Brazil ups 2024-25 crop farm loans by 10pc

Brazil's subsidized farm loan program for medium and large producers in the 2024-25 season will rise by 10pc from the prior season.

The federal government will offer R400.6bn ($71.7bn) in loans to producers, up from R364.2bn in the 2023-24 season. The loans offered under the program, known as Plano Safra, are destined for the crop year starting on 1 July and ending on 30 June 2025.

The total amount set for funding operational costs and commercial transactions is set to rise by 8pc on the year to approximately R293.3bn. The remaining R107.3bn are intended for investments, a 16.5pc yearly increase.

Farmers will also be able to count on credit lines and bond issuances, which are set to add another R108bn in available resources.

Interest rates for investments vary from 7-12pc/yr, depending on the loan, which compares with Brazil's basic interest rate Selic of 10.5pc/yr. For those under the Pronamp program, which is available to medium-sized farmers, interest rates for funding and commercial transactions were fixed at 8pc/yr.

Rates were at 5-12.5pc/yr under the 2023-24 program, while the national interest rate was at 13.75pc/yr at this time last year.

The RenovAgro credit line — aimed at financing sustainable agricultural practices that reduce greenhouse gas emissions — continues with an interest rate of 7pc/yr.

The federal government will also offer R76bn in loans to small-sized farmers, up by 6.2pc from the prior program.

Considering small, medium and large farmers, the loans under the federal program total R475.5bn, a 9pc increase from R435.8bn in the previous cycle.

By Nathalia Giannetti