The 2019/2020 Harvest Plan, launched this Tuesday (18), provides more financing options for rural producers. Some measures to improve access, increase the supply of credit and reduce financial costs will be implemented through a provisional measure: CPR in dollars, the Fraternal Guarantee Fund, Affected Assets and interest equalization for cereal farmers.
The Agribusiness Credit Letter (LCA) resources for rural credit rose to R$55 billion, an increase of 21%.
Since the beginning of the year, the government has unlocked LCA interest rates, since, until then, 40% of targeted LCAs had to be lent at interest rates of up to 8,5%. With the removal of this condition, fundraising through this title increased. Now, with the increase in funding and, consequently, the offer of financing with resources from this source, the rate varies from 8,5% to 10,5%, depending on the borrower.
The LCA issued by banks is backed by agribusiness credit rights issued by rural producers and their cooperatives. The government requires that 35% of resources from this source be directed to rural credit.
One of the advantages of the LCA is that it allows “funding” (resources for investment) of rural credit and does not require money from the National Treasury to equalize interest rates.
Through the provisional measure, the Rural Product Certificate (CPR) may be issued with a correction clause for exchange rate variation, that is, in dollars, a long-standing demand of the sector. With this mechanism, the producer will be able to finance itself with external resources. “It can be used, for example, for a cooperative or an input distributor to back other securities that these companies issue, the CRA (Agribusiness Receivables Certificates) AND CDCA (Agribusiness Credit Rights Certificate)”, explains the Secretary of Agricultural Policy from the Ministry of Agriculture, Livestock and Supply, Eduardo Sampaio Marques.
The bank acquires the CPR and advances financing to the producer or cooperative, who undertakes to financially redeem the security upon maturity.
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With the fund, the idea is to facilitate producer access to credit lines for debt renegotiation. In the solidarity fund, a creditor will organize groups of debtors who will cross-guarantee.
Secretary Eduardo Sampaio Marques highlights, for example, that the National Bank for Economic and Social Development (BNDES) has a debt renegotiation line worth R$5 billion. “This line has had low performance. One of the reasons is that the producer has no guarantee to offer,” he says.
It will allow the producer to divide up his property to offer as collateral for agricultural financing.
Currently, the producer needs to offer the entire property as collateral, which is sometimes worth five or ten times more than the value of the financing. With this split, the idea is that it can take out more loans. “The financial institution does not want to take the farm, it wants to have guarantees”, highlights the secretary.
Another measure is the equalization of interest rates so that cereal companies can obtain financing for the construction of silos and warehouses through the Program for Construction and Expansion of Warehouses (PCA).
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