Renegotiation of rural debts will include a mechanism with the FGI (Guarantee Fund for Investments) that could leverage up to R$ 200 billion, says FPA (Brazilian Parliamentary Front for Agriculture).

Farmers across the country are close to having an alternative to renegotiate rural debts accumulated in recent years. An amendment by the vice-president of the Parliamentary Agricultural Front (FPA), Senator Tereza Cristina (PP-MS), was included in Bill 5.122/2023 and could leverage up to R$ 200 billion for this purpose. The initiative authorizes the federal government to increase its participation in the Investment Guarantee Fund (FGI), with a projected additional contribution of up to R$ 20 billion. The resources would be used exclusively as collateral for rural debt renegotiation operations. According to the senator, the measure could make at least R$ 70 billion available for debt extension, but it also depends on the Executive's willingness to support producers. “This fund is what will leave a legacy for agriculture, if it is established. But the government has to understand that it is not enough to create the fund: we need to put resources into it. We know about the fiscal difficulties, the problem of credit and primary expenses, but R$ 20 billion in this fund can leverage more than R$ 70 billion, possibly reaching up to R$ 200 billion,” highlighted Tereza Cristina, this Wednesday (13), during a session of the Economic Affairs Committee (CAE) of the Federal Senate. The president of the FPA, deputy Pedro Lupion (Republicanos-PR), stated that rural producers are facing a “perfect storm” against agricultural production. According to him, the articulation of the last few days has been focused on building effective solutions for indebtedness in the countryside, such as the one presented through the amendment. “We understand that the R$ 30 billion we approved in the Chamber is not enough even to begin the work. Today, producers' debt reaches R$ 150 billion. We need to seek this amount of resources, and this is the alternative we are presenting. Our commitment is to the rural producer. Therefore, we are working to ensure that this debt solution is real and that we can overcome the resistance within the government,” he commented. Bill 5.122/2023 is being processed in the CAE under the rapporteurship of Senator Renan Calheiros (MDB-AL). The parliamentarian highlighted the participation of FPA members in the construction of the text and stated that Senator Tereza Cristina's amendment was incorporated into the report. The vote is expected to take place next Tuesday (19). The group is also working to have the bill voted on in the Senate Plenary in the same week. “Senator Tereza Cristina understands, and I understand equally, that using the FGI (Guarantee Fund for Agricultural Investments) as collateral for the renegotiation of agricultural debts would solve this problem in Brazil once and for all. We would place these bonds on the market, in a private fund, and this would serve for renegotiations from now on,” said Renan Calheiros when discussing the FGI amendment. Race against time The FPA's (Agricultural Parliamentary Front) intention is that the entire renegotiation structure foreseen in the project will come into effect before the announcement of the next Harvest Plan. Therefore, the institutional coordinator of the front, Deputy Alceu Moreira (MDB-RS), argued that adjustments to the report should be made before the vote next week. According to him, this would avoid further modifications when the text returns to the Chamber of Deputies, facilitating quick approval by the deputies. “What we are doing here today is not just a remedy to cure the ills of those indebted due to climate problems. We are creating a new financing system for Brazil,” emphasized the parliamentarian from Rio Grande do Sul. In addition to the resources that can be operated with the FGI guarantee, the proposal creates a specific emergency line for the extension of debts, with an amount of up to R$ 30 billion coming from the Social Fund (FS). The rapporteur also intends to include the possibility of the government using budget resources to create other lines destined for renegotiation. Members of the Executive Branch even mentioned the possibility of making R$ 82 billion available. At the CAE meeting this Wednesday, other members of the caucus reinforced their support for the base report presented by Senator Renan Calheiros. The 2nd vice-president of the FPA, Senator Jaime Bagattoli (PL-RO), highlighted the national scope of the proposal. "I believe that a good part of the Brazilian states and municipalities will fit into these three necessary requirements to regularize the indebtedness that PL 5.122/2023 brings," he said. 

This text was translated by machine from Brazilian Portuguese.