Extrajudicial recovery of rural producers: an instrument to consider

The year 2022 will go down in the history of agriculture in Brazil, the main producer and exporter of global soybeans, as the year of the biggest failure of this cultivar. There is no doubt that the impact will be felt by rural producers who often seek credit to finance planting. The danger of default is real and concrete and should be the challenge faced, especially in the southern region of the country.

In addition to the availability of government aid, which usually helps agribusiness (although the challenges of the election year may bring some shock to this movement), it is noted that there are legal means that can help the producer in renegotiating his debt with its creditors, notably judicial recovery and extrajudicial recovery, both provided for in the Business Recovery Law, Law 11.101/2005.

The rural entrepreneur, thus considered the farmer who, by choice, registers in the public register of commercial companies, under the responsibility of the Commercial Boards, since 2005 has already had at his disposal access to the instruments provided for in the aforementioned legislation. This possibility was reinforced in 2013, with Law 12.873, which made it more flexible to prove that the activity has been carried out for at least two years, equaling the period before registration with the Board.

However, the topic was never calm. Not only due to the aforementioned equivalence to prove the regular exercise of the activity for at least two years, but also under the argument that it would be an option that could come after contracts that eventually generate credits subject to a recovery plan have already been signed. The market was worried about the possibility of changing the rules of the game while it was already underway. These issues were the subject of discussions, taken to the Superior Court of Justice. A lot of legal uncertainty was created from these points.

In 2021, with the reform of the Business Recovery Law (by Law 14.112/2020), art. 49, gained some paragraphs, which limited the scope of the rural producer's judicial recovery: only credits that arise exclusively from rural activity and that appear in the producer's accounting records will be subject; have not been granted within the scope of the rural credit policy; have not been renegotiated under the terms of an Executive Branch act and do not arise from debt created in the last three years, prior to the request, for the purpose of acquiring rural properties, as well as the respective guarantees.

On the one hand, the desired legal security came. On the other hand, the judicial recovery of rural producers ended up becoming less comprehensive.

It turns out that these limitations are exclusively for judicial recovery. In extrajudicial recovery, a similar instrument, but characterized by renegotiation outside the Courts, there are no specific constraints of rural credit, because art. 161 of the Law does not provide for them (only the limitations of article 49, §3, and article 86, of Law 11.101/2005 apply, which also apply to judicial recovery).

Result: it is more open and, depending on the specific case, a possibly more attractive alternative. Therefore, in a scenario of liquidity crisis (impossibility of paying contracted obligations), resulting from the huge announced crop failure, the Recovery Law reserves, for rural entrepreneurs, an instrument that can be the way out to overcome the difficulties that the scenario presents. In other words, an option to be seriously evaluated.

Juliana Biolchi, director of Biolchi Empresarial