Participants call for fiscal adjustment, agricultural insurance, and policies aimed at the sector.
High interest rates and difficulty accessing credit dominated concerns among executives from a wide range of agribusiness segments, as well as farmers and industry leaders who attended the “Vozes do Agro” (“Voices of Agribusiness”) event hosted by Globo Rural and Valor. Participants in several panel discussions argued that addressing the problem will require fiscal adjustment, targeted policies, and better farm planning.
Agricultural machinery representatives—among those most affected by the credit-access crisis and high interest rates—said agribusiness is facing “a perfect storm and then some,” as financing difficulties are compounded by low commodity prices. They noted that the sector has endured difficult periods before, but with lower interest rates.
Some agribusiness suppliers also complained about the “overuse” of court-supervised reorganization. An agricultural inputs executive said the procedure is not always used by those who genuinely need it, helping make credit more expensive and restrictive.
Executives and farmers advocated fiscal adjustment to address the problem, along with targeted solutions such as strengthening agricultural insurance. In their view, expanding insurance would lower coverage costs and mitigate credit risk, reducing borrowing costs.
A credit industry executive suggested redirecting some of the resources currently used to subsidize interest rates under the Crop Plan toward agricultural insurance subsidies. Credit subsidies range from R$12 billion to R$15 billion, while insurance subsidies total about R$1 billion. One farmer also called for a review of the Crop Plan. “Operating-cost credit should not exist. Farmers need to be able to pay for at least their seed and fertilizer,” he said.
An agricultural inputs executive said the government should support financing structures developed jointly with the private sector through blended-finance models, in which the government would assume more risk to expand credit supply.
To separate “the wheat from the chaff,” agricultural technology executives advocated credit-scoring mechanisms for individual farmers to support low-cost, easy-to-access financial solutions.
At the farm level, farmers will need to professionalize their operations, according to a financial-sector representative. This means adopting more risk- and price-management practices and improving business administration. “In a scenario of climate extremes, scarce credit, and high interest rates, this is one factor under our control,” a farmer agreed.
As part of risk management, farmers who invest in conservation practices consider regenerative agriculture a competitive advantage. They said there is already a consensus that the benefits of regenerative agriculture are evident in both environmental and financial sustainability. However, these farmers believe existing policies, such as the Low-Carbon Agriculture Plan (ABC Plan), are insufficient to meet demand and expand this farming model.
Some participants fear the credit crisis will disproportionately affect farmers with smaller properties. Technology company executives said banks and trading companies still treat agriculture as if all farmers fit an average profile. “While large farmers are visible, small farmers remain invisible,” one industry representative said.
According to these executives, more clearly defined public policies are still needed to help smaller farmers in particular obtain financing to incorporate technology into their fields.
Agricultural inputs industry sources and farmers also voiced concern about a possible fertilizer shortage for the new crop season. An industry leader warned of a genuine risk of reduced food production and even threats to food security in Brazil, particularly because the country also supplies international markets.
Executives called for support for Brazil’s fertilizer industry and reduced dependence on imports. This would include incentives for the petrochemical sector to increase production of materials such as sulfur. They also advocated policies to lower natural gas prices in Brazil, since gas is essential to nitrogen fertilizer production. Other proposals included exploring domestic rock deposits and using biomethane.
Fertilizer industry participants also expressed concern about competition with the electric-vehicle industry for sulfur and with data centers for electricity.
The agricultural machinery sector also called for support for domestic industry. During the panel discussions, industry executives expressed concern about imports from China. “We are not against opening the market, but we need to have production here,” one of them argued.
Executives from several sectors also expressed concern about the lack of regulatory and legal certainty. Industry representatives said delays in implementing legal frameworks such as the Bioinputs Law make investment more difficult.
Farmers also criticized litigation over laws already enacted, including environmental licensing legislation, which creates legal uncertainty. They therefore called for environmental law to be modernized to reduce litigation. Participants argued that secondary regulations carrying the force of law often create bureaucracy in environmental licensing for agribusiness.
Farmers are also concerned about the sector’s image abroad. They believe Brazil needs to communicate the sustainability of its agricultural production more effectively. “The sector is judged by the exception to the exception,” one farmer complained.
Source - https://valorinternational.globo.com
