Debt is increasing in the agricultural sector following high interest rates, climate-related losses, and falling income, warns FPA.

After years of driving record production, exports, and economic growth, rural producers have faced a combination of high interest rates, losses due to weather events, and a contraction in credit that has increased indebtedness in the agricultural sector and jeopardized the continuity of agricultural activity in different regions of the country. Sector leaders affirm that the increase in debt is not linked to disorderly expansion or speculation, but to the attempt to maintain production in the face of rising costs for fertilizers, diesel, and inputs, coupled with the decline in crop profitability in recent cycles. "The producer didn't become indebted because they wanted to grow too much. They became indebted trying to continue producing," emphasizes the president of the Parliamentary Agricultural Front (FPA), Deputy Pedro Lupion (Republicanos-PR). Data from the Ministry of Agriculture indicate a slowdown in operations under the 2025/2026 Harvest Plan. Contracts for operating costs registered a 13% decrease, while investment lines fell by 20% compared to the previous cycle. Programs aimed at modernizing production, such as Moderfrota and Proirriga, have seen a reduction of nearly 50%. Losses due to climatic events worsen the situation in the South. The situation has worsened in states affected by extreme weather events. In Rio Grande do Sul, producers have been dealing with successive droughts for years and, in 2024, suffered from historic floods that affected more than 206,000 rural properties, according to the state's Civil Defense. A survey by the Rio Grande do Sul Agriculture Federation (Farsul) estimates that accumulated losses in Rio Grande do Sul's agricultural sector have exceeded R$ 100 billion in the last five years. The current president of the organization, Domingos Velho Lopes, stated that rural producers in Rio Grande do Sul are facing one of the most difficult periods in recent decades due to the sequence of extreme weather events and the increased cost of credit. “The world sees us as responsible for food security, as a friendly country, capable of producing food and energy,” declared Domingos Lopes after assuming the presidency of the organization in 2026. In municipalities in the interior of Rio Grande do Sul, farmers report selling machinery, renegotiating leases, and difficulty financing the next harvest. “There are producers who aren't discussing profit. They're trying to figure out how they're going to continue planting,” summarizes a leader in the state's agricultural sector. Mato Grosso faces financial pressure. Financial pressure has also hit Mato Grosso, the country's main grain producer. With the fall in international prices for soybeans and corn and the increase in financing rates, farmers have faced difficulties renewing credit operations and contracting financing for the next agricultural cycle. The president of the Mato Grosso Soybean and Corn Producers Association (Aprosoja-MT), Lucas Costa Beber, stated this year that the combination of high interest rates, decreased productivity, and falling profitability has compromised the payment capacity of a significant portion of the state's producers. “We are not asking for debt forgiveness. The producer wants time to continue producing and honor their commitments,” stated Lucas Beber during a debate on rural credit and indebtedness promoted by the entity. In another discussion about the financial crisis in agriculture, rural producer Regis Porazzi stated that many farmers have begun operating at their financial limit after successive losses in profit margins. “We are unable to pay our bills because our productivity has become very close to our production costs,” he declared. According to Porazzi, many producers have resorted to private lines of credit with interest rates exceeding 16% per year due to the contraction of official credit. Matopiba reduces investments In Matopiba, a region encompassing areas of Maranhão, Tocantins, Piauí, and Bahia, producers report reduced investments and increased pressure from banks after a drop in productivity caused by irregular weather patterns. Representatives of the agricultural sector describe the current scenario as a “perfect storm,” resulting from the combination of high interest rates, credit contraction, increased production costs, and successive weather-related losses. “The sector’s concern is that the worsening financial situation will lead to a reduction in planted area and less investment capacity in the coming cycles, impacting food production and inflation,” concluded the president of the FPA, Congressman Pedro Lupion. Congress increases pressure for renegotiation. Faced with this scenario, the Parliamentary Agricultural Front has intensified its political lobbying in the National Congress around Bill No. 5,122/2023, which provides mechanisms for renegotiating rural debts with resources from the Social Fund. The proposal has become a priority for the caucus in the Federal Senate. The vice-president of the FPA in the Senate, Senator Tereza Cristina (PP-MS), is working to advance the text in the Committee on Economic Affairs (CAE), while agricultural entities advocate for a broader solution to the financial liabilities accumulated by producers. In addition to emergency renegotiation, parliamentarians and entities advocate for strengthening rural insurance, expanding guarantee funds, and building a multi-year agricultural policy that provides predictability to the financing of Brazilian agricultural production.

This text was translated by machine from Brazilian Portuguese.