Cotton farming is highlighted in the 2020/2021 Harvest Plan to alleviate losses caused by Covid-19

One of the sectors most affected by the drop in consumption generated by the Covid-19 pandemic, cotton farming, as well as the sugar and alcohol sector, received special attention from the Government within the scope of the 2020/2021 Harvest Plan. The launch ceremony took place this Wednesday (17), at Palácio do Planalto, in Brasília, with the presence of the President of the Republic, Jair Bolsonaro, and the Minister of Agriculture, Livestock and Supply (Mapa), Tereza Cristina, among other authorities high-ranking Government officials, parliamentarians and agricultural representatives. For cotton farmers, the good news was the increase in the limit per CPF for credit for investment in storage of current stocks, which was previously R$ 4,8 million and is now R$ 32,5, with interest of 6 % per year. From now on, this limit will be the same whether for CNPJ or CPF.  

Cotton producers considered the news extremely positive, but, to celebrate, they still depend on regulation and the way in which banks will establish access to credit. This edition of the Safra Plan has resources of R$236,3 billion to support national agricultural production, an increase of R$13,5 billion compared to the previous one. Financing can be contracted from July 1, 2020 to June 30, 2021. 

“This increase in credit volume comes at an excellent time, as cotton consumption will be lower, in the world and in Brazil, due to the pandemic. A situation like this, coinciding with low prices and a large harvest – which we are now starting to harvest in the Central West – indicates that we will have more transit stocks and need to store, even to sell our product better”, analyzes Milton Garbugio, president of the Brazilian Association of Cotton Producers (Abrapa). However, Garbugio fears that, in practice, the producer will not be able to fully access the available resources. “Everything will depend on the banks’ understanding of the producer’s indebtedness analysis, in accordance with what will be standardized. Ideally, the product should be the credit guarantee itself”, says the president of Abrapa. 

Another novelty of this edition of the Safra Plan is that the rural credit line for storage, the Producer Price Guarantee Financing (FGPP), derived from the former Federal Government Loan (EGF), responding to a request from Abrapa, equated CPF and CNPJ in relation to the financed limit. “This makes the Safra Plan more appropriate to the reality of the sector”, says the president. Milton Garbugio praised the work of minister Tereza Cristina at the head of the department. “It has been essential to guarantee the competitiveness of Brazilian agriculture, especially in the current crisis that the world is facing”, he considers.

Sustainability 

The incentive for sustainable production was also highlighted in the 2020/2021 Harvest Plan. The Program for Reducing Greenhouse Gas Emissions in Agriculture (ABC Program), which is the main line for financing sustainable techniques, will have R$2,5 billion in resources with an interest rate of 6% per year, an increase of R$400 million. In the 2020-2021 harvest, producers will have access to the ABC Ambiental line, with resources for forest restoration, aimed at contributing to the adaptation of rural properties to the Forest Code. The interest rate is 4,5% per year. From July 1, 2020, producers will be able to finance the acquisition of environmental reserve quotas, a measure approved by the National Monetary Council. 

There are also incentives for the adoption of technologies related to bioinputs within rural properties and by cooperatives. Producers can access funding modalities, to acquire bio-inputs, or investment, in setting up biofactories within the properties (onfarm). The resources are provided for in Inovagro and, in the case of investments in biofactories, they can reach 30% of the value of the entire financing. For cooperatives, the credit lines are Prodecoop, for the acquisition of equipment for the production of bio-inputs. 

“Sowing, planting, caring, waiting for it to flourish and finally harvesting the fruits of the earth is and will always be something essential and beautiful. An activity completely linked to nature can only have as its path the search for sustainability”, highlighted the minister.  

During the launch of the Safra Plan, President Jair Bolsonaro highlighted that agricultural production did not stop during the pandemic, guaranteeing food for the entire Brazilian population. “All countries have food security as their objective. The city can stop, but if one day the countryside stops, everyone will succumb,” said Bolsonaro.