Producers can now file a request for extension of debts arising from rural credits

Producers whose production sales were hampered due to social distancing measures, adopted to minimize the Covid-19 pandemic, gained more time to catch up on installments of rural credit operations, funding and investment. The deadlines, which would expire on Saturday, August 15, were extended to December 15, 2020. The measures, announced in Resolution No. 4840, on July 30, by the National Monetary Council, at the request of MAPA, are also valid for farmers family and cooperatives.

The possibility of extending deadlines is permanent and is provided for in the Rural Credit Manual, but experts recommend taking some care when making the request. “Extension is a consolidated right, but it is not automatic. It is necessary for the producer to correctly make the request to the financial institution. He must submit an administrative application, consisting of a report proving losses and a report on payment capacity, so this is work that we constantly do alongside him”, says lawyer Odara Weinmann, partner at Advagro, a law firm focused on rural law and agribusiness that brings together several professionals in the area and operates throughout Brazil.

The expert's guidance also applies to another item of resolution 4840, which also provides for the extension of debts for rural producers in Rio Grande do Sul who recorded losses due to the drought. In this case, farmers from the 392 municipalities in Rio Grande do Sul that had the emergency situation approved by the government until June 30 of this year are entitled to contract review. Lawyer Odara recommends another precaution: “When submitting the request, it is important for the producer to have proof of delivery. It could be the protocol with the agency, a legal notification or sending a letter with acknowledgment of receipt, there must always be proof that he did everything within the appropriate deadline”, she emphasizes.

If the extension is not granted, it is possible to appeal. “What can happen is that the financial institution remains silent, does not respond within the deadline and notifies the rural producer after the due date, wanting to charge interest and other charges. In this case, we go to court with a preliminary injunction and the judge will order that the debts be extended, according to the ability to pay”, details the lawyer. “Fortunately, knowledge related to rural credit is reaching the judiciary, producers are also more aware of their rights and do not allow interest rates to be changed arbitrarily. What we seek to bring to him is good advice, before formalizing contracts we review them, after formalization we also provide all the guidance and file these legal requests when necessary”, she adds.

Bad weather, such as drought, is inherent to rural production. For Odara Weinmann, Brazilian legislation protects the activity, as a way of returning the State to the requirements that the sector needs to comply with. “All the difficulties are enough, yes, there needs to be this protection, because rural credit and financing lines continue rural activity and guarantee food supply. And the rural producer is entitled to this”, concludes the lawyer.