Negotiations on rural debts end without agreement.

Members of the Parliamentary Agricultural Front (FPA) met this Tuesday (July 7th) with the government's economic team to hear proposals related to rural debt. The meeting ended without an agreement, but the group signaled that it does not intend to abandon the pillars of Bill 5.122/2023.

“We understand that those who suffered climate-related losses truly need assistance, specifically those in Rio Grande do Sul, which is a very urgent situation that we need to resolve. But the core of the text approved in the Senate was precisely the inclusion of those who suffered income loss due to rural debt problems. So, we will insist on this and we will absolutely not give it up,” highlighted the president of the FPA, Deputy Pedro Lupion (pictured). 

The meeting took place amidst the final stages of the bill's processing. The text originated in the Chamber of Deputies, where it was approved last year. In June, it passed through the Federal Senate and returned to the Chamber after undergoing changes. Now, the deputies must decide whether or not to approve the changes made by the senators. There is no room for further modifications. 

According to Lupion, the government presented the idea of ​​a Provisional Measure (MP) as an alternative to the bill. He stated that there is agreement on "a good part" of the suggestions, as they address points in the legislative proposal. However, crucial issues still need to be discussed, such as the amount of the operations, the criteria for classifying producers, and the conditions of interest rates and terms.

The proposal approved in the Senate guarantees:

• Credit limit of R$10 million per beneficiary and up to R$50 million for cooperatives;
• Eligibility based on proof of a loss of at least 30% of gross income in at least two or more harvests between 2019 and 2025;
• Interest rates range from 3,5% to 7,5%, depending on the size of the producer, with terms of up to 13 years, including a minimum grace period of two years.

The proposal presented by the Ministry of Finance this Tuesday, however, has different points:

• maximum of R$ 8 million per beneficiary;

• Producers affected by adverse weather conditions would be the beneficiaries, not taking into account producers who suffered a loss of income;
• Interest rates ranging from 6% to 12% and repayment terms of up to 8 years, with a two-year grace period during which interest is paid.

The suggestion presented by the government maintains the scope foreseen in the bill, that is, the occurrence of problematic events must be in harvests between 2019 and 2025. The time window for delinquent operations was also preserved, covering unpaid debts between January 1, 2024 and May 2026.

Regarding the use of constitutional funds, Lupion stated that the government has not contested the use of these resources. Concerning the creation of a guarantee fund, there are positive indications that this measure will also have the support of the Executive branch.

“We discussed the issue of the composition of the guarantee fund, which has a cost for the government. We talked about the primary impact of interest rate equalization, but the government even agrees with the need for this guarantee fund to lessen the impact. And at no point was there any questioning of the constitutional funds,” commented the president of the FPA.

Next Steps

Also on Tuesday (July 7th), technical teams that helped shape the bill will analyze the suggestions presented by the government. The idea is to understand to what extent it is possible to build a convergence with the text that is in the National Congress.

“We will work to see where we can get to with this text, to see the limit and the eligibility criteria, the interest rates, the question of how much this equalization will cost, and also the possibility of serving the largest possible number of producers,” said Lupion. Even so, the president of the parliamentary group emphasized that the basis of the discussion is what is proposed in Bill 5.122/23. “We do not accept the end of the Senate's project,” he stated.

If no agreement is reached, the group's intention is to proceed with the text as approved by the senators. "If there is no agreement, then we have the instruments of pressure," Lupion indicated.