with an interest rate of 76% per year. Do you have any idea what that means?” she questioned. Vanessa also reports the difficulties faced by producers who want to invest in alternatives to cope with frequent droughts. Despite their intentions, current interest rates prevent the viability of new projects. “We see the need to install irrigation here [on the property]. We already have a project ready. However, what is holding us back today? The interest rate and the issue of credit. So, if I manage to get irrigation now, the financing will be at very high interest rates. Even if I have high production because of the irrigation, I won't be able to generate enough cash to pay all my bills,” she pointed out.
For sale
Faced with debt and without the support of their harvests, Vanessa and Carla's solution was to sell part of their assets. Both sold new machinery to help pay off debts. Carla also says that part of the property is being evaluated for sale, but there is a risk of not finding a buyer. "We are having to sell our things, but there comes a point when every producer is in debt. And then, who will buy? There aren't even any buyers anymore," she said. Reorganizing the business was another measure adopted by the producers and their families. Other crops began to have more weight in the composition of the farms' income, such as wheat, oats, rice, and canola. In Vanessa's case, since the beginning of the crisis, the alternative also included raising cattle. "When we had the first drought, we introduced livestock farming. We understood that ideally, for each hectare of soybeans, we would have one head of cattle, as a form of insurance. This is very common here. But we still don't have the quantity we would like," she pointed out. Furthermore, the producer has been negotiating directly with partners and suppliers through Rural Product Certificates (CPRs). The goal is to reduce interest rates and dependence on banks and financial institutions to make planting viable. Even so, the volume is still insufficient. "This year we will have to take out another livestock financing loan to help with cash flow, but the idea is to get out of the banks as much as possible," said Vanessa.
Light at the end of the tunnel
Bill 5.122/2023 is seen by producers as a possible “light at the end of the tunnel”. The proposal provides mechanisms for producers to renegotiate debts under more accessible conditions. “This bill is a relief. I have a lot of faith in this project, that things will move forward, that things will change, because it can't continue like this,” said Carla. Carla and Vanessa also reported that they will follow the next stages of the project. The legislative proposal is scheduled to be voted on this Tuesday (19) in the Senate's Committee on Economic Affairs (CAE). After that, the matter goes to the Plenary of the House and then returns to the Chamber of Deputies. The Parliamentary Agricultural Front (FPA) has been mobilizing to ensure that the project is in force before the launch of the next Crop Plan.
This text was translated by machine from Brazilian Portuguese.