Government announces economic measures to help producers affected by the pandemic

The federal government announced a package of economic measures to minimize the difficulties of the agricultural sector, especially rural producers, due to the pandemic of the New Coronavirus (Covid-19) and also the impacts caused by the drought.  

The measures were approved by the National Monetary Council (CMN) on Wednesday night (8). The Ministry of Economy and the Central Bank responded to the demands made by Minister Tereza Cristina (Agriculture, Livestock and Supply) to help affected rural producers. 

Among the measures adopted as a result of the pandemic, valid for the entire country, we highlight the extension of amortizations of funding and investment financing, due and unpaid and falling due until August 15, 2020, at the original interest rates of the operation .

In support of cooperatives, agro-industries and grain producers, funding for storage and marketing (FGPP) was authorized with resources from rural credit, with a limit of R$ 65 million per beneficiary. For cooperatives of family farmers, the interest rate will be 6% per year, and 8% per year for other companies. The payment period will be 240 days and the hiring period ends on June 30, 2020.

“These measures will allow farmers to have more terms and liquidity to honor their financial commitments and enough peace of mind to help them in their decision-making”, said Minister Tereza Cristina. 

family farmers

In addition to these benefits, small producers will have help, especially those in flowers, hortifrutis, milk, aquaculture and fishing. To ensure small expenses on the property to recompose its productive structure, funding the activity and maintenance of the producer and his family, a special line of credit for family farmers (Pronaf) was created. Interest rates will be 4,6% per annum, with a three-year payment term, including a grace period. The limit per producer will be R$ 20 thousand. 

Likewise, a special line of credit was also created for medium-sized farmers included in the Pronamp who are dedicated to the production of flowers, fruit and vegetables, milk, aquaculture and fishing. Interest rates are 6% pa, with a three-year payment term, including a grace period. The average producer will have a limit of R$ 40 thousand. 

Hiring under these lines extends until June 30, 2020.

 Drought

For producers in municipalities that have decreed state of emergency or public calamity From January 1st of this year until the date of publication of the regulations, recognized by the state government, the extension of financing for costs and investments is expected, at the same financial charges originally contracted.

For funding due later this year, payment will be made in up to seven annual, equal and successive installments, starting from the renegotiation date, under the original contract conditions. For operations with rural insurance, the indemnified amounts will be deducted. As for the investment installments falling due this year, they will be extended to the year following the year of the final maturity of the operation. 

In addition to these extensions, family farmers covered by Pronaf and medium-sized Pronamp farmers located in these municipalities will also have access to special lines of credit. In Pronaf, interest rates will be 4,6% per year, with a three-year payment period, including a grace period, and a limit of R$ 20 per producer. At Pronamp, interest rates are 6% pa, with a three-year payment period, including a grace period, and a limit of R$40. Hiring under these lines extends until June 30, 2020.

For cooperatives located in this region affected by the drought, in addition to access to financing for storage and marketing through the FGPP, the CMN approved the creation of an emergency line to finance working capital (Procap-Agro Emergencial Estiagem). The measure aims to renegotiate up to 100% of the amount owed by the member resulting from the acquisition of inputs for use in the 2019/20 harvest, provided that the cooperative transfers the same financing conditions to the member. 

The limit per cooperative will be R$ 65 million, with interest rates of 8% per year. For cooperatives of family farmers, the interest rate will be 6% per year, and 8% per year for other companies. Hiring under this line also ends on June 30, 2020.