Agro gains more versatility in the financial market

The Rural Product Certificate (CPR) is one of the main titles used to finance Brazilian agribusiness. Created in the 1990s, following the publication of law 8.929/1994, the CPR was part of a context of encouraging private financing of the agribusiness production chain. Recent legislative changes – especially the Agro Laws (laws 13.986/2020 and 14.421/2022) – and innovations such as the use of electronic signatures have strengthened the CPR, making it a protagonist in attracting private credit.

The CPR has advantages over similar titles linked to agribusiness, such as the Rural Credit Certificate (CCR). The CPR can be settled physically or financially and the credit does not need to be obtained from an institution that is part of the National Rural Credit System, as is the case with the CCR. 

In addition to the modalities – physical, financial or green –, CPR brings with it other advantages. Law 14.421/2022 allowed the Solidarity Guarantee Fund (FGS) - in which at least two debtors and one creditor participate - to be used in any financial operation linked to rural business activity, which directly impacts the operations that use the CPR.

Sustainability and finance

At a time when agriculture has increasingly become connected with environmental issues, the regulation of § 2, II, of article 1 of law 8.929/1994 by decree 10.828/2021 deserves special attention, which provides for the issuance of of the Green Rural Product Certificate (CPR-Verde) for rural products obtained through activities linked to the conservation and recovery of native forests and their biomes. 

CPR-Verde is characterized as a true payment instrument for environmental services through which rural producers can be remunerated for sustainable initiatives. In this way, conservation and environmental recovery are transformed into assets, which are available to rural producers to obtain credit from the market.

Another benefit of the CPR is the absolute unseizability of assets given as collateral in the CPR, according to art. 18 of law 8.929/1994. What inspires absolute unseizability is the social function of the CPR, since there is public interest in strengthening private financing for agricultural activity. This interest is proportional to the relevance of the sector to the national economy. 

Unseizability prevails even in the face of labor claims. This thesis was defended at the Superior Court of Justice (STJ) in Special Appeal 1.327.643. In the tax aspect, CPR also has advantages. The general rule points to exemption from Financial Operations Tax (IOF) and Income Tax (IR).

Investments

For investment funds, CPR is increasingly becoming an asset of interest for portfolio composition. As of law 14.421/2022, Fiagro's portfolio may include securitization bonds issued by individuals and legal entities that are part of agribusiness, which covers the CPR. The possibility of establishing a Credit Rights Investment Fund (FIDC) or even structuring a Fiagro Híbrido – whose portfolio absorbs credit rights, rural properties and shares in companies in the sector – also appear as options for the CPR. 

Law 14.421/2022 also met the sector's demands regarding the extension of the deadline for registering the CPR, which is now up to 30 days from the date of issuance or amendment. Registration, with an entity authorized by the Central Bank, is a condition for the validity and effectiveness of the CPR. 

According to CMN Resolution 4.870/2020, the CPR issued between January 1st and December 31st, 2023 with a reference value of less than R$50 is exempt from registration. However, this exemption will not apply to CPR issued in favor of financial institutions and other institutions authorized to operate by the Central Bank or, in the case of CPR traded on the stock exchange or over-the-counter markets. From 2024, therefore, all CPRs must be registered with an entity authorized by the Central Bank. 

Given the brief explanation of the main advantages of the CPR, it is clear why this instrument is the most widespread for attracting credit for agribusiness. It allows the financing of all links in the agribusiness production chain and, with CPR-Verde, it becomes capable of linking fundraising to high sustainability standards. Recent legislative changes have strengthened the CPR and, it seems, it will continue to be strengthened as a protagonist in attracting credit for national agribusiness.

By Ronnald Loureiro, lawyer in the Financial Services area at Martinelli Advogados