FecoAgro/RS warns of the seriousness of rural debt

The crisis faced by rural producers in Rio Grande do Sul was the subject of a meeting held this week at the Ministry of Finance in Brasília (DF). The hearing, which was scheduled to be attended by Minister Fernando Haddad — who was absent at the last minute — was led by the ministry's executive secretary, Guilherme Mello, and aimed to discuss alternatives for the debt of the Rio Grande do Sul agricultural sector.

The Federation of Agricultural Cooperatives of the State of Rio Grande do Sul (FecoAgro/RS) was represented by its president Paulo Pires, who described the situation as a generalized crisis in the state's economy. “The purpose of this hearing was to find a solution to the debt of producers in Rio Grande do Sul, since we have had three years of crop failure: 2022, 2023, and 2025, due to droughts, and in 2024 due to excessive rainfall. So, there have been four extreme events, including droughts and floods, very strong in recent years, which have caused producers to go into debt. And today, it is no longer a crisis for producers. It is a crisis for Rio Grande do Sul, for our economy, and we need a solution for this, a specific public policy for Rio Grande do Sul,” Pires emphasized.

During the meeting, called by Senator Luiz Carlos Heinze, political representatives and representatives of entities linked to the productive sector expressed concern about the direction of the crisis and demanded action from the Federal Government. The technical area of ​​the Ministry of Finance presented a partial diagnosis of the situation, which, for Pires, is already sufficiently clear. “There are 312 municipalities with a state of emergency declared. And a state of emergency is precisely a necessity when making a public policy — the first request of a government, whether state or federal, is the recognition of an emergency or public calamity,” he emphasized.

According to the director, the government's technical team's signaling is still uncertain, with legal difficulties highlighted in the Rural Credit Manual. “We have reached a point where these producers cannot survive, they cannot continue to have planting and production capacity without a specific policy to recover their income — even to change their activity,” he stated. For Pires, the moment requires a debt securitization policy, similar to what was done 25 years ago and which allowed the national grain production to jump from 80 to 320 million tons.

The director also mentioned the direct impact of climate change on the countryside in Rio Grande do Sul. “Yes, there is this ‘sword in the head’ of Rio Grande do Sul. We are suffering due to the climate changes that are occurring in the world, and this may be occurring very strongly here in the state. Look at this hailstorm that happened in Vacaria: something totally abnormal,” he noted, adding that the entities’ technicians are seeking solutions together with technicians from the Ministries of Agriculture, Finance and Agrarian Development.

The president of FecoAgro/RS also reported frustration with the lack of effective measures by the Federal Government. “We confess that there is a certain disappointment, mainly due to the need for securitization. The last securitization that existed in Brazilian agriculture — mainly due to the situation of the banks — at the time completely changed Brazilian agriculture. It was from that securitization, which is now 25 years old, that Brazil went from producing 80 million tons to the current 320 million,” he stated. He defended the creation of credit programs and incentives for changing productive activities in more vulnerable regions. “Without producers having credit, without programs that encourage this change, that qualify them in the economic sense for these changes, this will not happen.”

Finally, Paulo Pires reinforced the call for an urgent response. “It seems to us that there is, let’s say, no perception of the gravity of the situation of the productive sector in the state. The crisis is no longer just for farmers. Today, there is a crisis that has taken hold in the economy of Rio Grande do Sul, and many companies, many cooperatives, and many banks may certainly face difficulties — they may have problems as a consequence of this lack of payment capacity on the part of our producers, regardless of the size of the producer,” he concluded.