Rural debt is growing and raising alarm bells in agribusiness.

The financial health of Brazilian agribusiness has raised a red flag. In a Technical Note, the Rio Grande do Sul State Agriculture Federation (Farsul), using data from the Central Bank, points out that the "stressed portfolio" of rural credit (which includes delays, defaults, and renegotiated debts) jumped from R$ 72,2 billion in July 2024 to R$ 123,6 billion in November 2025. The 71% growth in the period reveals an accelerated deterioration, concentrated mainly in recent months.

Currently, about 15% of all active rural credit portfolios in Brazil (estimated at R$ 812,7 billion) are under some type of financial stress. Unlike previous crises, the current situation in Brazil is not caused by climatic issues. Farsul emphasizes that the country recorded a record harvest in 2025, which reinforces that the problem is economic.

The entity points to the high level of interest rates as the main culprit, but makes an important caveat: the monetary authority is not to blame. "The root cause lies in the fiscal imbalance, which puts pressure on inflation and forces the maintenance of high interest rates," the document states, reiterating its support for the Copom's decisions in controlling inflation.

An analysis of the implementation of Provisional Measure No. 1.314/2025 and CMN Resolution No. 5.247/2025 reveals distortions that concern producers. Of the R$ 28,2 billion renegotiated until December 2025, only 19% (R$ 5,4 billion) used public funds with subsidized interest rates. 81% (R$ 22,8 billion) were renegotiated with free resources, subject to market rates.

For Farsul, renegotiating debts at market interest rates in a scenario of high Selic rates could turn the solution into a bigger problem. With grace periods and installments, the outstanding balance tends to grow, creating an exponential accumulation of liabilities that could lead to new episodes of stress in the future.

Another critical point is the allocation of funds. While the National Treasury directed a large portion of its resources to Pronaf and Pronamp, the "other producers," who hold the largest volume of debt under more expensive conditions, ended up resorting almost exclusively to market interest rates. Of the R$ 22,8 billion renegotiated through free resources, 100% went to this group, highlighting the lack of effectiveness of the public policy for this segment.

The short-term outlook is not encouraging. The forecast is that the situation for rural credit will continue to worsen in the first half of 2026, with possible stabilization only after May, depending on fiscal normalization and the absence of new economic shocks.

As a way out of the crisis, Farsul advocates for the urgent approval of Bill 5.122, currently being processed in the Senate, seen as a more suitable alternative for structuring the sector's debt. The organization also recommends reducing dependence on renegotiations at market interest rates, accelerating solutions that address the core of Brazil's fiscal problem, and recalibrating support mechanisms to reach producers most exposed to free market interest rates.