Farsul says 88% of rural debt in Rio Grande do Sul is excluded from the renegotiation bill.

A survey by the Economic Advisory Department of the Rio Grande do Sul State Agriculture Federation (Farsul) shows that 88.3% of the outstanding balance of a sample of rural credit contracts analyzed by the entity are currently unable to access the facilitated conditions of Provisional Measure No. 1,376/2026, which created credit lines for renegotiating debts in the sector. Of the R$ 93 million in outstanding balance analyzed, only R$ 10.85 million (11.7%) meet the eligibility conditions stipulated in the regulation. "We conducted a study with real cases, from producers who were willing to share their contracts with us so we could assess how much of it would fit and how much wouldn't, because we saw that the Provisional Measure was very limited, especially regarding CPRs (Rural Product Certificates) and investments. We ran the operations of each producer and the value came to just over 11% of the estimated amount. We have a universe of debt that keeps growing, doubling every 12 months, and a solution that doesn't even come close to addressing the problem," says the chief economist of Farsul, Antônio da Luz. The most critical point is the Rural Product Certificate (CPR), which already accounts for 42.8% of all rural credit granted in Brazil in the 2025/26 harvest (compared to 37.4% in the previous harvest), according to the Ministry of Agriculture and Livestock, surpassing traditional financing as the main instrument for financing production. Even so, the most advantageous entry point of the Provisional Measure, with controlled interest rates between 6% and 12% per year, only mentions financing, marketing, and industrialization, without including the CPR (Rural Product Certificate). A producer with a current CPR, renegotiated with the creditor, currently has no way to access the facilitated conditions. In the Farsul sample, these operations total R$ 10.55 million. For those already in default, the Provisional Measure provides a specific route, but restricted to CPRs issued in favor of banks, leaving out those issued to cooperatives and input suppliers, common in financing production in Rio Grande do Sul. The survey draws attention to what it describes as a "Gaucho paradox": according to Serasa Experian, Rio Grande do Sul has the lowest rural default rate in Brazil, 5.3% in the fourth quarter of 2025. At the same time, data from the Central Bank shows that the state concentrates the largest portfolio of problematic rural credit in the country in absolute value, amounting to R$ 39.9 billion in April 2026, almost double that of Mato Grosso, the second-placed state, with R$ 21.8 billion. "According to the Central Bank, Rio Grande do Sul has the largest distressed loan portfolio in Brazil, with the highest number of extensions and renegotiations. But, on the other hand, the producers in Rio Grande do Sul have the lowest default rate in the country. To remain current on their payments, they accepted absurdly expensive and difficult-to-honor extensions and renegotiations, but they went ahead and did it, hoping for a more structured solution. And the Provisional Measure left out precisely these producers, who made a sacrifice to maintain their current payment status. It's a serious mistake to punish those who made the most effort," says Antônio da Luz. "Even current operating loans, the category with the best performance in the sample, require prior formalized renegotiation; current investment loans have no entry point today," he adds. Based on this diagnosis, Farsul is submitting six proposed amendments to the text to Congress during the period for converting the Provisional Measure into law, which ends 120 days after publication: include the CPR (Rural Product Certificate) among the instruments of item I, under the conditions of financing; expand Article 6 to accept CPRs issued in favor of cooperatives and input suppliers; allow investments renegotiated through a formal addendum, even without an express declaration of default, to access the facilitated line of credit; change the fixed deadline of May 31, 2026 (prior to the publication of the Provisional Measure itself, on July 15) to a criterion linked to the date of contracting the new line of credit; make an exception to the prohibition for those who renegotiated under Provisional Measure 1,314/2025, when there is a new loss event; and create a provision for working capital, which is currently not covered by any item of the regulation. Together, the proposals would address the R$ 82.15 million currently outside the scope of the Provisional Measure in the sample, without altering the merit parameters already defined by the legislator. Provisional Measure 1,376/2026, published on July 15, authorizes rural credit lines for renegotiating debts related to operating costs, investments, and CPRs (Rural Product Certificates), in addition to the Union's participation in a guarantee fund for producers affected by climatic events, with interest rates of 6% to 12% per year and terms of up to ten years for those who qualify. 

This text was translated by machine from Brazilian Portuguese.