Climate change increases pressure on rural credit and insurance, says OCB.

Prolonged droughts, frosts, floods, and increasingly frequent crop losses have increased pressure on Brazilian agriculture, placing credit and rural insurance at the center of discussions about the future of agribusiness. Amid the advance of extreme weather events, cooperatives and producers are advocating for the strengthening of public policies focused on risk management, production financing, and the expansion of insurance coverage in the country. This concern has gained even more strength in recent years due to the increase in losses caused by climate and the low coverage of rural insurance in Brazil. “In many regions, producers remain exposed to severe losses without access to adequate financial protection instruments, which compromises not only the continuity of production but also the income of families and the economy of municipalities heavily dependent on agribusiness,” explains João Prieto, Technical and Economic Manager of the OCB System. In this scenario, according to him, agricultural cooperatives have a strategic role. "Present at different stages of the production chain, they offer technical assistance, marketing support, production organization, and access to credit for thousands of rural producers, especially small and medium-sized cooperative members. Furthermore, cooperatives also act as structures of economic and social protection during times of crisis, helping producers to cope with losses and maintain productive activity even in adverse scenarios." For federal deputy and coordinator of Infrastructure of the Parliamentary Front for Cooperativism (Frencoop), Tião Medeiros (PR), strengthening rural insurance policies is fundamental to guaranteeing greater security for the Brazilian countryside. "Brazilian agriculture has faced extremely difficult times in recent years, mainly due to adverse weather events and crop failures. The low coverage of rural insurance in Brazil further aggravates this situation, leaving many producers unprotected and at the mercy of fate, exposed to losses caused by droughts, frosts, floods, and other climatic phenomena, which can even lead rural producers to bankruptcy," he stated. For the parliamentarian, expanding access to protection tools is essential to guarantee stability in the productive sector. “Projects aimed at strengthening rural insurance are fundamental to guaranteeing greater security for men and women in the countryside, by expanding access to insurance protection and allowing producers to work with more peace of mind, without producing under immense pressure. Strengthening agriculture means guaranteeing security for those who produce, generate jobs, and sustain our country's economy,” he adds. Among the proposals under debate in the National Congress, the project authored by Senator and Vice President of Frencoop for the Senate, Tereza Cristina (MS), seeks to modernize the national rural insurance policy, expand the funding sources for the Rural Insurance Premium Subsidy Program (PSR), and enable progress in the regulation of the Catastrophe Fund. “Credit is fundamental to guaranteeing investment, production, and economic development in the countryside. But, given the increase in climate risks, rural insurance also becomes an indispensable tool to provide predictability and security to producers and cooperatives,” emphasizes João Prieto. According to him, strengthening these mechanisms means protecting the entire production chain. “Cooperatives act directly in supporting producers, especially during difficult times. Therefore, expanding access to credit and modernizing rural risk management tools is an essential measure to guarantee competitiveness, productive continuity, and economic stability in Brazilian agriculture,” he adds. 

This text was translated by machine from Brazilian Portuguese.